301
Appendix: The Supply Chain Risk Assessment Tool
As.we.mentioned.in.Chapter 12,.as.the.concept.of.supply.chain.risk.man-agement.began.to.solidify.into.a.body.of.knowledge.and.then.courseware,.within. the. framework. of. an. enterprise-.wide. risk. management. approach.(ERM),.several.major.tenets.developed.into.a.set.of.questions-.of-.discovery.regarding.the.maturity.of.the.supply.chain..As.these.supply.chain.tenets.began.to.solidify,.a.mechanism.to.review,.evaluate,.and.position.a.compa-ny’s.maturity.in.supply.chain.excellence.and.design.took.shape.in.terms.of.a.“spider.diagram”.or.heat.map.profiling.a.company’s.supply.chain.matu-rity,.which.then.relates.implicitly.to.the.risk.associated.with.that.maturity..The.heat.map.is.a.set.of.about.100.questions-.of-.discovery.across.10.tenets.of. an. end-.to-.end. supply. chain. environment. A. graphical. illustration. of.the. heat. map. appeared. in. Chapter 2.. The. answers. to. these. questions-.of-.discovery.provide.a.first-.of-.a-kind.glimpse.into.a.company’s.supply.chain.risk..The.spider.diagram,.featured.in.Figure.A.1,.profiles.color-.coded.lev-els.of.risk.that.correspond.to.high,.medium,.and.low.risk.
hOW yOu Might utilize the tOOl
The.heat.map.provides,.perhaps.for.the.first.time,.a.glimpse.into.a.com-pany’s.risk.within.their.entire.supply.chain..As.shown.in.Figure.A.1,.the.tenets. are. leader.ship,. balance. scorecards,. sales. and. operations. planning.(S&OP). processes,. IT. systems,. supply. chain. techniques,. demand. man-agement,. industry. practices,. manufacturing,. supply. base,. and. logistics..The.tool.is.an.awareness.technique.to.begin.the.dialogue.covering.supply.chain. risk.. This. figure. has. an. outer. ring. (a. red. ring. when. using. color-.coded.systems),.which.means.any.answer.outside.the.red.ring.equates.to.a. very. high. risk.. Any. answer. between. the. red. ring. and. the. yellow. ring.(again,.in.color-.coded.systems).equates.to.a.moderate.risk..And.any.result.inside. the. yellow. ring. implies. a. lower. risk.. We. placed. an. actual. set. of.
Schlegel, G. L., & Trent, R. J. (2014). Supply chain risk management : An emerging discipline. Taylor & Francis Group.Created from apus on 2022-04-18 22:08:10.
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302 • Appendix: The Supply Chain Risk Assessment Tool
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Schlegel, G. L., & Trent, R. J. (2014). Supply chain risk management : An emerging discipline. Taylor & Francis Group.Created from apus on 2022-04-18 22:08:10.
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Appendix: The Supply Chain Risk Assessment Tool • 303
scores. from. an. oil. and. gas. company. headquartered. in. Asia.. The. reason.the.tool.resonates.is.that.many.companies.still.have.a.tremendous.amount.of. suboptimization. within. organizational. silos. and. a. lack. of. supply.chain.visibility.
The.heat.map.tool.is.also.utilized.during.supply.chain.risk.assessment.engagements. with. companies.. The. tool. is. used. at. the. beginning. of. an.engagement. to. establish. an. agreed-.upon. enterprise. picture. of. the. com-pany’s. supply. chain. and. risks. through. questions-.of-.discovery. answered.by. leaders. from. various. disciplines.. Next,. a. detailed. risk. assessment. for.each.node.within.the.supply.chain.is.exercised.with.the.culmination.of.a.final.review.of.the.supply.chain.risks.using.the.heat.map.tool.
Walking thROugh the QueStiOnS- Of- diSCOVeRy
As. mentioned,. there. are. about. 100. questions. inside. the. tool.. The. ques-tions.are.indicative.of.supply.chain.best-.in-.class.practices.from.more.than.25 years.of.operational.executive.experience.and.15 years.of.executive.sup-ply.chain.consulting.around.the.globe..Our.basic.premise,.reinforced.by.many.research.organizations.and.top-.tier.consulting.companies,.is.that.as.the.supply.chain.becomes.more.mature,.risk.to.the.organization.is.dimin-ished..Remember,.risk.is.not.eliminated,.but.rather.reduced.
As.you.answer.the.questions,.the.tool.will.calculate.a.rating.within.the.spider.diagram.at.the.bottom.right.end.tab.of.the.spreadsheet..When.com-pleted,.the.user.will.have.a.full-.picture.image.of.inherent.risks.throughout.an. entire. supply. chain.. The. risk. spider. diagram. can. be. used. to. begin. or.continue.the.supply.chain.risk.dialogue.
hOW tO aCCeSS the tOOl
As.a.book.owner.and.professional.interested.in.SCRM,.you.will.have.access.to.the.supply.chain.risk.assessment.tool,.at.no.cost,.for.45 days.after.your.initial.download..To.access.the.tool.follow.the.instructions.in.Figure.A.2.
Schlegel, G. L., & Trent, R. J. (2014). Supply chain risk management : An emerging discipline. Taylor & Francis Group.Created from apus on 2022-04-18 22:08:10.
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304 • Appendix: The Supply Chain Risk Assessment Tool
1. Participants a. Download using this URL
http://www.mysnapps.com/survey/SCMRiskAssessmentWS.xlsx b. Password to open �le: go_journey c. Enter your company name (or any other identi�er) in the box labeled “enter
Company Name.” It will appear on each Rating tab and in the legend of the Heat Map.
d. Enter your Valuation Ratings in the “Participant Rating” column of each Rating tab. Your results will appear automatically on the Heat Map.
e. You can print your Heat Map and/or your ratings using the Print menu. f. To create a pdf with all of your ratings and your Heat Map, use the “Save as
Adobe pdf” option. You must convert the entire workbook (ignore the warnings about bookmarks, links and protected sheets by clicking “Yes” or “OK” in each case).
g. Questions should be directed to Greg Schlegel at schlegel01@earthlink.net.
figuRe a.2Accessing.the.heat.map.tool.
Schlegel, G. L., & Trent, R. J. (2014). Supply chain risk management : An emerging discipline. Taylor & Francis Group.Created from apus on 2022-04-18 22:08:10.
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ight ©
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