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Notes For SCR

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207 views3 pages

Notes For SCR

Uploaded by

litee1983
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Supply Chain Risk (SCR)

1. Definition:

 Supply Chain Risk refers to the possibility of disruptions or failures in the supply
chain that can impact a company’s operations, finances, and reputation.

2. Types of Risks:

 Operational Risks: Disruptions due to internal processes, systems, or human errors.


 Financial Risks: Risks related to costs, liquidity, and profitability.
 Strategic Risks: Risks arising from strategic decisions, market changes, and
competitive dynamics.
 External Risks: Environmental, geopolitical, and economic factors impacting the
supply chain.

3. Risk Management Process:

 Identification: Recognize potential risks through audits, data analysis, and scenario
planning.
 Assessment: Evaluate the likelihood and impact of identified risks using qualitative
and quantitative methods.
 Mitigation: Develop strategies to reduce or eliminate risks, including diversifying
suppliers, improving forecasting, and creating contingency plans.
 Monitoring: Continuously track and review risk factors and the effectiveness of
mitigation strategies.

4. Key Strategies for SCR:

 Diversification: Use multiple suppliers and geographic locations to reduce


dependency on a single source.
 Technology and Automation: Implement advanced technologies for real-time
monitoring and data analytics.
 Supplier Relationship Management: Develop strong relationships with suppliers to
ensure reliability and collaboration.
 Inventory Management: Balance inventory levels to manage demand fluctuations
and supply disruptions.

5. Tools and Techniques:

 Risk Mapping and Heat Maps: Visual tools to identify and prioritize risks.
 Failure Mode and Effects Analysis (FMEA): Systematic method to evaluate
potential failure points.
 Key Risk Indicators (KRIs): Metrics to monitor risk exposure.
 Scenario Analysis: Assess potential impacts of different risk scenarios.

Governance, Risk, and Compliance (GARP)

1. Definition:
 Governance, Risk, and Compliance (GARP) is a framework for managing a
company’s overall governance, enterprise risk management, and compliance with
regulations.

2. Components of GARP:

 Governance: The system by which organizations are directed and controlled. It


involves leadership, organizational structures, and processes to ensure accountability,
fairness, and transparency.
 Risk Management: The process of identifying, assessing, and controlling threats to
an organization’s capital and earnings.
 Compliance: Adherence to laws, regulations, guidelines, and specifications relevant
to the business.

3. Importance of GARP:

 Ensures the organization operates within legal and ethical boundaries.


 Protects the organization from risks that could lead to financial loss, reputational
damage, or operational failures.
 Enhances decision-making processes and accountability.
 Builds trust with stakeholders, including customers, investors, and regulators.

4. Key Elements of Governance:

 Board Structure and Responsibilities: Clear roles and responsibilities for board
members.
 Policies and Procedures: Well-defined policies to guide organizational behavior.
 Internal Controls: Mechanisms to ensure integrity and accuracy in financial
reporting and operational processes.
 Stakeholder Engagement: Regular communication and engagement with
stakeholders.

5. Risk Management Framework:

 Risk Appetite and Tolerance: Define the level of risk the organization is willing to
accept.
 Risk Identification and Assessment: Systematically identify and evaluate risks.
 Risk Response: Develop strategies to mitigate, transfer, accept, or avoid risks.
 Risk Monitoring and Reporting: Continuously monitor risk environment and report
to stakeholders.

6. Compliance Management:

 Regulatory Compliance: Ensure adherence to relevant laws and regulations.


 Internal Compliance: Align internal policies and procedures with external
regulations and standards.
 Training and Awareness: Educate employees about compliance requirements and
best practices.
 Audit and Monitoring: Regular audits to ensure compliance and identify areas for
improvement.
7. Tools and Techniques:

 Enterprise Risk Management (ERM) Systems: Integrated systems for managing


risks across the organization.
 Compliance Management Software: Tools to track regulatory changes and ensure
compliance.
 Audit Management Tools: Software to plan, execute, and report on audits.
 Data Analytics: Use of data analytics for risk assessment and compliance monitoring.

By integrating SCR and GARP, organizations can create a robust framework that not only
manages supply chain risks but also ensures comprehensive governance and compliance,
enhancing overall resilience and sustainability.

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