Sharing some slides n summarised points from my study paper submitted on Supply Chain Risk Identification and Mitigation practical process “Risk comes from not knowing what you are doing”. There is no business activity without Risk, the penetration level, degree of criticality and the periodicity defines the impact complexity. In a way, this leads to derivation of proactive analysis and potential mitigations. Supply chain risk management is the intersection of supply chain management and risk management. There is a need to explore the identified risks through a detailed investigation of various possible scenarios to stress test our procurement system and the supply chains. PHASES IN RISK IDENTIFICATION: Ø Comprehensive visualization in understanding the risks and setting a Risk Framework; Ø Proactive analysis, engaging teams for deliberations; Ø Identify and define the Risks, the criteria and risk levels; Ø Measure, track and define to initiate the mitigation plans; There are different ways of identifying and understanding the risks affecting an organization and thereby follow these up by the corresponding mitigations. Two globally accepted and predominantly practiced risk categorizations are Impact based, and, Source based. While the impact based risk management segregates all identified risks on the basis of Impact (High, Medium and Low), Source based risk groups potential risks arising from the different source environment such as Organizational, Environmental/Market, Product/Material, Sourcing, Supplier, Supply chain network risks, etc – each having its own enlarged risk definitions, risk drivers and risk mitigations. The different degrees of Impact and probable periodicity of practically happening of identified risks can be plotted on a paper; the resultant visual matrix as a product of these two would be representation of Risk Matrix. And so, Risk can also be defined as the combination or the Product of Probability of Risk and Impact of Risk. Initiating actions towards mitigations also does not necessarily guarantee the avoidance of a risk event, it will only significantly reduce the degree of impact that such risk(s) on a department or an organization. While we do realize the need for continual assessment of all risks that accordingly also calls for checks on all mitigation controls thereafter. Buyers and supply chain must take detailed mitigation actions by diligent systems, initiatives and action plans put in place – and can conclude that high risks identified are suitably mitigated to a large extent – as reflected in this report. With a strong risk mitigation strategies in place, we would be ready to face any given supply chain risk event. Risk management is an ongoing process that now will continues through the life of any project. The processes would include risk management planning, identification, analysis, monitoring and mitigation controls. We have undertaken this project with the objective of risk management to decrease the probability and impact of events adverse to our Supply Chain in general and Procurement in particular. The first is mitigation steps that have been taken to lessen the probability of the event occurring. The second is the contingency plan, or a series of activities that we would be further initiating in parallel (prior to the event of possible risk) to or when the identified event occurs. One must also realize that though efforts are made to forecast and identify all potential risks, it is equally important to keep monitoring all possible risks on a scheduled basis, and reported on in the risk assessment table. When such unanticipated risk events are observed or “Risk comes from not knowing what you are doing”. There is no business activity without Risk, the penetration level, degree of criticality and the periodicity defines the impact complexity. In a way, this leads to derivation of proactive analysis and potential mitigations. Supply chain risk management is the intersection of supply chain management and risk management. There is a need to explore the identified risks through a detailed investigation of various possible scenarios to stress test our procurement system and the supply chains. PHASES IN RISK IDENTIFICATION: Ø Comprehensive visualization in understanding the risks and setting a Risk Framework; Ø Proactive analysis, engaging teams for deliberations; Ø Identify and define the Risks, the criteria and risk levels; Ø Measure, track and define to initiate the mitigation plans; There are different ways of identifying and understanding the risks affecting an organization and thereby follow these up by the corresponding mitigations. Two globally accepted and predominantly practiced risk categorizations are Impact based, and, Source based. While the impact based risk management segregates all identified risks on the basis of Impact (High, Medium and Low), Source based risk groups potential risks arising from the different source environment such as Organizational, Environmental/Market, Product/Material, Sourcing, Supplier, Supply chain network risks, etc – each having its own enlarged risk definitions, risk drivers and risk mitigations. The different degrees of Impact and probable periodicity of practically happening of identified risks can be plotted on a paper; the resultant visual matrix as a product of these two would be representation of Risk Matrix. And so, Risk can also be defined as the combination of Probability of Risk and Impact of Risk. Initiating actions towards mitigations also does not necessarily guarantee the avoidance of a risk event, it will only significantly reduce the degree of impact that such risk(s) on a department or an organization. While we do realize the need for continual assessment of all risks that accordingly also calls for checks on all mitigation controls thereafter. Buyers and supply chain must take detailed mitigation actions by diligent systems, initiatives and action plans put in place – and can conclude that high risks identified are suitably mitigated to a large extent – as reflected in this report. With a strong risk mitigation strategies in place, we would be ready to face any given supply chain risk event. Risk management is an ongoing process that now will continues through the life of any project. The processes would include risk management planning, identification, analysis, monitoring and mitigation controls. We have undertaken this project with the objective of risk management to decrease the probability and impact of events adverse to our Supply Chain in general and Procurement in particular. The first is mitigation steps that have been taken to lessen the probability of the event occurring. The second is the contingency plan, or a series of activities that we would be further initiating in parallel (prior to the event of possible risk) to or when the identified event occurs. One must also realize that though efforts are made to forecast and identify all potential risks, it is equally important to keep monitoring all possible risks on a scheduled basis, and reported on in the risk assessment table. When such unanticipated risk events are observed or do occur, we will be prepared to respond quickly and effectively. we will be prepared to respond quickly and effectively. The slides are just examples of how to list, grade them and then do a risk table. Best wishes.
Posted on: Tue, 13 Jan 2015 04:14:31 +0000
Trending Topics
Recently Viewed Topics
© 2015