Understanding Supply Risk Model: Key Elements and Benefits PPT
This PPT slide, part of the 25-slide Supply Chain Management (SCM): Risk Management Strategies PowerPoint presentation, presents an overview of the Supply Risk Model, emphasizing its importance in today's volatile supply chain environment. It outlines the model's characteristics and benefits, highlighting its focus on potential failures along the supply chain rather than the causes of disruptions. This shift in perspective allows organizations to adopt a more proactive risk management approach.
The model quantifies the financial and operational impacts of disruptions, enabling companies to assess the consequences of a critical supplier's facility being out of commission. By providing a clear risk exposure measure, the model simplifies complex risk assessments, making it easier for decision-makers to understand potential vulnerabilities.
Two core elements of the Supply Risk Model are detailed: Time to Recovery (TTR) and Risk Exposure Index. TTR is defined as the duration required for a specific node—such as a supplier facility or distribution center—to regain full functionality after a disruption. This metric is vital for planning and resource allocation, as it directly impacts operational continuity.
The Risk Exposure Index assigns a value to each node, reflecting the potential impact of its disruption. This index aids in prioritizing risk management efforts, allowing organizations to focus on the most critical areas of their supply chain.
The slide concludes by noting that the Supply Risk Model can accommodate various disruption scenarios by analyzing different Time to Recovery durations. This flexibility enhances the model's applicability across diverse supply chain contexts, ultimately supporting more resilient supply networks.
This slide is part of the Supply Chain Management (SCM): Risk Management Strategies PowerPoint presentation.
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Supply Chain Analysis Supply Chain Management Risk Management Supply Chain Disruption
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