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Design
NAVIGATING
RISK
James Willn explores supply chain design features that help to mitigate the risks of sanctions
Sanctions are a common tool used by governments to impose policies , often targeting individuals , industries , or countries . While they are used to promote human rights and geopolitical interests , they can create many difficult challenges for businesses that have global supply chains .
For companies with complex supply chains , understanding how sanctions can affect operations and how to reduce these risks is essential to maintaining compliance , avoiding operational disruptions , and earning a good reputation . Sanctions can disrupt supply chains by ending ties with important suppliers , customers , or providers , which can lead to financial loss , rise in prices , and a bad reputation for the business . So , what are the key risks posed by sanctions , and how can companies mitigate them ?
A tumultuous landscape
One of the greatest challenges facing businesses is the complexity of sanctions regulations , as they vary by nation and can target specific people , countries , or companies . To make matters more difficult , sanctions do not always remain the same and can evolve rapidly in response to geopolitical events , creating an environment where businesses must continuously monitor and adapt to changing rules . Companies often struggle to keep up with these constantly evolving rules , increasing the risk of accidental violations . Sanctions can also cause sudden disruptions and affect key suppliers or trading hubs , forcing businesses to find expensive and time-consuming alternatives .
Problems are also caused by lack of transparency in the supply chains , making it hard to determine whether a supplier or a
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