The Importance of Optimizing Your Supply Chain with Risk Management | Lojistic [ ](https://www.lojistic.com)- Why Lojistic - [ All Inclusive. Zero Cost. Every Lojistic solution. No limits. No fees. ](https://www.lojistic.com/pricing) - [ All Modes. All Carriers. All Currencies. 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Parcel, LTL, truckload, ocean, rail, air freight. ](https://www.lojistic.com/carrier-connectors) - [ Industries Served Retail, eCommerce, 3PL, manufacturing, and more. ](https://www.lojistic.com/industries-served) - [ Roles Most Impacted & How Supply chain & logistics, procurement, finance leaders. ](https://www.lojistic.com/roles-most-impacted) - [ Use Cases How Lojistic helps manage and reduce shipping costs. ](https://www.lojistic.com/use-cases) - Platform Features - [ Global Analytics & Reporting Predictive analytics and scenario modeling for all carriers globally. ](https://www.lojistic.com/shipping-analytics-software) - [ Rate Optimization & RFPs Tech-powered data prep, strategy, and rate impact analyses. ](https://www.lojistic.com/rate-optimization-rfps) - [ Parcel and Freight Audit & Payment *+PAY* Carrier refunds and payments automated and made simple. ](https://www.lojistic.com/freight-audit-and-payment) - [ GL Coding & ERP Sync Automatically code shipping costs down to the order level ](https://www.lojistic.com/gl-coding-erp-sync) - [ Lojistic API & App Integrations Easily integrate normalized shipping data to your business systems. ](https://www.lojistic.com/api-app-integrations) - [Pricing](https://www.lojistic.com/pricing) - [About](https://www.lojistic.com/about) - [Company](https://www.lojistic.com/company) - [Culture](https://www.lojistic.com/culture) - [Careers](https://www.lojistic.com/careers) - [Partner Programs](https://www.lojistic.com/partner-programs) - [Security](https://www.lojistic.com/security) - [Media](https://www.lojistic.com/media) - [Ratings & Review](https://www.lojistic.com/reviews) - [Videos](https://www.lojistic.com/videos) - [Blog](https://www.lojistic.com/blog) - [Contact](https://www.lojistic.com/contact) [Create Free Account](https://app.lojistic.com/demo/connect-carrier?activeStep=create-account&trackDemo=false) [View Demo](https://app.lojistic.com/demo) [ Log In](https://app.lojistic.com/demo/account/login?trackDemo=false) The Importance of Optimizing Your Supply Chain with Risk Management =================================================================== ![Icon denoting blog author information in Lojistic’s content layout](/images/pages/blog/icon-author.svg)Rich Harkey ![Calendar icon used to display blog post dates on Lojistic’s website](/images/pages/blog/icon-calendar.svg)May 04, 2012 What is risk management? It is the process of looking at potential sources of disruption to your supply chain that can create financial and physical damage. The next step would involve the business and supply chain leaders evaluating the assessment and fix the weaker points and preemptively doing their best to prevent the risk from happening in the future. It may be impossible to prepare for every single disruption, but this practice allows for contingency plans and preparation for worst case scenarios. However, as common sense as the method may seem, many businesses still have not adopted these practices and optimize their supply chains. In a new Marsh white paper, the report states that “too many organizations lack complete visibility into their supply chains and do not understand the risks they face.” Some companies may wonder why this statement may be important. The easiest answer to point to is how globalized supply chains have become and the heavy disasters that severely impacted several supply chain last year including the Japan earthquake and the Thailand floods. The report includes startling statistics such as the fact that less than half (about 40%) of businesses after the flooding in Thailand stated they would reevaluate their supply chain resiliency. Big name brands that needed constant product flow were highly affected and the disasters showcased whether or not companies had any preparations. For instance, Sony was not prepared for any disasters as they were heavily affected by the Thailand floods. 24% of their products and services sales fell after the flooding which they attributed to the disaster. On the other hand, Seagate, the disk manufacturer, was also affected by the Thailand flooding but were able to predict their financial output and mitigate their risk with their diversified operations and broad supply chain. They saw a strong performance this past quarter with a net income of $1.1 billion. Risk management is an important part for optimizing any supply chain as these two examples have shown. Source Consulting is committed to helping companies find ways to help mitigate areas of risk within their company by helping reduce shipping costs and empower businesses with innovative shipping technology. We can help [optimize your supply chain](https://www.lojistic.com/freight-audit-and-payment) and help give the advice and tools your company needs for the risks ahead. Whether it is through our company or through a careful self-evaluation, make risk management a priority rather than a passing thought. ![Rich Harkey Headshot](https://www.lojistic.com/assets/public/users/rich.png) Author Rich Harkey Rich Harkey Senior Strategy Manager Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry. As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts. Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results. [« Previous Post](/blog/understanding-shipping-lingo-to-reduce-shipping-costs) [Next Post »](/blog/free-online-tools-to-help-save-on-shipping) **Lojistic Blog** [Recent Posts](https://www.lojistic.com/blog) | [Categories](https://www.lojistic.com/blog/categories) Why Lojistic ---------------- - [All-Inclusive. Zero Cost. ](https://www.lojistic.com/pricing) - [All Modes. 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