Tools for ranking and quantifying supply chain risks

Abstract

In the actual dynamic environment managing risks appears fundamentals to ensure a stable continuity for the business life of an organization. Controlling risks level is even more important when it may disturb the ongoing path of a company’s supply chain. Indeed, not being the supply chains of firms stand-alone entities but actually, strictly integrated between them, a breakdown in the supply chain of a firm could have implication over the supply chain of another. If from on hand may appear impossible managing risks affecting our supply chain directly and indirectly, all risks can be minimized to a manageable level by adopting the proper mitigation strategy. This mitigation strategy is defined by a more general concept, the Supply chain Risk Management (ScRM) that, taking the basis of the ISO 31000 and the fundamentals of the Supply Chain Management, supports companies to prevent risks that could cause supply chain disruptions. Particularly during the Risk Identification and Evaluation stages, the subjectivity is one of the first causes that make risks difficult to handle. The AHP technique is aimed at assisting the decision-maker to quantify risks and ranking them in terms of their impact over the supply chain reducing the degree of subjectiveness typical of other models. For illustrating the suggested methodology a real case is illustrated.