7 ways in which a supply chain can fail.

Fixating on the pursuit of managing risks in supply chains is like chasing wind in that it is impossible to capture the unlimited sources of risk, with each one representing a different cause for the supply chain failure.  Supply chain risks fall into general categories such as natural disasters (the Tohoku earthquake and tsunami), industrial accidents (the port explosion in Beirut), infrastructure failure (Trans-Siberian railroad bridge collapse), terror attacks (the Colonial pipeline shutdown), and labor action (the US West Coast lockout), to name but a few.  General Motors counted over 120 different high-level financial, strategic, operational and hazard risks, and these can expand into thousands of risks when applied at an operational level. 

Given the extent of the risk universe, it is impractical for organizations to create mitigation plans for every type of threat.  Instead, they should seek to manage the most critical risks, and make their supply chains resilient enough to endure disruptions – including those that are outside of their control.
Hence, risk management is about reducing the probability of experiencing the impact of a risk event, while resilience is about creating the ability for the supply chain to continue operating in the face of a risk event or disruption.  Moreover, the need for resilience is not negated by managing risk.  Reducing the probability and severity of a disruption can reduce the need for resilience – but it doesn’t eliminate it. 

Making a supply chain resilient implicitly involves creating business continuity plans (BCPs) to ensure continued operations in the face of a supply chain disruption.  These are plans to restore lost capacities, independent of HOW the operational capacities were lost. 
The good news is that there are only seven ways in which a supply chain can fail.  Each failure (also known as failure mode) involves the loss of at least one of the core capacities listed:
• The capacity to acquire materials (maintain supply).
• The capacity to ship and/or transport products.
• The capacity to communicate.
• The capacity to convert (internal manufacturing operations).
• The human resources (personnel) capacity.
• The capacity to maintain financial flows.
• The capacity to distribute products to customers including consumers.

Regardless of how the capacity was lost (due to natural disaster, industrial accident, infrastructure failure, for example), the outcome is predictable – capacity loss.

Framing possible operational failures in this way gives rise to a powerful approach to building resilience in supply chains.  In this approach, companies focus on avoiding or managing a limited number of predictable outcomes. In other words, while the sources of risk are unlimited, the outcomes of risk events are not.

Source: https://www.scmr.com/article/the_seven_core_capacities_of_supply_chain_resilience