Supply Chain Risk and Resilience Flashcards
Risk
Probability x impact
The first is related to the chances of an event happening that will have negative consequences.
The second is related to chances of an event happening, which will have both negative and positive consequences
Need to understand the uncertainty, impact, nature, context
Risk Assessment
2010 Volcano Eruption
BMW was forced to slow
production because leather seat covers from South Africa and transmissions and other parts from Europe were grounded
Tesco experienced disruptions in produce and flower imports from Kenya
Italian producers of mozzarella and fresh fruits lost about $14 million each day
Migros, the Swiss supermarket chain, saw shipments of green asparagus from the U.S. affected, while cod from Iceland and fresh tuna from Southeast Asia were also impacted
Supply Chain Evolution and Challenges
Benefits
Availability of a variety of products and services
Affordability
Huge employment
Concern
Global disruptions
Huge wastage ($680 billion of food)
Resource scarcity
GHG emission
Product safety- contaminated food
Counterfeit products
Food Wate Visibility Challenges: Potato Supply Chain
Short life-cycle
High product differentiation
quality and quantity variability on farm inputs and yields, and on consumers’ preferences,
National/international legislation, regulations and directives regarding food safety and public health, as well as environmental issues (e.g., carbon and water footprints)
Four Key Waste/Loss Challenges (that could be controlled, e.g. not climate conditions/weather)
Seed Quality The quality of the seed determines the susceptibility to diseases and the yield per hectare.
Water – Irrigation Availability Availability of irrigation is essential to yield’s quality and quantity (e.g. East Anglia is a water scarce area); proper irrigation timing helps prevent diseases (e.g. common scab).
Soil and Land Selection Test and monitor soil (e.g. de-stone land, soil type and nutrition, soil pathogens).
Supply Chain Cooperation & Coordination Retailers’ orders fluctuate widely, thus resulting in increased wastage/losses.
Solutions
Identofy supply chain characteristics
Identify risks
Evaluate risks
Choose relevant mitigations
Evaluate impact of chosen mitigations
Plan mitigations
Monitor risks and mitigations
Risk identification
Identify supply chain characteristics
Details
Risks linked to theme
Details
Primary Risk level evaluation
Risk assessment
High and medium risks
Potential impact
Probability of occurance
Risk score
Risk Mitigation
Select risk
Proposed mitigation from lit
chosen mitigation
Category
Way to implement
Costs
Risk after mitigation
Risk Decrease
Risk Monitoring
Top risks
Associated mitigation
Mitigation details
Mitigation Ownership
Mitigation Schedule
Links between different projects
Risk Evolution Visualisation
Supply chain risk: management and policy
Make to stock- excessive inventory
Poor communication with suppliers- production disruption
Plants are working close to full capacity- risk of not satisfying high demand
Bad communication with the workforce- low motivation
Bad communication btwn R and D an dproduction: delay to NPI
Product, Process, Technology Level Characteristics
Specific H&S requirements- product recall
Critical raw material: running out
Unreliable machinery: risk of equipment failure
High amount of energy or raw materials with highly volatile prices: operational cost fluctuation
Quality is important: high rejection rate
Process involving toxic products: negative environmental
A new process line or inexperienced workers involved@ facing lack of experience affecting production
Key operator required for the process: risk of skill shortage due to operator absence
Geography
Developing country: inappropriate working environment
Natural disaster:
Terrorist attack
Unstable political situation: affect production
Production costs paid in foreign currency: fluctuation would impact costs
Constrained regulatory environment: challenges
Risk Mitigation Strategies
Increase capacity
Acquire redundant suppliers
Increase responsiveness
Increase inventory
Increase flexibility
Pool or aggregate demand
Increase capability
Factors not considered
Risk Interdependencies
Brand Loyalty
Loss of market share
Litigation risk
