Lecture 4 Flashcards
What’s the definition of risk?
In decision theory: a measure of the range of possible outcomes from a single totally rational decision and their values, in terms of upside gains and downside losses
A particular type of hazard or threat
The downside only consequences of a rational decision in terms of the resulting financial losses or number of casualties
What is a robust SCM?
Enables a firm to manage regular fluctuations in demand efficiently under normal circumstances regardless of the occurrence of a major disruption
Does not itself make a resilient SC
What is resilience?
The ability of a SC to return to its original/desired state after being disturbed
Encourages a whole system perspective
Accepts that disturbances happen
Implies adaptability to changing circumstances
What is a robust resilience SC?
Ride out the fluctuations in the SC and revert to normality without the customer being aware of there having been an issue
They are a consequence of building into the supply chain, mechanisms that are able to counter the effect of disturbance
What is end to end risks?
Look at the entirety of a SC as a whole and identify where the weaknesses are
What is an external risk?
?
What are supplier risks?
?
Production problems
Financial losses
Management risks
What are distribution risks?
?
Infrastructure unavailability
Labour unavailability
Cargo damage or theft
What’s internal enterprise risk?
?
What is objective risk?
Identify what the risk is by experts applying a quantitative scientific means
What’s perceived risk?
The imprecise and unreliable perceptions of people
What are the trends to consequences of JIT and lean?
Efficiency
What are the consequences of reducing costs?
Globalisation of supply chain (more complex and vulnerable)
What are the consequences of economies of scale?
Centralisation of distribution and manufacture, lower costs and less flexibility
What are the consequences of outsourcing?
Loss of control of supply chain
