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Managing Risk in the Supply Chain Notes

Institution: KCA University

Course: bachelor of Procurement and Supply Chain

Posted By: SILASCHELAL

Document Type: PDF

Number of Pages: 44

Price: KES 250
  
    

Views: 40     Downloads: 0

Summary

This document is a 44 page pdf file describing Risk Management, the risk identification process and how an organization can mitigate risk in their supply chain process.

RISK IDENTIFICATION
The management of risk has developed and come to the fore of
business thinking over recent years. In particular, risk in supply chains
has attracted attention. Factors such as supply base rationalization,
supply partnerships, and the development of lean and agile supply
chains have increased the dependence of buying organizations on
their supply networks. Disruptions or variability of the supply chain
can have severe consequences for dependent supply chains. In
consequence, the considered management of supply chain risk and
vulnerability is an increasing requirement and an important discipline
in modern business.

Risk and Uncertainty
Risk is defined by CIPS as the probability of an unwanted outcome
happening. Probability is the measure of the likelihood that a given
event or result might occur.
Uncertainty gives rise to risk: situations in which desired outcomes
may not occur and undesirable outcomes may occur. Risk
management involves understanding and analyzing the nature of the
risk involved; calculating the possibility of a risk event occurring (often
by looking at the frequency of similar events occurring in the past);
calculating the impact or consequence of the risk event, and
developing options to offset or reduce the risk. In other words, risk
management is essentially a discipline for dealing with uncertainty
Risk is effectively unavoidable, it can never be eliminated from
business, but can be identified and mitigated: either by reducing the
likelihood of a risk event's occurring (e.g. by placing preventive
controls in place) or by reducing the impact of its occurrence (e.g. by
having insurance and contingency plans in place)
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