Class #2

Question 1

Having identified potential risks, what is next?

Answer 1

Analysis - need to analyze each risk and determine the likelihood and consequence i.e. Bow-Tie Risk Analysis Method

Question 2

Bow-Tie Method looks at 2 risks

Answer 2

1) Inherent risk - risk in absence of any
treatment (i.e. loss control)
2) Residual risk - risk remaining after treatment

Question 3

Remember 5 ways to handle risk:

Answer 3

• Avoidance
• Retention (active / passive)
• Non-Insurance transfer to 3rd party
• Loss control (pre and post loss)
• Insurance

Question 4

In evaluating risks one must consider the business’s …?

Answer 4

Risk tolerance

Question 5

Risk tolerance graph

Answer 5

p. 65

Question 6

The use of the risk tolerance concept?

Answer 6

Allows prioritization of risks - if low, business may decide to take no further action - i.e. passive retention

Question 7

What may higher risks warrant in the risk tolerance concept?

Answer 7

(1) some type of “buffering” i.e. active retention - use of multiple suppliers for example, or building inventory.
(2) Avoidance

Question 8

3 Basic Elements of Supply Chain Risk Management Program (Blue bell ice cream example)

Answer 8

1. Protect the supply chain - have a backup, alternative means of supplies.
2. Response to unexpected events.
3. Continuing operations through to recovery

Question 9

Protecting and Securing the Supply Chain - essential because

Answer 9

1. Prevents loss from theft or damage

2. Prevents unauthorized intrusion - contraband…

Question 10

Protecting and Securing the Supply Chain - Elements

Answer 10

(1) Physical Security - warehouse, controlled entry and exit, guards, adequate lighting, video surveillance.
(2) Access Control - control entry and exit, especially visitors.
(3) Personnel Security - verified background checks - they should also be periodic
(4) Education and Training - you need to educate your employees to look out for things
(5) Procedural Security
(6) IT Security
(7) Business Partner Security
(8) Conveyance Security