The idea of supply chain risk management has been around for about 10 years. It is only in the last 5 years, that it has become popular. We are still at the early stage of supply chain risk management adoption and deployment.
In terms of total dollar amount, external suppliers provide a significant portion of a manufacturer’s product. For U.S. firms, 50% to 80% or more of the final price of a product can be the cost of purchased goods. In Japan, it can be even higher.
For these reasons, any supply disruption can kill a supply chain. As a result, supply chain risk management is now critical to a company’s competitiveness.
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