Multiple contracting is also a type of hedging strategy which saves companies against supplier monopoly .
Controlling
Some companies make use of vertical integration in order to reduce the supply chain risks . Partial integration is also a strategy which enables the company to transfer higher risks to the supplier end while also ensuring complete utilization of its resources . Flexible clauses in supply chain contracts that account for these structural changes are also an important part of risk management and need to be catered to .
Risk Sharing Supply chains operating on a global scale make use of a plethora of risk sharing strategies such as outsourcing and off-shoring . Outsourcing allows the company to distribute its risks to its suppliers across borders . Off-shoring on the other hand is used to focus on core functions while outsourcing riskier options . A common application of off-shoring is found in treasury services in order to avoid foreign exchange rate risks .
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