Understanding Risk in Supply Chains

A series of flashcards covering key concepts related to understanding and managing risks in supply chains.

Risk

A situation involving exposure to danger or opportunity where outcomes can be either positive or negative.

Hazard

A source of potential harm or a risk source that can lead to harmful effects if not managed.

Risk Management

The process that involves identifying, assessing, managing, and mitigating risks to ensure competitive advantage.

Uncertainty

A condition where risk is always high and constantly evolving, requiring ongoing management.

Risk Appetite

The level of risk an individual or organization is comfortable taking, which can guide decision-making.

Risk Exposure

A measurement of potential future loss that arises from types of risk, which can be prioritized for mitigative actions.

Insurance

A method to reduce or prevent possible losses by transferring risk.

Continuous Process

An ongoing cycle of identifying, assessing, monitoring, and managing risks essential for effective risk management.

Delegated Risk Appetite

Agreed levels of risk that differ by department, function, or activity, reflecting the unique risk tolerances.

Mitigation

Actions taken to reduce or manage risks, particularly those identified from hazard sources.