Supply Chain Risk Assessment

Supply chain operations are tightly connected to risks and uncertainties. Research shows that SC managers spend 40-60% of their worktime handling disturbances. Uncertainties and risks have to be taken into account during strategic supply chain design and planning, as well as in operational management. This complicates the planning process and sets high standards for the agility and robustness of a supply chain. The risks must be identified in order to design a network, define policies, and know how to act in case of an emergency.

The anyLogistix (ALX) supply chain risk management software tool allows users to build a model of a network and simulate its operations, taking into account uncertainties and stochastics of the real world. This is achieved by the ALX simulation modeling technology and cannot be done with traditional analytical risk management tools. In addition, simulation in ALX allows users to test multiple network or policy change scenarios to increase the supply chain’s resilience and define contingency plans.

ALX is able to handle both operational and disruptive risks.

Operational risks

Simulation modeling in ALX allows the user to include randomness in their supply chain model. By running the model multiple times, with varying parameters, users can see how unstable conditions in the environment can impede supply chain operations. This enables users to assess risks quantitatively, calculating the combination of the event’s probability and associated losses.

Users will be able to estimate all kinds of supply chain operational risks:

  • Demand fluctuations, including those caused by forecasting errors and bullwhip effect
  • Risks associated with delays in transportation, damage or loss of goods, scrap
  • Stock-outs at your own or suppliers’ facilities due to unaligned inventory policies
  • Equipment breakdowns at production
  • Changes in tariffs, taxes, industry or ecological regulations

Disruptive risks

In addition to testing parameter variation, users can assess particular “what-if” scenarios to stress-test the supply chain in emergency situations. Flexibility of ALX allows users to simulate any disruptive event to see how it would affect their company, including:

  • Bankruptcy of suppliers or logistics providers
  • Damage of transportation or production infrastructure due to natural or manmade disasters
  • Economic and political crises

Having quantified the risks, users can design a network that will minimize possible losses and increase supply chain resilience. In addition, ALX allows users to test various mitigation policies to find the balance between redundancies and the lean model.

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