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Proposed Supply Chain Risk Management Process Flow
Supply Chain Risk Leadership Council
20 April 2009
DRAFTDRAFT
P A G E 2
DRAFTDRAFT
We can build on similar risk management processes to create a SCRLC risk management process.
SCC Process RAND ProcessProposed SCRLC
Process
Build the Program
Define the Supply Chain
Define Risk Objectives
Assess Supply Chain Risk
Mitigate Risk
Implement and Monitor
Recognize Existence
Identify
Estimate Likelihood of Occurrence
Prioritize
Develop, assess, and execute management
strategies
Develop Contingency plans
Assess probable consequence/
duration
Monitor
Capture lessons learned and improve
Establish a SCRM Program and Apply
Resources
Define the Supply Chain and Risk
Objectives
Identify Supply Chain Risks
Quantify and Prioritize Risks
Develop and Execute Risk Management
Actions
Monitor Supply Chain Environment for Risks
Note: The RAND process is a draft process under development and should not be released beyond the SCRLC Process team without permission from Nancy Moore.
P A G E 3
DRAFTDRAFT
The risk management process must be iterative to be effective.
Establish a SCRM Program and Apply
Resources
Define the Supply Chain and Risk
Objectives
Identify Supply Chain Risks
Quantify and Prioritize Risks
Develop and Execute Risk Management
Actions
Monitor Supply Chain Environment for Risks
Proposed SCRLC Process
Continuous Risk Monitoring
Reassessment of management actions
Reassessment of risk exposure
Reassessment of risk sources
Reassessment of supply chain
Reassessment of risk program
The timing of each iteration should be
dictated by the corporate risk
strategy
The timing of each iteration should be
dictated by the corporate risk
strategy
P A G E 4
DRAFTDRAFT
The proposed SCRLC process should cover all elements of a comprehensive risk management program
Establish a SCRM Program and Apply
Resources
Define the Supply Chain and Risk
Objectives
Identify Supply Chain Risks
Quantify and Prioritize Risks
Develop and Execute Risk Management
Actions
Monitor Supply Chain Environment for Risks
Proposed SCRLC Process
• Recognize risk management as a priority• Secure executive support for risk management program• Secure resources necessary to execute risk management program
• Define the supply chain scope• Map the supply chain • Define the objectives of managing risk in the subject supply chain
• Comprehensively review the supply chain to identify risks• Document identified risks to the extent possible
• Quantify each risk in terms of probability of occurrence and potential impact• Use the quantification of the risks to prioritize the risks according to defined objectives
• Develop risk management actions consistent with each risk’s priority• Define each action’s value in terms of reducing the probability and impact of the risk• Develop and execute an implementation plan for the identified actions
• Define monitoring requirements and action thresholds• Continuously monitor the supply chain environment for risk events or precursors. • When thresholds are triggered, execute applicable mitigation actions• Document results for after action review and program improvement
P A G E 5
DRAFTDRAFT
The proposed SCRLC process can map to the defined working groups
Establish a SCRM Program and Apply
Resources
Define the Supply Chain and Risk
Objectives
Identify Supply Chain Risks
Quantify and Prioritize Risks
Develop and Execute Risk Management
Actions
Monitor Supply Chain Environment for Risks
Proposed SCRLC Process
Manufacturing, Transportation and Logistics Resiliency
Preparedness, Business Continuity, and Recovery
Planning
Product and Materials Resiliency
Regulatory Compliance
Supply Chain Monitoring & Crisis Management
Supply Chain Risk Quantification & Measurement
SCRLC Working Groups
Supply Chain Security
P A G E 6
DRAFTDRAFTACQUISITION • FACILITIES & ASSET MANAGEMENT • FINANCIAL MANAGEMENT • INFORMATION & TECHNOLOGY • LOGISTICS • ORGANIZATIONS & HUMAN
CAPITAL
THE OPPORTUNITY TO MAKE A DIFFERENCE HAS NEVER BEEN GREATER
