Handbook

Supply Chain Risk Scenario Development Handbook

Guidance on emerging supply chain risk scenarios in a rapidly evolving ecosystem

Service

ORX Scenarios

Community

ORX Scenarios Community

Risk programme

Management, Practice & Framework

Handbook - March 2025

Assessment of supply chain risks in operational risk scenario programmes is a rapidly developing area of priority. Nearly a quarter of all institutions that subscribe to ORX Scenarios have developed scenarios addressing various types of supply chain risks that reflect their growing reliance on an increasingly complex ecosystem of partners. This handbook provides guidance on developing scenarios covering five different supply chain risk themes identified from current industry data.

Based on data submitted by ORX Scenarios subscribers and discussions held with them, this handbook offers practical guidance based on emerging scenario analysis trends, a standardised view of current industry data and example scenarios covering key supply chain risks.

The Scenario Development Handbook is available for free to all ORX Scenarios subscribers.

Supply chain risks are defined as:

Forming part of a series of handbooks offering practical guidance to scenario practitioners on developing scenarios for emerging risk themes, this document, like others in the series, provides:

Up-to-date data-driven scenario analysis guidance based on current supply chain risk scenario trends.
A comprehensively standardised view of current industry data, with all key scenario assumptions mapped to relevant ORX categorisations (event, causes, controls, drivers, impacts).
Example scenarios covering the main storyline themes identified in the survey data submitted by ORX Scenarios subscribers.

Scenario practitioners can use this handbook to:

Identify and assess their organisation’s exposure to supply chain risks and, therefore, the thematic focus, storyline and qualitative assumptions of their own supply chain risk scenario(s) against current industry data.

Ensure all relevant financial impacts and risk drivers have been included in their scenario(s) and assessed key driver-impact relationships against the strongest associations identified from current industry data.

Build or review a full supply chain risk scenario, including its storyline and qualitative and quantitative components.

This handbook builds on ORX’s recent portfolio of work on supply chain risks, which can be summarised as follows:

The 2024 Insights into Material Risks Report highlights the materialisation of supply chain threats in the ORX Scenario Library across a range of risk types impacted by ecosystem risk factors.
The ORX Operational Risk Horizon 2025 study reported that supply chain risk has risen in prominence more than any other emerging risk in the latest rankings, with control vulnerabilities and lack of transparency indentified as key concerns.
ORX’s most recent Top Risk Review (H2 2024) found that supply chain risk is a leading factor driving third party risk, which ranked second in the review and is increasingly driven by supply chain and ecosystem complexity, concentration risk and interconnectivity associated with poor visibility of subcontracting arrangements.
The November 2024 ORX News Data Deep Dive on third party risks highlights the increased materialisation of third party threats in the ORX News database, focusing on three common third-party risk themes: cyber, infrastructure and supplier.
ORX’s Strategic Vision for Operational and Non-Financial Risk highlights the greater reliance on an ecosystem of partners as a key outcome of digitalisation - a shift made more challenging in a context of global socio-economic volatility and making ecosystem risk a strategic external risk.