301
Appendix: The Supply Chain
Risk Assessment Tool
As we mentioned in Chapter12, 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 proling a company’s supply chain matu-
rity, which then relates implicitly to the risk associated with that maturity.
e 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 Chapter2. e answers to these questions- of-
discovery provide a rst- of- a-kind glimpse into a company’s supply chain
risk. e spider diagram, featured in Figure A.1, proles color- coded lev-
els of risk that correspond to high, medium, and low risk.
HOW YOU MIGHT UTILIZE THE TOOL
e heat map provides, perhaps for the rst 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.
e tool is an awareness technique to begin the dialogue covering supply
chain risk. is gure 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
302 • Appendix: e Supply Chain Risk Assessment Tool
Risk Gradient
Low Risk 1-to-4
Medium
Risk
5-to-7
High Risk 8-to-10
0
1
2
3
4
5
6
7
8
9
10
Leadership
Balanced Scorecard
S&OP Processes
Information Systems
Integrated Supply Chain
Customer Demand
Industry
Manufacturing
Supply
Logistics
SCRM Risk “Heat Map” Assessment
High risk
Medium risk
Prospect response
Oil & Gas Risk
Seminar
Response
FIGURE A.1
SCRM heat map assessment.
Appendix: e Supply Chain Risk Assessment Tool • 303
scores from an oil and gas company headquartered in Asia. e 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.
e heat map tool is also utilized during supply chain risk assessment
engagements with companies. e 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
nal 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. e ques-
tions are indicative of supply chain best- in- class practices from more than
25years of operational executive experience and 15years 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. e 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 45days aer your
initial download. To access the tool follow the instructions in Figure A.2.
304 • Appendix: e 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 identier) 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 [email protected].
FIGURE A.2
Accessing the heat map tool.
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