House of risk: a model for proactive supply chain risk management

Abstract

Purpose -Increasingly, companies need to be vigilant with the risks that can harm the short-term operations as well as the long-term sustainability of their supply chain (SC). The purpose of this paper is to provide a framework to proactively manage SC risks. The framework will enable the company to select a set of risk agents to be treated and then to prioritize the proactive actions, in order to reduce the aggregate impacts of the risk events induced by those risk agents. Design/methodology/approach -A framework called house of risk (HOR) is developed, which combines the basic ideas of two well-known tools: the house of quality of the quality function deployment and the failure mode and effect analysis. The framework consists of two deployment stages. HOR1 is used to rank each risk agent based on their aggregate risk potentials. HOR2 is intended to prioritize the proactive actions that the company should pursue to maximize the cost-effectiveness of the effort in dealing with the selected risk agents in HOR1. For illustrative purposes, a case study is presented. Findings -The paper shows that the innovative model presented here is simple but useful to use. Research limitations/implications -In the proposed framework, the correlations between risk events are ignored, something that future studies should consider including. Practical implications -The framework is intended to be useful in practice. For the calculation processes, a simple spreadsheet application would be sufficient. However, most of the entries needed in the model are based on subjective judgment and hence cross-functional involvement is needed. Originality/value -The paper adds to the SC management literature, a novel practical approach of managing SC risks, in particular to select a set of proactive actions deemed cost-effective.

Development of quality improvement matrix: An integrated tools for quality improvement

“…This HOR method consists of two matrices. The first matrix is used to determine which risk agents should be prioritized for precautions, while the second matrix is used to design the mitigation strategy for priority risk agents to be addressed [8].…”

“…Research of [1] combines FMEA with SPC while [5] also combines with SIPOC. Research of [8] combines Failure Mode and Effect Analysis (FMEA) and House of Quality (HOQ) but for managing risk in the supply chain. The tool is called House of Risk (HOR).…”

Management of Supply Chain Risk in Cattle Slice Fattening at PT. Catur Mitra Taruma

“…According to Pujawan & Geraldin (2009), most of the causes of supply chain risk are related activities with outsiders. This statement supports the high value of risk frequency in both sources of risk.…”

“…Supply chain risks are all risks from the flow of information, materials, and products or disruptions caused by the complexity of corporate relationships with external parties (Pujawan & Geraldin, 2009). To reduce the disturbance, good supply chain risk management is required.…”

Predict the logistic risk: fuzzy comprehensive measurement method or particle swarm optimization algorithm?

“…Fuzzy comprehensive evaluation is a very effective multivariate decision-making method for making comprehensive assessment affected by many factors [15].…”