![]() ![]() The Bar Chart Report shown in Figure 4 is used to show the ranking of each supplier’s Risk scores within a commodity group. The suppliers can also be rank ordered using this report. This report is useful in comparing suppliers within a group by risk category. It is also color coded to indicate high to no risk scores. The Multi-Use Matrix (MUM) Chart Report, Figure 3, is used to show the Risk Category Scores for all (or some since the number of suppliers is selectable) of the suppliers in a commodity group. This is a relative measure used to rank order the suppliers according to the potential of a supply chain disruption. The averages of the results are rolled up to produce the Risk Probability Index (RPI). This probability is multiplied by the risk indicator score for that event. The events are assigned a probability of occurrence within a specific supply chain by experts within that supply chain. This view takes into account the indicator scores by applying them to potential risk events that would result in a supply chain disruption. This report can be used to understanding the base factors about the supplier that are driving risk.įigure 2 is the Risk Wheel for the analytical or risk event mode. A description of each element of the wheel becomes visible as the curser touches the area and the details are available by “clicking” on the section of interest. Red (high risk), Light Red (medium risk), Yellow (low risk), green (no risk). In the second ring are the risk categories and the outer, the risk indicators. The center of the wheel is the Risk Index for the demographic (supplier, sub category, commodity, etc.). This view is available for any demographic and any level of drill down. The diagnostic view is shown in Figure 1. ![]() The primary reporting view of the system is the “risk wheel”. The process and framework has been used by Risk Management teams and commodity managers to aid in identifying, predicting and managing risk on a timely basis or to be alerted to possible risk factors that require their attention. This framework and process consists of a set of disruption predicators developed through several years of research and experience with global supply chains. In response to this, Supply Chain Redesign L.L.C., a consulting firm focused on supply chain management, has created a framework and process to better understand the drivers that create supply disruptions and mitigate the risk more proactively. and many procurement organizations lack sufficient market intelligence, skills, and information systems to effectively predict and mitigate supply risks. They also found that less than half of enterprises have established metrics and procedures for assessing and managing supply risks. On the other hand, operating a global distribution channel increases the level of supply chain risk with an increase both in the potential for product and service disruptions and in the magnitude of those disruptions.Īccording to Aberdeen Research, more than 80% of supply management executives reported that their companies experienced supply disruptions within the past 24 months and these supply glitches negatively impacted their companies’ customer relations, earnings, time to-market cycles, sales, and overall brand perceptions. On the one hand, global sourcing is lowering purchase prices and expanding market access. Supply Risk Assessment Supplier Risk Assessment System in UseĪs companies increasingly adopt global sourcing and supply chain management practices, they are discovering both opportunities and challenges. ![]()
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