Supply Chain Continuity & Third-Party Risk Management Flashcards

What typically qualifies a supplier as 'critical' within a BCM program?

Answer: Suppliers whose disruption would prevent the organization from meeting its Minimum Business Continuity Objective (MBCO)

A supplier is classified as critical when their disruption would prevent the organization from meeting its MBCO, making impact on core operational capability — not financial size or relationship tenure — the defining criterion.

Which approach involves qualifying and contracting with alternative suppliers BEFORE a disruption occurs?

Answer: Proactive supplier pre-qualification and diversification

Proactive supplier pre-qualification involves identifying and vetting alternative suppliers during normal operations, enabling rapid activation of backup sourcing during a disruption without the delays of emergency vetting.

What is 'supply chain mapping' in the context of BCM planning?

Answer: Documenting and visualizing all supplier tiers, interdependencies, and critical material flows

Supply chain mapping involves documenting all supplier tiers, interdependencies, and material flows to identify vulnerabilities, single points of failure, and critical paths requiring dedicated continuity planning.

Which document formally specifies the continuity and recovery requirements that suppliers must contractually commit to meeting?

Answer: Supplier Business Continuity Agreement or BCM Schedule

A Supplier Business Continuity Agreement or BCM Schedule formally specifies recovery time objectives, testing requirements, reporting obligations, and notification procedures that suppliers must contractually commit to meeting.

What does 'reshoring' mean as a supply chain resilience strategy?

Answer: Returning previously offshored production or sourcing back to the domestic market

Reshoring involves returning manufacturing or supply operations to the domestic market after previously being offshored, reducing geopolitical, logistical, and single-country concentration risks in the supply chain.

Which risk category is specifically associated with concentrating critical material sourcing in a single foreign country?

Answer: Geopolitical and sovereign risk

Geopolitical and sovereign risk encompasses disruptions from trade disputes, economic sanctions, political instability, and government export restrictions that can suddenly cut off supply from a single-country source.

What is the primary BCM purpose of conducting regular audits of critical suppliers?

Answer: To verify that suppliers maintain adequate BCM capabilities and meet contractual continuity requirements

Regular supplier BCM audits verify that suppliers maintain adequate continuity plans, have tested their procedures, and remain compliant with contractual BCM requirements, ensuring the extended supply chain remains genuinely resilient.