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Module 8: Risk Management & Supply Chain Resilience

Learning Objectives
  • Identify common sources of supply chain disruption
  • Understand why supplier diversification reduces risk
  • Build a basic contingency plan for supply chain disruptions

Supply chains face disruption from many directions: natural disasters, political instability, port congestion, pandemics, and — particularly relevant in markets like Nigeria — currency volatility, which can sharply raise the cost of imported raw materials or components overnight. Relying on a single supplier or a single transportation route concentrates risk, so diversifying across multiple suppliers, routes, or even countries of origin makes a business more resilient when any one link fails, even if it sometimes means slightly higher costs in normal times. A basic contingency plan identifies the most critical links in a supply chain, establishes backup suppliers or routes in advance, and sets clear decision triggers for when to activate alternative plans, rather than scrambling to find solutions only after a disruption has already occurred. Businesses that invested in supply chain resilience and diversification before a crisis have historically recovered faster than those relying entirely on a single, 'leanest possible' supply chain.

Module Quiz

1. Why does supplier diversification reduce risk?

2. How can currency volatility affect a supply chain?