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Title: A Model for Proactive Supply Chain Risk Management
Authors: Pujawan, I. Nyoman 
Geraldin, Laudine H. 
Issue Date: 2007
Publisher: University of the Thai Chamber of Commerce
Source: I. Nyoman Pujawan, Laudine H. Geraldin (2007) A Model for Proactive Supply Chain Risk Management.
Conference: Proceedings of the 2nd International Conference on Operations and Supply Chain Management 
Abstract: Increasingly, companies need to be vigilant with the risksthat could harm the short-term operations as well as thelong-term sustainability of their supply chain. A widevariety of risks could disturb a supply chain from itssmooth operations, ranging from material shortages,delayed transportation, unexpected declining in demand,supplier bankruptcy, natural disaster, terrorist attack, etc.With the increasing complexity of supply chainconfigurations as a result of companies involving morepartners in their operations through outsourcing and othercontract schemes, the supply chains are more exposed torisks, and hence it is imperative for them to have aneffective management of supply chain risks.In this paper, we present a model for risk assessment andmitigation. We modified the well known FMEA modelfor risk assessment and adapt the House of Quality modelfor determining which risk agents are to be prioritized andthen for selecting a set of cost-effective mitigationactions. In the model, each risk event is associated with avalue of severity and each risk agent will have aprobability of occurrence. The correlation of each riskagent and each risk event is determined. We definedaggregate risk potential for each risk agent as a measureof risks caused by a risk agent. The model is applied to alarge fertilizer company in East Java, Indonesia.
Rights: This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
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