What is 'risk mitigation' in supply chain management?

Risk mitigation in supply chain management refers to the development and implementation of strategies designed to identify, assess, and manage potential risks that could disrupt the supply chain. This process is crucial for ensuring continuity in supply and minimizing the impact of unexpected events, such as natural disasters, supplier failures, or geopolitical issues.

By having risk mitigation strategies in place, companies can take proactive measures to protect their supply chains from vulnerabilities. This may include diversifying suppliers, establishing safety stock levels, developing contingency plans, and investing in technology to enhance visibility and responsiveness within the supply chain. The goal is to create a resilient supply chain capable of adapting to unforeseen challenges while maintaining smooth operations.

The other options, while relevant to different aspects of business operations, do not specifically address the concept of managing risks in the supply chain context. Negotiating better supplier terms, for example, relates to supplier relationship management, while reducing employee turnover and enhancing customer service pertain to human resources and customer relationship management, respectively.