Supply chain processes risk assessment management

Schoenherr T, Tummala V, Harrison T (2008) Assessing supply chain risks with the analytic hierarchy process providing decision support for the off shoring decision by a US manufacturing company. J Purchasing Supply Manage 14 100-111... 

I met with DHS S T representatives several times early in the study process to discuss the statement of task, data availability, and the departments objectives in commissioning this study. Based on these discussions and from discussions with DHS representatives at the committee s first meeting, it was agreed that this study should complement and not attempt to duplicate other ongoing activities such as the DHS Risk Analysis and Management for Critical Asset Protection (RAMCAP) and Environmental Protection Agency s (EPA s) Off-Site Consequence Analysis. Thus, the committee did not attempt to assess the effectiveness of current protective measures although called for in the statement of task this was a part of the DHS RAMCAP effort, which DHS representatives made clear should not be duplicated. As the statement of task indicates, the focus of this review is on the vulnerabilities of the supply chain as a whole rather than the vulnerability of individual chemical plants. 

A survey of over 3,000 senior executives undertaken by the consultancy company McKinsey in 2006 reported that they believed their companies faced growing risk to disruptions to their supply chains. However, the same survey found that in many cases companies had inadequate processes in place for the management and mitigation of that risk. Whilst most organisations recognise the need to regularly assess their risk profile, that assessment has tended to be focused on broader regulatory and financial risk issues rather than supply chain vulnerability. 

The need to manage risks in processes and projects is inherent in most organizations and supply chains. A key characteristic of risks in processes and projects is that selected choices for planning and managing may intrinsically be more risky than others. Assessing risks helps understand how to shift from a risky plan to a less risky plan (Chapman and Ward 1997). 

---