By Donald Waters
This can be the best descriptive books within the subject, written in an easy, effortless to appreciate language. very good particular SCRM instructions are supplied, because it has been written with the practitioner in brain (although researchers may perhaps locate a few issues constructives.) it may well even be use as a supplement interpreting in enterprise Continuity administration classes.
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Additional info for Supply Chain Risk Management: Vulnerability and Resilience in Logistics
Sample text
Defining risk ឣ 33 The idea of positively managing these risks is new, even though logistics managers have traditionally used standard methods to mitigate the most obvious effects (such as high stocks and spare capacity). More usually, managers tend to ignore risks to the supply chain and make a reactive response when an unforeseen event actually occurs. The problem is that this reactive approach is too slow, and a lot of harm can be done before it begins to have an effect. A better approach to risk management is proactive, analysing likely events before they occur and planning steps to mitigate their effects.
2. Observation. You can use historical data to see how often an event actually happened in the past, and use this information to give an experimental or empirical probability. Probability of an event = number of times that the event occurred number of observations In the last 100 deliveries from a supplier, 32 arrived more than a day late. 32 that deliveries are more than a day late. A weakness of empirical probabilities is that the historical data may not be typical or relevant for the future.
For instance, managers may not know the probabilities of certain events, so they will tend to omit them from analyses – but this omits some events and effectively gives decisions with ignorance. Earthquakes illustrate an interesting type of event, as they are always unexpected – suggesting that they are real risks, but are inherently unforeseeable or unknowable in advance. This suggests decisions with uncertainty, but realistically earthquakes are so rare that it is better to ignore them – and the myriad of similar risks – rather than consider them any further.