This is the risk that the firm or organization is impacted or suffers loss due to the inability of an organization to operate its production, manufacturing or other business activities as normally planned or budgeted as a result of the disruption to, or the cessation of supply of, key input components in the organization’s supply chain.

This can be short, medium or long term disruptions and the result of operational, business or financial issues affecting the supply chain businesses. Physical disruptions (due to acts of nature) and financial distress at a key supplier are common Supply Chain Risk issues.