Better decision making through a good understanding of risks and their likely

impact:

 Fewer surprises
 Effective use of resources
 Reassuring stakeholders

Risk management steps:

 Plan Risk management

 Identify risks
 Analyse risks
 Plan risk response
 Monitor and control risks

Plan Risk Management:

Risk management plan specifies the management intend systems and procedures
requires for managing risks. Risk management will provide various definitions of
risk, roles and responsibilities, tools and templates.

Identifying risks:

Identifying risks is the first the management key step. This is the process of
identifying potentials of risk.

 Risk identification is the systematic and methodical process

 It is best done in a group environment
 Wide number of people shall be participating in the process including
Management, employees, customer, and other stakeholders

Tools used in identifying risks:

 Brainstorming is the most common approach

 Other tools include:
1. Ishikawa diagram (Cause and effect)
2. Flow diagram
3. SWOT diagram

Risk register:

 Output of identify risks process is a risk register

 This lists down all the risks identified
 In the next process these risks are prioritised and action plan is created to
address these risks

Analyse risk:

 Risks are analysed to prioritise

 Sets focus on high priority risks
As a first step to managing supply chain risk, we focus on ways to identify and
categorize risks. First, causes of risk from effects, drivers and from consequences.
We shall be discussing “Butterfly” model that conceptually separates underlying
causes, actual events and consequences.