06: Risk handling II - Reactive (2)

Question 1

What is proactive risk managment?
(What is 5e issue, and problems.)

Answer 1

Proactive risk management
- Usually most powerful

But, from the risk identification module, we know that some risks are inherently unknowable and cannot be identified in advance!

–>Proactive risk management cannot address these risks (intentionally)!!

Question 2

What is reactice risk management?

Answer 2

Developing and applying arrangements and procedures that enable a firm to…
- Anticipate, identify/discover a supply chain disruption early and
- respond to the disruption in such a manner that critical business fuunctions contuine with little interuption

Question 3

What are the main elements of reactive risk management?

Answer 3

• Preparation Business continuity planning
• Discovery
• short-term response
• long-term response

Question 4

What is business continuity planning?

Answer 4

• is part of a holistic risk management approach
• focuses on developing plans (“contingency plans”) that allow an organization to continue working, or recover quickly, after a disruption occurred.
• is not a one-shot project: Once it is applied, the process has to be repeated to keep the contingency plans current, viable, and focused

Question 5

What are examples of business continuity planning?

Answer 5

A firm that plans specific actions if a supplier defaults is doing business continuity planning

Question 6

What are the implementation barriers that “prepartion of Business continuity planning faces

Answer 6

• it willl never happen to us
• don´t worry, we will think of something, when it happesn
• you can´t plan for the unforseen
• if we don´t have a desaster, we´ve wasted money
• we are used to things going wrong

Question 7

How can such implementation barriers in the prepartion be overcome? (Process of Business Continuity planning)

Answer 7

implementation barriers: it will never happen to us, we will deal with it when it happens…

can be overcome by means of:

• organizational support (e.g. top management as sponsors)
• unfreezing events: being caught flat-flooted by a serious disruption (9/11)

Question 8

What are the 3 generic steps of business continuity planning?

Answer 8

• prepartion
• implemtation
• monitoring

Question 9

What happens in “prepartion” step of BCP?
(What should we focus on, what is the outcome?)

Answer 9

• People tend to focus on and plan for “catastrophic” events, but most supply chain disruptions are much smaller in scale
• Plan for effect scenarios (e.g., supplier does not deliver) not for specific events
• Generic response “modules”: e.g., communication plans, fire response, supplier defaults
• The outcome is a document that includes a set of flexibleplans for a representative set of effect scenarios

Question 10

How to implement the business continuity planning (2. step: implementation)

Answer 10

• Teaching and training
  
  • Create awareness
  • Employees need to know when to invoke which plan
  • Collaborate with supply chain partners
• Exercises and drills
  - Practice specific skills
  - Familliraization
  - Identify deficiencies

Question 11

What happens in the 3.step Monitoring in BCP?

Answer 11

The business continuity plan is a living document: Keeping it “current” is a major task which takes effort and organizational support

Question 12

What do “Business continuity plans” do?

Answer 12

business continuity plans enable an organization to continue working or recover quickly after a disruption occured

Question 13

What is important in risk handling (reactively) regarding warning signals?

Answer 13

Warning signals of impending supply chain disruptions need to be discovered, interpreted, and acted upon (de minimis vs. precautionary principle)

Question 14

What is the aim of short-term responses?

Answer 14

aim to resume operations, minimize losses, and use learning opportunities

Question 15

What is the “aim” of long-term response?

Answer 15

long-term response, resource dependence theory suggests two strategies:
Buffering and bridging