Managing Supply Chain Risk

Did you know that the Supply Chain Council (SCS) has extended their renown SCOR-model  to Supply Chain Risk Management? I just found out yesterday. A presentation from the the SCS website, available for download,  details in full the changes to the SCOR model to account for Risk Management and how it integrates with the SCOR model risk enablers. As far as i am able to tell, this is an excellent framework for Supply Chain Risk Management, and it is worth taking note of.

The Supply Chain Council

The Supply-Chain Council (SCC) is a global non-profit consortium which has developed many supply chain methodologies, along with diagnostic and benchmarking tools, and SCC has established the supply chain world’s most widely accepted framework for evaluating and comparing supply chain activities and their performance: the SCOR process reference model.



The SCOR model has now been extended to incorporate supply chain risk management.

The SCOR-Model for Supply Chain Risk Management

The dynamic, global environment in which our supply chains operate in today lends itself to a higher potential for risk not only for us but also for our customers, suppliers and competitors. However, by accounting for risk early on in the product development process much of the risk encountered by the supply chain could be minimized if not eliminated:

Interestingly, this risk framework resembles many of the risk frameworks used in supply chain risk research, for instance in Martin Christopher’s many articles on supply chain risk.

Also, Sheffi’s disruption profile reappears in a slightly altered form:

More on Sheffi’s thinking can be found in my post on the resilient enterprise.

The model in detail

The presentation from the SCS website, available for download below, discusses how to identify, assess & mitigate risk through enablers in the SCOR model and how it can complement an organization’s Enterprise Risk Management program. More background information can be found in this paper written by the Supply Chain Council Risk Research Team, see download link below. In another post, Mitul Shah shows how to calculate the Value-at-Risk, using the SCOR Risk Methodology.

Links

Reference

Morrow, D., Wilkerson, T. and Davey, M. (2009) Managing Risk in Your Organization with the SCOR® Methodology. Supply Chain Council.

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