Tag Archives: supply chain risk management

Calculating the Value-at-Risk

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Revised on: 2010-11-16

Some of you may remember that I posted about the SCOR Framework for Supply Chain Risk Management earlier this year, and today I will take a closer look at it again, because I recently found a post on scdigest.com, where Mitul Shah, one of the key members of the working group behind the framework, explains how this risk management framework can be put into use to calculate the Value-at-Risk (VaR). This Value-at-Risk is an important construct in estimating the economic implications of supply chain risks and in implementing the best strategies for supply chain risk management. This post is based on those three posts and my personal communications with Mitul Shah, Manager at Accenture Consulting.

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Book Review: Procurement Risk

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Revised on: 2015-09-04

“Do yo like living dangerously? Then you should read this book. It exposes you to over seventy types of risk you  you can take in your business life.” Those are the opening words of the most recent book on my night stand.  Written by Richard Russill, the title Procurement Risk is perhaps misleading, as this book risk is just as much about supply chain risk or enterprise risks in general. In fact,  the book makes a strong argument for procurement risk management being just a short step away from business continuity management. Not only will this book help procurement professionals to lift their head from their desks and gain a wider perspective on possible ramifications of their purchasing decisions, it will also help top managers to seeing procurement as a crucial contributor to a company’s well-being and competitive advantage.

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Supply Chain Risk and Vulnerability in Indonesia

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Revised on: 2015-09-10

Indonesia. 17000 islands spread over a distance of 6000 kilometres. Mega-cities and remote desolate villages side by side. Congested freeways and dirt roads just a short distance apart. Home to frequent earthquakes and volcano eruptions, mudslides and flooding in the rainy season. A logistical challenge for any supply chain, if not a logistical nightmare, and thus prone to supply chain disruptions. One would think that supply chain risk management would find fertile soil here, but does it? According to what Rofyanto Kurniawan and Suhaiza Zailani wrote in Supply Chain Vulnerability and Mitigation Strategy of the Manufacturing Firms in Indonesia: Manager’s Perspectives, Indonesia still has a long way to go.

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Supply Chain Risk Management Forum

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Revised on: 2015-09-12

Is your supply chain risk keeping you up at night? Maybe it’s time to learn how risk management can improve business performance? For that you may want to consider attending the Supply Chain Risk Management Forum in Toronto, Canada on March 29, 2011. The conference is a follow-up on last year’s successful Strategic Supply Chain Management Forum, and in response to the positive feedback and suggestions of attendees and sponsors, this year’s one-day event is focused specifically on a current critical supply chain issue: supply chain risk.

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German Autos at risk? Perhaps not.

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Revised on: 2015-09-22

The German automotive industry. Volkswagen, Mercedes, Porsche, Audi, BMW. The embodiment of craftsmanship, functionality and reliability. Cars that work and an industry that knows how to make it work. But how about supply chain risk management? Does that work equally well? That is what Jörn-Henrik Thun and Daniel Hoenig set out to investigate in daptive Fit Versus Robust Transformation: How Organizations Respond to Environmental Change. Interestingly, the results show that the group using reactive supply chain risk management seems to do better in terms of disruptions resilience or the reduction of the bullwhip effect, whereas the group pursuing preventive supply chain risk management seems to do better as to flexibility or safety stocks.

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State of the art in SCRM?

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Revised on: 2015-09-12

A severe supply chain disruption has hit my own blog: More than a month without a post. It’s not that there is so little to write about, it’s just that there is so little time to do it, which is why I’ve decided to reurn to a once weekly posing schedule. Nonetheless, what better occasion could there be to resume my posting than the discovery of an article proclaiming to provide a review of the state of the art in supply chain risk management? The literature review and conceptual framework developed by Hans-Christian Pfohl, Holger Köhler and David Thomas clearly identifies the main principles of SCRM and develops a framework and definitions for disturbance, disruption, security, resilience and risk. Supply chain risk management, so they say, is a process with evolutionary steps, involving no less than 17 underlying principles. Phew…

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Risk management: core competence?

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Revised on: 2015-09-03

Is risk management overlooked as an important source of competitive advantage? That is the question sought answered by Donald Lessard and Rafael Lucea in their recent paper on Embracing risk as a core competence: The case of CEMEX. While the case itself is interesting, what the paper does highlight most is that instead of shedding risk, companies should accept risk as an opportunity. It should be welcomed, not feared. Why?

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Measuring supply chain risk management

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Revised on: 2015-09-09

Today’s article is a continuation (or should it rightfully have been the precursor?) of an article I presented two weeks ago. Supply chain risk management and performance: A guiding framework for future development is written by Clare Brindley and Bob Ritchie. In so many ways it is very similar to An emergent framework for supply chain risk management and performance measurement, another article by Clare Brindley and Bob Ritchie that has previously been reviewed on this blog, but in so many other ways it is also very different.

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Supply Chain Risk Management in six steps

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Revised on: 2015-09-22

Supply management is not just about acquiring goods and services at the best possible price. It’s also about identifying possible disruptions to the supply chain and taking steps to mitigate them. So said James Kiser and George Cantrell in their 2006 article Six Steps to Managing Risk, where they discussed six steps that a company can take to build a plan for dealing with potential supply disruptions. While the article may be lacking in academic depth, it makes up for it in its hands-on managerial approach.

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Measuring supply chain risk management

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Revised on: 2015-09-09

This paper was suggested by one of my readers, and upon reading it I must admit that it IS one of the better papers on supply chain risk management I have come across this year: An emergent framework for supply chain risk management and performance measurement by Bob Ritchie and Clare Brindley. Not only do the authors convey in a clear and precise manner what supply chain risk management is all about; they also construct a framework that provides a description of the factors that affect the nature of the risk management responses in particular situations.

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