Risk management: The value of a Risk Register to prioritize business focus

From the September-October 2025 edition of Supply Chain Management Review.

September-October 2025

This issue of Supply Chain Management Review explores the technologies, strategies, and leadership practices shaping next-generation supply chains. Features include Gartner’s 2025 Top 25 Supply Chains and an…

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By M. Scott Moon and Gene Tyndall

Today’s reliance on worldwide trade makes the issues one must navigate extend beyond local borders. Gone are the days when the monitoring of local and state risks was sufficient to navigate the issues that affect the flow of raw materials and finished goods. As a result, tools are emerging to manage the end-to-end (raw materials to consumption, now defined as supply chain) assessment of factors that could restrict the flows.

Wading through the sea of information is a critical issue all teams are dealing with. What risks are critical to be managed? Defining these meaningful risks often depends on your perspective of the business. While a common balanced Risk Register focuses on those risks that affect the overall business, each function will need the ability to change risk component sensitivities to highlight the issues to resolve.

The business process can be simply defined using the buy, make, move, distribute, and sell processes. By breaking down the Risk Register using this construct, you can develop a framework of specific topics/events to monitor. Simply stated, monitoring and managing risk is deciphering those detailed elements to ignore versus those to monitor.

What is risk?

Simply defined, risk is any impetus that results in an undesired outcome. Using this broad definition, there are many stimuli (e.g., new regulations, market changes, geopolitical conflict, pandemic, etc.) that can result in a bad outcome. A risk event affects all aspects of the business (e.g., sales, marketing, supply chain, procurement, operations, etc.). Developing a honed perspective of the worldwide events affecting your business is ensuring your radio is tuned to the right station.

Honing the business frequency to the frequency, complexity, severity, and level of impact helps align organizational resources on the actions that add the greatest business value. The business is expected to go beyond having ways to identify risks (as requested by shareholders) but must have a proactive approach to immediately resolve impacts that deliver to committed targets. By using our proposed two-stage approach, both “C” and execution-level executives stay in tune to resolving issues that affect their ability to perform.

The Risk Register

Risk management is a real-time, everyday activity. It must become part of the operating DNA to review register signals and automatically prioritize activities to resolve events. Therefore, the Risk Register is an enabler of a continuous improvement cycle that enables the development of a resilient organization able to identify and resolve any stimulus that might affect its ability to deliver as planned. This automated, system-supported process will provide insight whenever called upon to understand risk elements.

Managing risk requires strategic and tactical alignment of the business. Addressing the issues with the greatest impact from the overall organization’s perspective ensures teams deliver as needed. This internal alignment is critical to ensure the corrective actions are synchronized and executed flawlessly to deliver the desired result.

 

Balanced strategic risk. Every executive team commits to the planned performance of the business. Ensuring the team delivers to the projected performance affects stock value, accreditor evaluation, and the cost of working capital to manage the business. Ensuring the team aligns to appropriately estimate and deliver performance is critical in today’s world.

The Strategic Risk Register reviews (red, green, yellow) the planned performance of the overall business and highlights areas of concern that will affect business performance. This balanced view of the business includes technology, financial, supply, regulation, competitor, and organizational capability concerns that reflect the team’s ability to deliver on the agreed-upon promise.

Tactical Risk Register. With a strategic perspective provided, functions of concern will be highlighted for review. Having set the strategic goals, business decision support solutions must provide the details of the issues to be addressed and the magnitude of the impact for prioritization. A prioritized list must be presented to the team to: 1) define the issue to resolve, and 2) provide guidance for recommended actions for resolution.

The team must define an owner for the actions raised, and it will be the responsibility of the defined owner to keep the team aware of resolution needs. The owner will be expected to work cross-functionally to alert affected cross-functional teams so they can respond appropriately.

The Risk Register approach provides an actionable prioritization that must be resolved to deliver the best business outcome.

From concept to action

The goal is to create aligned action and quick responsiveness to market issues that could affect business optimization. The delivery of the Risk Register is the creation of both the Strategic and Tactical Registers. Failure to deliver both will result in either: 1) siloed responsiveness with undesired results, or 2) an inability to determine what exactly to do while recognizing something should be done. Effective teams take rapid action on events, ensuring all parties are informed, aligned, and deliver to a common goal.

 

Balanced Strategic Risk Register. Figure 1 illustrates the Balanced Strategic Scorecard, allowing the business to tailor sensing to the topics that are critical to their operational approach and current market conditions. One should assume that any solution should question the sensing variables and ensure they highlight critical elements of the planned strategy. As the business changes, so does its strategy.

In the example (Figure 2), we have highlighted 14 critical business focus areas. The designed approach allows the executive team to weigh in on the relative importance (i.e., weight in the figure) of each element in the current period strategy. This is critical to recognizing the dynamics and reflecting the changing priorities of the executive team.

