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Best Practices for Supply Chain Risk Management

• Proactive supply chain risk management requires the development of guidance and policies, practices, processes, and organizations for identifying and managing supply chain risks.
• Knowledge of the upstream supply base and requiring suppliers to commit to a time to recover in the event of a disruption are key to successfully managing supply chain risks.

Many Supply Chain Risks Are Not Addressed by the Air Force Acquisition and Sustainment Communities

• Air Force and Department of Defense (DoD) guidance on supply chain risk identification and mitigation address some, but not all, of the supply chain risks identified in the business literature.
• The Air Force commodity councils have a process for managing risk, but it is geared toward managing contract risk, not supply chain risk.
• One prominent category of supply chain risks identified in the business literature but not DoD guidance is natural disasters. The Federal Acquisition Regulation's force majeure clause transfers risks associated with natural disasters and some other risks from suppliers to the Air Force.
• Interviews with Air Force supply management personnel suggest that they rarely or never consider risks whose investigation would require investment in developing a supply chain risk management plan or risks from force majeure events for which the Federal Acquisition Regulation absolves suppliers.