Supply Chain Sarbanes Oxley Supply Chain SarBox Supply Chain SOX Supply Chain Corporate Governance Supply Chain Integrity

When we spoke previously about Risk Identification we looked at various characteristics of risk for the purpose of analysis and classification. In Risk Assessment, the focus is identifying the potential risks which will then be analyzed and classified.

The risk assessment is a look at what risks can prevent the organization from reaching its goals. The risk assessment includes looking at competition, current market condition, future market trends, etc.

In terms of assessing risks to the internal & external supply chain, we can look at risky suppliers based on their scorecard results, weather interruptions, and the possibilities of fraud, to name a few. Also we need to look at how the organization might be holding itself back: are there politics to overcome, departmental fiefdoms, poorly trained personnel, a failure to upgrade technologies, inefficient operations? How much of the risks are internal and the organization's own fault?

Are the risks to the organization the result of the tone set by senior management?

The following table highlights various supply chain operations goals which can be jeopardized due to the failure to assess risks accordingly:

IMPROVEMENT GOALS REDUCTION GOALS

New Orders / Recurring Orders Order Entry Time & Errors

Picks Per Hour Picking Time & Errors

Manufacturing Throughput Manufacturing Time & Defects

Receipts Per Hour Receiving Time & Errors

Quality Assurance Throughput Testing Time & Errors

Inventory County Accuracy & Speed Inventory Count Time & Errors

Payables Throughput Receivables Timeframe

The failure of an organization to attain its goals can affect shareholder value and stakeholder (customer, employee, supplier) support.