Supply Chain Risk Matrix

The Supply Chain Risk Matrix is a 2x2 matrix used to identify and assess risks in a supply chain. It is used to identify potential risks and develop strategies to mitigate them.

At a very high level, the Supply Chain Risk Matrix is used in the context of business, supply chain management.

Supply Chain Risk Matrix quadrant descriptions, including examples
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What is the Supply Chain Risk Matrix?

A visual explanation is shown in the image above. The Supply Chain Risk Matrix can be described as a matrix with the following quadrants:

  1. High Risk/High Impact: Risks that have a high probability of occurring and a high impact on the supply chain (e.g. natural disasters, political instability, supply chain disruptions)
  2. High Risk/Low Impact: Risks that have a high probability of occurring but a low impact on the supply chain (e.g. supplier quality issues, inventory shortages, customer service issues)
  3. Low Risk/High Impact: Risks that have a low probability of occurring but a high impact on the supply chain (e.g. new regulations, changes in customer demand, technological advances)
  4. Low Risk/Low Impact: Risks that have a low probability of occurring and a low impact on the supply chain (e.g. employee turnover, minor supplier issues, minor customer service issues)

What is the purpose of the Supply Chain Risk Matrix?

The Supply Chain Risk Matrix is a 2x2 matrix used to identify and assess risks in a supply chain. It is used to identify potential risks and develop strategies to mitigate them. The matrix is divided into four quadrants, each representing a different risk level. The four quadrants are: High Risk/High Impact, High Risk/Low Impact, Low Risk/High Impact, and Low Risk/Low Impact.

The High Risk/High Impact quadrant represents risks that have a high probability of occurring and a high impact on the supply chain. Examples of risks in this quadrant include natural disasters, political instability, and supply chain disruptions. The High Risk/Low Impact quadrant represents risks that have a high probability of occurring but a low impact on the supply chain. Examples of risks in this quadrant include supplier quality issues, inventory shortages, and customer service issues.

The Low Risk/High Impact quadrant represents risks that have a low probability of occurring but a high impact on the supply chain. Examples of risks in this quadrant include new regulations, changes in customer demand, and technological advances. The Low Risk/Low Impact quadrant represents risks that have a low probability of occurring and a low impact on the supply chain. Examples of risks in this quadrant include employee turnover, minor supplier issues, and minor customer service issues.

The Supply Chain Risk Matrix is a useful tool for identifying and assessing risks in a supply chain. It can help organizations develop strategies to mitigate risks and ensure the continued success of the supply chain.


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What templates are related to Supply Chain Risk Matrix?

The following templates can also be categorized as business, supply chain management and are therefore related to Supply Chain Risk Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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