Financial Risk Management in Global Supply Chains: Strategies for Resilience and Profitability

Supply chains of the global economy are wedded to financial risks such as exchange risk, political risk, risk of variation in regulation, and risk of economic cycles. Mitigating of these risks is very crucial so as to guarantee the organization’s stability and its ability of making profits. This research paper analyses the measures that organizations have taken towards buffer financial threats in international supply systems. It explores the risk identification, risk evaluation and risk mitigation measures; that include, financial risk management, supplier diversification, application of IT and jointly managed risk-bearing structures. Importantly, the study also includes the discussion of the use of innovations, including blockchain and predictive analytics, in increasing positive financial reporting and better predicting necessary decisions. Examples of supply chain risk management solutions are discussed through various company examples and best practices. The case study lends credence to managing the financial risks in supply chain planning and realistic, responsive approaches to perpetuating profit margin in the unstable global economy. To the best of the author’s knowledge, this paper adds value to existing literature by offering specific recommendations that can be implemented by practitioners and policymakers to enhance supply chain manageability and affordability.