The computed score is a composite of the criteria selected for evaluation. Defining these elements for each focus area (e.g., transportation may include port congestion, lead times, port closures, rate trends, customs/duties, changing regulations, etc.) that the team must “tune its radio” to listen for performance that would affect their ability to deliver goods on time, when needed.

To define what is acceptable, each focus area should be assigned an owner who has the responsibility to define the risk elements, the weights of evaluation, and a scale for each performance element. The factors, evaluation criteria (determining how the rating will be computed), and weighting should be transparent to all executive members. The solution should allow for the simple display of these elements (using the framework in Figure 2), where the resulting score is reflected.

By using a consistent framework and providing the transparency of sensing elements, all involved can be in tune with the Risk Register evaluative criteria. Any missing sensing element should be added as needed to further expand the sensitivity of the Risk Register and the stimuli being reviewed.

Tactical Risk Register. This register analyzes the overall network overlaying each stimulus to determine the relative impact as defined. The goal of the Tactical Register is to provide the owner of the risk category direction on the risk, the action, and the volume affected. It follows the same construct as its strategic partner, but prioritizes issues based on the known volume affected.

With the framework defined, the detailed metrics must be defined by the team for real-time review. Figure 3 shows a representative list of detailed factors one might consider and Figure 4 includes samples of detailed focus topics.

 

Why now?

Technology enables commerce to traverse borders seamlessly, enabling businesses to view the trade marketplace as a single market. Historic guardrails that guided balanced domestic and global trade partner relationships were relaxed by the prior two decades of peace and free trade. Given today’s changing trade landscape, many are now exposed to emerging risks.

An example of the current market’s overexposure to the expectation of continued trade is the production of rare earth metals. These focus on critical materials because they are used in a wide array of applications, including high-tech devices (e.g., medical devices), renewable energy technologies (e.g., wind farms, electric vehicles, etc.), and defense systems.

This backdrop illuminates the need to monitor worldwide risks to understand the impact of any risks to the organization. According to industry pundits, 72% (up from 25% five years ago) of supply chain leaders now consider geopolitical instability their largest global issue. While the market is waking up to this exposure, only 30% of companies report that they are actively working on risk mitigation. This results in the planned continuation of today’s current practices, which leads to continued exposure to the risks being experienced.

How resilient is your business? How aware are you of the worldwide changes that affect your business? By implementing the Risk Register, you set up the construct to “hone your skills” to hear the risks that are impactful to you and your ability to perform.

Changing the way we work

The market is a dynamic environment where the pace of change is rapid. Developing an ear and tuning information to hear the issues that affect your performance is critical to ensuring success. The proposed approach is intended to support daily (or at worst weekly) review of activities similar to your review of current news.

How the team reacts will be based on the level of acceptance of the thoughts/approaches defined. The team will expect that its corresponding team members will respond as quickly as possible to resolve business risks.

Challenges to address

The approach is based on an aligned team vision of priorities, focus, and responsiveness. Ensuring that the information presented is reviewed and discussed as part of the regular business review is important to ensure it becomes part of business management. Other common challenges include the following.

Inclusion in business decision making. All business leaders are responsible for reviewing the data, taking action, and supporting those who need help.

Alignment on qualitative measurement. Each Risk Register element must be defined by the data required, where the data will be sourced, and how it will be evaluated (to determine red, green, and yellow).

Focus owner. Every Risk Register element must have an owner defined who will be responsible for reacting to the information provided.

Dynamic data inclusion. The data being analyzed must be updated continuously. The business must commit to the cost to fund the data population. All data collected must come from reliable sources that the team accepts.

Tuning the business ear. It will be imperative that the team define the risks that they want to review. This sensitivity can be built into the strategy, the data provided, or the method of defining the score.

Strategic alignment. The team must commit to aligning the weight of each element on the register to the strategic business plan.

The Risk Register is the lightning rod to align the team to the market dynamics that will derail their plans. By making it a part of the new DNA of the business, the team can assess the probability of the plan being successfully executed without issue.

 

Winning in today’s competitive market

Any interaction that includes the actions of people ensures that the processes will change, the output will be variable, and stability is a relative term. Creating business resilience requires that the business actively searches for issues that could affect its ability to realize its targets wherever they might materialize. By developing a risk-sensitive culture, you are transforming the organization to be resilient and responsive to change.

As teams are required to react quickly to change, ensuring that the executive and operational teams remain aligned on priorities and respond in harmony to execute change is paramount. The Risk Register approach provides a collaborative culture that builds resilience, alignment, and focus on those changes that drive maximum impact. Competitively, the Risk Register approach ensures that you respond quickly enough to minimize any risk of loss (e.g., market share) that could benefit your competitor.

About Global Links

Global Links appears in each issue of Supply Chain Management Review. Richard J. Sherman, retired guru of SCM, is the Global Links column editor and collaborator. If you are interested in participating in the column, he can be reached at [email protected].

About the authors

M. Scott Moon is senior partner at eMATE Consulting and can be reached at [email protected].

Gene Tyndall is senior partner at eMATE Consulting and can be reached at [email protected].

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