Analyse The Main Operational Risks In Supply Chains

Front 1

Contract Failure includes?

Back 1

Contract Failure Risk,
Legal Risk,
Negotiation Risk.

Front 2

Contract Failure Risk includes Factors such as:

Back 2

Capacity and capability of prospective suppliers,
Percentage of supplier capacity utilised by the contract,
Likelihood of unanticipated demand,
Supplier lead times and flexibility,
Supply risks affecting suplpy chain or suppliers,
Accuracy and clarity of specs,
Vulnerabilities in Supply chain quality assurance,
Accuracy of scheduling and forecasting,
Quality, reliability and transparency of data,
Cost management,
Project and contract management effectiveness

Front 3

Legal risk

Back 3

Poor cotract development and contracting process,
Unmanaged battle of the forms,
Poor contract admin and change control,
Lack of adequate protection of IP,
Issues of liability,
Cost and relational damage from disputes

Front 4

Negotiation Risk

Back 4

Risk of 'losing out',
Unacceptabel or unfeasible concessions,
Reaching an impasse,
Adversarial relations,
Conflict or divergent tactics,
Ethical and reputational risk,
Compliance Risk

Front 5

Financial Risk includes?

Back 5

Currency and exchange rate risks,
Credit Risks,
Supplier financial instability - Springate model,
investment Risk

Front 6

Springate model

Back 6

A - Ratio of working capital to assets,
B - Ratio of net profit before interest and taxes to total assets,
C - Ratio of net profit before taxes to current liabilities,
D - Ratio of sales to total assets,

Z = 1.03A + 3.07B + 0.66C + 0.4D,

Low score indicates risk of insolvency

Front 7

Definition of Quality

Back 7

Fitness for purpose,
Confirmance to spec or requirement,
Comparative excellence

Front 8

Costs of Quality

Back 8

Costs of Appraisal and Prevention,
Cost of Failure: Internal & External

Front 9

Approaches to managing quality failure risk

Back 9

Quality Control - Reactive,
Quality Assurance - Proactive,
Quality Management - includes both above,
Total Quality Management - Busines Philosophy

Front 10

Service Quality Risk - SERVQUAL Model

Back 10

Gap between buyer and supplier perceptions of quality,
Gap between Concept and specification,
Gap between specification and performance,
Gap between communication and performance,
Gap between buyer expectations and perceived service

Front 11

Supply Risk may arise from?

Back 11

Inadequate buyer-side processes for E, A and S,
Inadequate buyer & Supplier side processes for Contract and performance management,
Unanticipated levels of demand,
Unanticipated shortages or price fluctuations,
Unmanaged performance issues,
Excessively lean supply chains,
Inadequate provisions for physical security,
Natural or human caused disasters,
Market risks,
Commodity risks,
Transportation risks,
Lack of lesson learning and continuous improvement.

Front 12

Logistics complexity issues?

Back 12

Global supply chains are increasingly lengthy and complex,
Lean thinking has reduced waste, but at the expense of safety stock to react to shocks,
Effective delivery is increasingly dependant on ICT infrastructure.

Front 13

Technological considerations?

Back 13

Hardware and software theft,
Cyber attack and data theft: Hacking, Viruses, Phishing.
Technology failure: Teething, Performance, Compatibility problems, System breakdown.

Front 14

Implementation of New technology checklist?

Back 14

Objectives,
Personnel,
Relationships,
Technology,
Finance,
Power

Front 15

Information risks include risks to?

Back 15

Intellectual capital,
Integrity and security of data,
System failure,
Compliance,
Integrity and value of data,
Design and implementation of MIS,
Turnover of key personnel,
Loss of organisational knowledge.

Front 16

Supply chain relationships risks?

Back 16

Single sourcing arrangements,
Outsourcing arrangements,
Long-term partnership relations,
Supplier tiering,
Supplier switching.

Front 17

Reasons for outsourcing failure?

Back 17

Failure to distinguish between core and non-core activities,
Failure to identify and select a suitable supplier,
Unrealistic expectations of outsource provider,
Inadequate & Inappropriate t's & c's in contract,
Lack of well defined KPI's,
Lack of management skills to control supplier performance & relationships,
Gradual surrender of control of performance of contractor.

Front 18

Key elements in mitigation of outsource risk?

Back 18

Decision based on clear objectives and measurable benefits,
Rigorous supplier selection,
Rigorous supplier contracting,
Clear and agreed service levels,
Continuous and rigorous monitoring of service delivery and quality,
On-going contract and supplier management,
Contract review.

Front 19

Offshoring risks?

Back 19

Protection of IP,
Additional transport and logistical risks,
Political instability,
Operational risk from difficulty to monitor and control,
Operational, reputational and compliance risk arising from cultural, legal and linguistic differences.

Front 20

Both parties might need to?
(With regards to Long-term supply relationships)

Back 20

Analyse the most appropriate type of relationship,
Careful partner evaluation, selection, contracting and relationship management processes,
Put into place multiple or back-up sourcing arrangements,
Establish joint performance measures and continuous improvement targets and incentives,
Use legal means to protect IP rights and confidentiality,
Joint continuity and contingency planning,
Prepare exit strategies for managing termination.