Supply Chain Risk

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Questions and Answers

Which type of risk directly addresses potential harm to a company's image due to unethical sourcing?

  • Operational risk
  • Reputational risk (correct)
  • Technological risk
  • Financial risk

What is the primary focus of mitigating risk in supply chain management?

  • Monitoring risks.
  • Reducing the likelihood or impact of identified risks. (correct)
  • Evaluating the impact of risks.
  • Identifying potential risks.

Which risk category includes potential disruptions caused by labor strikes and skill shortages?

  • Human and labor risks (correct)
  • Supply chain network risks
  • Financial risk
  • Geopolitical and regulatory risk

A company experiences a significant increase in raw material costs due to unexpected inflation. Under which risk category does this event fall?

<p>Financial risk (D)</p> Signup and view all the answers

Which of the following is an example of a geopolitical and regulatory risk that could affect a global supply chain?

<p>New trade barriers imposed by a government. (D)</p> Signup and view all the answers

A company's reliance on a single supplier for a critical component represents which type of risk?

<p>Supply chain network risks (A)</p> Signup and view all the answers

A manufacturer faces a shortage of semiconductors due to failures at a major chip fabrication plant. This exemplifies which type of supply chain risk?

<p>Technological risks (B)</p> Signup and view all the answers

How does effective monitoring of supply chain risks contribute to overall risk management?

<p>By ensuring mitigation strategies are effective. (B)</p> Signup and view all the answers

Which strategy is most directly aimed at reducing the likelihood or impact of identified supply chain risks?

<p>Risk mitigation (C)</p> Signup and view all the answers

What is the primary goal of 'assessing risk' in the context of supply chain management?

<p>To evaluate the potential impact and likelihood of identified risks. (A)</p> Signup and view all the answers

A sudden increase in demand for a particular product can have which of the following effects on the supply chain?

<p>Prices increase and inventory decreases. (C)</p> Signup and view all the answers

Which of the following risks is most directly associated with climate change?

<p>Natural disaster (D)</p> Signup and view all the answers

What is the focus of the SCOR model in supply chain management?

<p>Supply chain operations reference (D)</p> Signup and view all the answers

Which of the following factors is MOST likely to impact logistics and transportation risks?

<p>Coordination issues (D)</p> Signup and view all the answers

What is the primary goal of the 'Supplier Evaluation Process'?

<p>Assessing and selecting suppliers based on predefined criteria (C)</p> Signup and view all the answers

Which risk is directly associated with the failure to comply with environmental regulations?

<p>Geopolitical and regulatory risk (A)</p> Signup and view all the answers

What is the benefit of monitoring risk in supply chain management?

<p>Continuously tracking risk factors (D)</p> Signup and view all the answers

Which technological risk arises from rapid advancements that render existing systems obsolete?

<p>Obsolescence (B)</p> Signup and view all the answers

Which set of risks is most directly affected by natural disasters?

<p>Environmental and Natural Disaster risks (D)</p> Signup and view all the answers

What is the potential result of failing to address product quality issues?

<p>Reputational damage. (A)</p> Signup and view all the answers

In supply chain risk management, what does 'Assessing risk' involve?

<p>Determining the potential impact and likelihood of risks. (D)</p> Signup and view all the answers

What is the primary goal of 'mitigating risk' in supply chain management?

<p>To reduce the likelihood or impact of identified risks. (B)</p> Signup and view all the answers

What is the purpose of monitoring risks in supply chain management?

<p>To ensure that mitigation strategies are effective. (D)</p> Signup and view all the answers

How can geopolitical instability pose a risk to a global supply chain?

<p>By leading to trade barriers and tariffs. (A)</p> Signup and view all the answers

If a company's sales operations planning (S&OP) process is ineffective, what is the most likely direct consequence?

<p>Poor inventory management (A)</p> Signup and view all the answers

How does adopting a 'Just in Time' (JIT) inventory system affect supply chain risks?

<p>It makes the supply chain more vulnerable to disruptions and requires better coordination. (C)</p> Signup and view all the answers

How do sustainability risks impact the supply chain?

<p>They can lead to increased costs due to resource scarcity and regulatory pressures. (D)</p> Signup and view all the answers

What is the primary disadvantage of relying on a single supplier for a critical component?

<p>Reduced bargaining power due to lack of alternatives. (B)</p> Signup and view all the answers

What is 'Kraljic Product' analysis primarily focused on?

