A CASE STUDY OF

GLOBAL SUPPLY
CHAIN RISK
MANAGEMENT

PRESENTED BY:
• ASRA CHAND 20201-28497
• MOMAL NAKEER 20201-28225
• SONIA RABEL 20201-28606
• SYED SHOZAB RAZA 20201-28389
TODAYS
PRESENTATION
DISCUSSION POINTS:
 Introduction
 Identification of Risks in Supply
Chains
 Case Study – Modeling of
Supply Chain Risk Management
 Results and Strategies
 Conclusion
WHAT IS RISK MANAGEMENT?

• Risk is an uncertain event

that may have a positive or
negative impact on the
business
• Risk management is the
process of identifying and
mitigating risks
 ALWAYS REMEMBER!
M-E-A-T

MITIGATE ELIMINATE ACCEPT TRANSFER

 Four Categories of Risk

• S U P P LY R I S K
The possibility of loss occurring from unavailability of
the necessary raw material from the suppliers

• O P E R AT I O N A L R I S K
Possibility of loss resulting from inadequate or failed
internal processes, people and systems, or from
external events
DEMAND RISK
Possibility of loss associated with outbound flows that may
affect the likelihood of customers placing orders, or
variance in the volume and assortment desired by the
customer

FINANCIAL RISK
Possibility of loss with the flow of money which includes
risks to payments, price, economy condition, cash flow,
investments, etc.
I D E N T I F I C AT I O N O F R I S K S
I N S U P P LY C H A I N S

Based on Figure, the Most of these risks

source of supply
are overlapping
chain risks are
classified into supply and do not exist in
risks, operations isolation.
risks, demand risks
and financial risks
IDENTIFICATION OF RISKS IN
SUPPLY CHAINS
A risk is defined as:
Risk=P(event)*L(consequence)
where:
• P(event) is the likelihood of the event occurring
• L(…) is the loss resulting from the event
occurring.
MODELLING OF A
SUPPLY CHAIN RISK
MANAGEMENT

• The model is based on a Logo

company- FanLogo Inc.
• Two manufacturers based in China
and Mexico.
• Business greatly based on:
 Football Season.
Participating Teams.
• Model is based on 5- Stage
Process.
MODEL CASE STUDY
RESULTS & STRATEGIES

HIGH OPERATIONAL RISK HIGH HIGH HIGH

SUPPLY DEMAND FINANCIAL
RISK RISK RISK
RESULTS & STRATEGIES
Continued…

 Used to mitigate supply

HEDGI risk
NG  Protect one’s capital
STRATE against financial risks
 Greatly decreases the risk
GY and increases the profit
  Speculation is to take large risks,
especially with respect to trying to
SPECULATIO predict future in the hope of making
quick large gains
N STRATEGY
 In supply chain context, speculation is
to make decisions based on
anticipated customer demands with a
high frequency and to earn profit.

 There is possibility of loss.

DISRUPTION RISK

 Disruption can manifest

themselves in a variety
of forms including
transportation delays,
port closures, accidents,
natural disasters, quality
problems.
C ONC LUSION
 In this presentation, we explore a
quantitative risk evaluation and mitigation
model in global supply chains.

 We identified four risks including supply

risk, operational risk, demand risk and
financial risk and modeled as probabilistic
distributions of the outcome.

 Our model justify that the mitigation

strategies are applicable to these risks and
can gain more profits compared with non-
strategy-used scenarios