06: Risk handling II - Reactive: Managing disruptions and Monitoring

Question 1

What happens “long-term” after a supply chain disruption? In the adaption process

Answer 1

long-term adaption after the supply chain disruption: Context, process, and content

1.Event:

2.Adaption process:
Context then the response process starts and the result os the response content

Question 2

What is the “resource dependence theory”? (Long-term response
(What are the two strategies)?

Answer 2

Recource dependenc theory differentiates between buffering and briding strategies

• buffering: change yourself
• bigding: change your relations with the environment

Question 3

What is the “buffering strategies”?

Answer 3

Buffering:
is an attempt to manage risk by establishing safeguards that protect the firm’s technical core from environmental turbulence.

• Increase tolerance to environment
• Increase protection of technical core

Question 4

What are “bridging strategies”?

Answer 4

Bridging
is an attempt to manage vulnerabilities by creating a “bridge” between oneself and the exchange partners

–>Gain more control over the inter-organizational relationship

Question 5

What are eexamples of “bridging strategies”?

Answer 5

Examples:
relationship maangement(improving information exchange, supplier development efforts, vertical integration)

Question 6

What are examples of “buffering strategies”?

Answer 6

Examples:
- Security
- Operational strategies (increasing stock levels, searching for alternative supplier)
− Hedging

Question 7

What does it mean, when “firms are interpreation systems?

Answer 7

After scanning comes the interpreation process:

• Interpretation gives meaning to the
  environmental data
• Firms differ in their interpretation
  capabilities

Question 8

What is the “management process” of a focal firm?

Answer 8

1. Scanning:
   - Monitoring the environment
   - Tracking the development of unexpected events
   Firms differ in their approach to monitoring (organizational
   intrusiveness):
   − Active approach
   − Passive approach

2.Interpretation

3.Action:
- knowledge about actio-outcome relationship is applied
- application of theories in use
- application of hard-wired programs

4.Learning:
–>Interpreation should *generate experiences that can be used for learning

Question 9

What are “supply chain risk orientations: what are organizational features that support reactive risk mgmt

Answer 9

Organizational featuresthat support reactive risk management

• Communication
• Sensitivity to risks
• Flexibility
• Learning organization

Question 10

What are the 2 supply chain risk orientations: organizational features that support reactive risk mgmt
Communication and “sensitivity to risks”?

Answer 10

Communication
- Blame-free: Don’t shoot the messenger (psychological safety)
- Communication about errors must be open, positive, and free-flowing
- fine-grained information transfer

Sensitivity to risks
- In analogy to quality management: Risk management is everybody’s concern
- Joint problem solving

Question 11

What are the 2 supply chain risk orientations: organizational features that support reactive risk mgmt
Learning organization and Flexibility?

Answer 11

Learning organization
- Zeal to learn from negative events (“preoccupation with failure”)
- Continuous improvement
- Training of people

Flexibility:
- Rules cannot cover every situation
- Organization needs to allow decentralized decision
making

Question 12

What is the “typology of people who support organizational learning?

Answer 12

• Noisy complainers: Repair problems right away and then let every relevant person know that the system failed
• Noisy troublemakers:Always point out others’ mistakes. Problem: Not good for team climate
• Mindful error-makers: Tell managers about their own mistakes, so that others can avoid making them too.
• Disruptive questioners: They constantly ask why things are done the way they are done. Is there a better way of doing things?

Question 13

What does monitoring assure?

Answer 13

Continuous monitoring assures that risk management stays effective and efficient over time

Question 14

What do Initial risk management
initiative do?

Answer 14

• Risk identification
• Risk assessment
• Decisions about risk handling strategies

Question 15

What are the 3 tasks of supply chain risk monitoring?

Answer 15

1. Performance measurement of implemented risk handling strategies
2. Continuous improvement
3. Adaptation to changes in environment and firm’s
   objectives

Question 16

What is the 3 tasks of supply chain monitoring? (performance measurement detail

Answer 16

• Confirm proper implementation
• Review performance (effectiveness and efficiency)
• Performance measurement process needs to bepractical, not overly burdensome, easy to understand and to maintain

Question 17

What are the 3 tasks of supply chain monitoring? (continous improvement detail

Answer 17

Vicarious learning from
− Supply chain partners
− Competitors

Experience-based learning:
Usage of newly acquired experiences to generate knowledge

Question 18

What is the 3. tasks of supply chain monitoring? (adaption to changes)

Answer 18

Adaptation to changesin the firm’s environment and objectives

• Risk identification, assessment, and handling decisions have to be continuously modified in the light of feedback from the environment
• Monitor status of identified risks and continuous reassessment
• Identify and evaluate new risks