Please answer the following questions after reviewing the reading and lessons for Week 6.



1. What are the sources of risks faced by the global supply chain?

Natural disasters, geopolitical risks, epidemics, or terrorist attacks can shut down production lines because of lack of parts inventory (pg. 316). At the other spectrum in Figure 10-1, we find sources of risks such as supplier performance, forecast accuracy, and operational problems. These are risks that can be quantified and hence we refer to those as the known-unknown.

2. How can companies mitigate these risks?



We discuss in this section the following methods for managing supply chain risks and in particular strategies for managing the unknown-unknown (pg.317).

• Invest in redundancy.


• Increase velocity in sensing and responding.

• Create an adaptive supply chain community.

Reference

Simchi-Levi, David, Kaminsky, Philip, Simchi-Levi, Edith, (2008). Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies, 3rd Edition. New York, NY: McGraw Hill

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