Question

Risk analysis card supply chain management

Answer 1

All of the firms in this study have developed and monitor a set of performance metrics to maintain a risk profile for their supply chains. They do so by using an assortment of tools and techniques such as: initial supplier evaluations, QS audits, industry benchmarking, supplier questionnaires, report cards, capacity planning, lead-time analysis, financial risk assessment, business continuity plans, risk analysis based on accounts payable performance, historical data, technical capability assessment, on-site capability reviews, forecasting techniques and analysis, data tracking with customers to identify demand trends, supplier performance measurement, etc. The majority of the firms also used supplier risk rankings, similar to credit scores used in the financial industry, to measure suppliers on stability, contingency planning, and on-target delivery performance. These tools allow the firms to ask some basic questions such as: Do suppliers maintain consistent quality and delivery performance and is lead-time volatility increasing? While most of the firms track this type of performance through supplier scorecards to monitor leading indicators that impact risk, none had an ongoing risk-review process to ensure that they keep their risk profile within an optimal range of economic impact.