7.5 Summary

Globalization transformed international business significantly by enhancing cutting-edge technology as well as decreasing shipping trade worldwide. As a result, the connection between countries and continents became shorter and faster, impacting economic performance and gaining economic benefits. On the other hand, due to globalization and trade openness, companies faced challenges that amplified the vulnerability in Supply Chain Management and increased the risks. Supply Chain Management can promote competitiveness in the business field, and risk mitigation strategies can help organizations reduce risks such as human-made or natural disasters (Gurtu & Johny, 2021).

Risk is a possibility of an event that can occur and affect the global value chain. There are different types of risks: external and internal, and distribution channel risks. Risks in the global value chain significantly influence domestic and international companies and the environmental organizations overall. A lack of foresight risks in the organization can cause disruptions. Disruptions can ripple through the global value chain, which causes vulnerability, uncertainty, and colossal loss of money. The risk management cycle is a helpful tool for helping companies in a variety of industries to recognize potential risks at all levels and then manage risks at all levels.