SUPPLY CHAIN RISK

ASSESSMENT
 Risk Elements that occur within supply chain (Vikulov & Butrin, 2014):
• Supplier risk: delivery schedule, suppliers price, and the different quality specification with
the suppliers.
• Transport risk: Risk associated with the transport that are carrying or distribute company
products. includes the accident in the transportation system.
• Warehouse risk: goods can be damaged in the warehouse because of the inappropriate way
to dock the goods to the warehouse, the change of the regulatory system in the warehouse
like the taxes and other cost that applied to the warehouse system, the loss of goods could be
happen if the security in the warehouse are not guarded heavily, and the last the
miscommunication between the stock of goods in the warehouse with the external division.
• Production risk: The risk that associated with the production within the company like the
quality different with the company standard, overproduction that makes the company can’t
hold the goods into their warehouse, production disruption due to machine failures and
procurement issues.
• Marketing risk: Risk that associated with marketing progress in the company like the
uncertainty of demand so there will be disruption between the production system in a
company, wrong strategy that the company chooses to promote their product, and the
failures that happen in the networking sales between one company with other company.
RISK
RPN RSV
No. Risk Occurrence Severity Detection
(O x S x D) (O x S)

MANUFACTURE
1. Production delays due to lack of material 6 4 3 72 24
2. Incompatibility of components with bill of material 5 4 2 40 20
3. The occurrence of product defects in the production process 7 5 4 140 35
4. Machine failure 4 9 5 180 36
5. Capability of workers in production activities 5 9 4 180 45
INVENTORY
6. Do not check stock inventory regularly for a certain period 4 8 3 96 32
7. Mismatch in stock arrangement 5 7 3 105 35
8. Warehouse process that is not yet structured 4 8 4 128 32
9. Errors in material handling 5 7 4 140 35
10. Limited warehouse capacity 5 8 2 80 40
PURCHASES
11. Error determining vendor 6 8 4 192 48
12. Incorrect amount of material orders 7 6 3 126 42
13. Political instability (trade war) 4 8 5 160 32
14. Cannot fulfill vendor demand quantity 3 6 2 36 18
15. Limited number of vendors owned 5 6 2 60 30
SALES
16. Pricelist error 7 8 3 168 56
17. Delivery quantity error 6 8 3 144 48
18. The occurrence of the bullwhip effect 8 8 5 320 64
19. Error invoicing 6 6 4 144 36
20. Error product identification 5 7 3 105 35
PARETO CHART OF RISK PRIORITY NUMBER
Risk Symbol
Production delays due to lack of
PD
material
Incompatibility of components with
IC
bill of material
The occurrence of product defects in
OC
the production process
Machine failure MF
Capability of workers in production
C
activities
Do not check stock inventory
DC
regularly for a certain period
Mismatch in stock arrangement M
Warehouse process that is not yet
WP
structured
Errors in material handling EM
Limited warehouse capacity LW
Error determining vendor EV
Incorrect amount of material orders IA
Political instability (trade war) PI
Cannot fulfill vendor demand quantity CF
Limited number of vendors owned LN
Pricelist error PE
Delivery quantity error DQ
The occurrence of the bullwhip effect BE
Error invoicing EI
Error product identification EP
PARETO CHART OF RISK SCORE VALUE
Risk Symbol
Production delays due to lack of
PD
material
Incompatibility of components with bill
IC
of material
The occurrence of product defects in
OC
the production process
Machine failure MF
Capability of workers in production
C
activities
Do not check stock inventory
DC
regularly for a certain period
Mismatch in stock arrangement M
Warehouse process that is not yet
WP
structured
Errors in material handling EM
Limited warehouse capacity LW
Error determining vendor EV
Incorrect amount of material orders IA
Political instability (trade war) PI
Cannot fulfill vendor demand quantity CF
Limited number of vendors owned LN
Pricelist error PE
Delivery quantity error DQ
The occurrence of the bullwhip effect BE
Error invoicing EI
Error product identification EP
SCATTERPLOT OF RPN VS RSV
Risk Symbol
Production delays due to lack of
PD
material
Incompatibility of components with bill
IC
of material
The occurrence of product defects in
OC
the production process
Machine failure MF
Capability of workers in production
C
activities
Do not check stock inventory
DC
regularly for a certain period
Mismatch in stock arrangement M
Warehouse process that is not yet
WP
structured
Errors in material handling EM
Limited warehouse capacity LW
Error determining vendor EV
Incorrect amount of material orders IA
Political instability (trade war) PI
Cannot fulfill vendor demand quantity CF
Limited number of vendors owned LN
Pricelist error PE
Delivery quantity error DQ
The occurrence of the bullwhip effect BE
Error invoicing EI
Error product identification EP
No. Category of Risk Risk Mitigation Strategy
Production delays due to lack of material Provide safety stock
Incompatibility of components with bill of material Recheck the product
The occurrence of product defects in the production Identify causes of defect
1. Manufacture process
Check and maintain the machine regularly
Machine failure
Capability of workers in production activities Conduct training for employees
Do not check stock inventory regularly for a certain Regular scheduling is held to check stock
period inventory
Make a stock category according to the
Mismatch in stock arrangement
arrangement method
2. Inventory Identify problems using 7 processes in the
Warehouse process that is not yet structured
warehouse
Errors in material handling
Determine the type of goods with
compatible material handling
MITIGATION
Limited warehouse capacity
Error determining vendor
Organize warehouse layout
Check the vendor list
STRATEGY
Check and communicate with related
Incorrect amount of material orders
parties
3. Purchase Following the conditions of political
Political instability (trade war)
development
Cannot fulfill vendor demand quantity Looking for backing up other vendors
Limited number of vendors owned Keep a good cooperation
Pricelist error Check the quotation
Delivery quantity error Check in different stages
Communicate with the relevant supply
4. Sales The occurrence of the bullwhip effect
chain
Error invoicing Re-check invoices
No. VUCA Risk
Production delays due to lack of material
Political instability (trade war)
1. Volatility
Cannot fulfill vendor demand quantity
The occurrence of the bullwhip effect
Machine failure
Mismatch in stock arrangement
The occurrence of product defects in the production process
Pricelist error
2. Uncertainty
Delivery quantity error
Error invoicing VUCA CLASSIFICATIO
Error product identification
Limited warehouse capacity
Capability of workers in production activities
Do not check stock inventory regularly for a certain period
3. Complexity
Errors in material handling
Warehouse process that is not yet structured
Incompatibility of components with bill of material
Incorrect amount of material orders
4. Ambiguity
Error determining vendor
Limited number of vendors owned