Definition: Inherent risk is the level of exposure before considering existing controls or mitigation measures.
Why it matters in supplier selection
Assessing inherent risk creates a consistent baseline and prevents a heavily controlled high-risk event from being mistaken for a naturally low-risk event.
Practical example
A critical raw material sourced from one region may have high inherent supply-continuity risk even if safety stock and alternate routes reduce the residual risk.
Fictional example: the figures or scenario are illustrative and do not describe a real supplier or client outcome.
How to use the term in a decision record
State the definition, source data, owner and decision treatment clearly. Do not use the term as shorthand for an undocumented assumption. Where the concept affects a score, cost or risk result, preserve the formula or evidence reference and the version date.