- Supply chain risk solutions do not address the most critical disruptions
- Use financial impact to determine the highest risks in your network
- Determine whether your mitigation strategies are addressing the most critical risks.
The key drivers are:
- Supplier and supply chain network
- Costs along the supply chain
- Inventory – including strategic
- Time to Survive and Time to Recover
Opalytics Technology Benefits:
- Guide strategic risk mitigation through the Risk Exposure Index methodology
- Assist in making operational decisions on strategic inventory
- Help define Time to Recover supplier requirements
- Effectively plan for disruptions
Example: Ford Supplier Risk Optimization
Challenge: Identifying financial impact of disruptions
Approach: To address this challenge, we developed a model—a mathematical description of the supply chain that can be computerized—that focuses on the impact of potential failures at points along the supply chain (such as the shuttering of a supplier’s factory or a flood at a distribution center), rather than the cause of the disruption. This type of analysis obviates the need to determine the probability that any specific risk will occur—a valid approach since the mitigation strategies for a disruption are equally effective regardless of what caused it. Using the model, companies can quantify what the financial and operational impact would be if a critical supplier’s facility were out of commission for, say, two weeks—whatever the reason. The computerized model can be updated easily and quickly, which is crucial since supply chains are in a continual state of flux.