<p>Categorizing purchased materials based on risk and profitability. (A)</p> Signup and view all the answers

What is a key objective of Sales and Operations Planning (S&OP)?

<p>To align supply and demand (A)</p> Signup and view all the answers

Transparency risks fall under which of the following categories?

<p>Reputational risks (B)</p> Signup and view all the answers

What is the main difference between identifying and assessing risk?

<p>Identifying risk finds what the risks are while assessing risk evaluates their potential impact and likelihood. (A)</p> Signup and view all the answers

What factor determines ethical sourcing risks?

<p>Reputation issues (C)</p> Signup and view all the answers

Why is it important to study warehouse technology in supply chain management?

<p>To optimize warehouse layout designs, such as I-shaped and U-shaped configurations (A)</p> Signup and view all the answers

What is 'Total Quality Management'?

<p>A management philosophy focused on continuous improvement and customer satisfaction (D)</p> Signup and view all the answers

What are the different aspects of supply chain that are related Technological risks?

<p>Cybersecurity, obsolescence (B)</p> Signup and view all the answers

What would be an example of a Strategic risk?

<p>Brand Reputation (D)</p> Signup and view all the answers

Flashcards

Operational Risk

A type of risk arising from day-to-day business activities.

Strategic Risk

Risk resulting from strategic decisions and their implementation.

Financial Risk

Risk tied to financial factors like credit, currency, and cost.

Geopolitical and Regulatory Risk

Risk due to political instability, trade barriers, and regulatory issues.

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Environmental and Natural Disaster Risks

Risks associated with natural disasters, climate change, and sustainability.

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Technological Risks

Risks from cybersecurity, tech failures, and obsolescence.

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Supply Chain Network Risks

Risks in the supply chain itself, such as single points of failure and coordination issues.

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Human and Labor Risks

Risks related to labor strikes, skill shortages, and health and safety.

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Reputational Risks

Risks to a company's reputation due to product quality, ethical sourcing, and transparency.

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Assessing Risk

Evaluating the potential impact and likelihood of an identified risk.

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Mitigating Risk

Reducing the likelihood or impact of identified risks.

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Monitoring Risk

Continuously tracking risk factors to ensure mitigation strategies are effective.

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Study Notes

Types of Risk

  • Supply chains are exposed to operational, strategic, and financial risks

Financial Risk

  • Financial risks include credit risk, currency risk, and cost fluctuations

Geopolitical and Regulatory Risk

  • Geopolitical and regulatory risks involve political instability, trade barriers and tariffs, and regulatory compliance

Environmental and Natural Disaster Risk

  • Environmental and natural disaster risks are from natural disasters, climate change and sustainability concerns

Technological Risk

  • Technological risks are from cybersecurity breaches, technological failures and obsolescence

Supply Chain Network Risk

  • Supply chain network risks come from single points of failure, poor coordination, and logistics/transportation issues

Human and Labor Risk

  • Human and labor risks concern labor strikes, skill shortages, and health/safety issues

Reputational Risk

  • Reputational risks include product quality issues relating to baby food, unethical sourcing, and lack of transparency

Effects of Risk

  • Risk causes demand and prices to fluctuate in both directions

How To Manage Risk

  • Risk management includes identifying, assessing, mitigating, and monitoring risks

Assessing Risk

  • Assessing risk involves evaluating the potential impact and likelihood after risks are identified

Mitigating Risk

  • Mitigating risk seeks to reduce the likelihood of impact of identified risks

Monitoring Risk

  • Monitoring risk involves continuously tracking and reviewing risk factors, so that mitigation strategies are effective and to identify emerging risks

Models and Processes

  • SCOR Model and S&OP processes are key models and processes for supply chain management

Purchasing

  • There are 6 purchasing steps to follow

Total Quality Management

  • Total Quality management is key for managing supply chains

Kraljic Product

  • It is important to understand the Kraljic Product

Just In Time?

  • Just In Time is a method for inventory managment

Characteristics of Agile

  • There are a number of key characteristics of agile to know

Zara Case Study

  • It is important to study the Zara case study

Warehouse Technology

  • Warehouse technology impacts on supply chain

Warehouse Shape

  • There's a difference between I-shaped and U-shaped warehouses

Supplier Evaluation

  • Supplier evaluation is important for supply chain management

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