Written by: Terry Weiner The following post is #6 of a series and discusses supply chain risk management strategy. This series of posts provides an overview of the Supply Chain Optimization process and previews some of the concepts and tools that are part of the Manufacturing Extension Partnership (MEP) Supply Chain Optimization Initiative. Click here to read earlier posts. |
Risk is defined as “An undesirable situation or circumstance that has both a likelihood of occurring and a potentially negative consequence.” Over the last two years we have seen volcanic eruptions in Europe, flooding in Thailand, earthquakes and tsunamis in Japan, hurricane Sandy on the east coast of the USA, and a typhoon in the Philippines. Each of these dramatic events had major negative consequences, and also resulted in serious supply chain interruptions.
Unless businesses whose supply chains were in these areas were prepared with a Risk Management Strategy, they undoubtedly suffered major interruptions in their businesses.
What safeguards exist in your operations to manage risk? Have you identified the risks that could impact your business? Some of the common risks that need to be considered are:
When supply chains are disrupted and businesses are impacted, they may, or may not be able to bounce back to where they were before the event. The survivability of the company depends solely on the company’s resilience towards the disruption and ability to manage risk events.
Risk events will happen. Are you prepared to deal with them? If you have a current Risk Management Plan, you will be ahead of the game.
What's Next?
How Do You Determine Total Cost of Ownership? |
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How do I Assess Supply Chain Maturity? | |
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What are the "Twin Killers" of an Efficient Supply Chain? | |
The Final Link - Creating Supply Chain Visibility |
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How Can You Determine Supply Chain Optimization vs. Supplier Development? |
Terry Weiner is a Senior Consultant with California Manufacturing Technology Consulting® (CMTC). He has over 20 years experience in process improvements, quality management implementation and supply chain optimization.