A multinational company specializing in the manufacturing of mineral oil wanted to identify and assess the risk factors impacting the realization of their tactical and strategic goals. To effectively assess the supply chain risks, the mineral oil manufacturer approached SpendEdge to devise a comprehensive approach that would help them analyze risks and gain a better understanding of their outcome. During the course of this engagement, a detailed quantitative analysis of various categories within the supply chain was carried out to help the client identify and benchmark the best practices.
About the Client
A pioneer in producing white mineral oil, the company has multiple manufacturing units spread across the globe.
The mineral oil manufacturer was facing predicaments in analyzing supplier risks and devising an appropriate risk analysis model that considered the impact of key factors across their global supply chain.
How did SpendEdge Help the Client?
Step 1: Identified the risk criteria
Identified and developed a common set of factors to help the client gauge the severity of each risk factors. The risk criteria included factors such as –likelihood, consequence, vulnerability, and speed of onset.
Step 2: Developed a risk assessment matrix
This step involved the assessment of risk factors and the development of an appropriate risk assessment matrix to help the mineral oil manufacturer categorize and prioritize risks based on the probability of their severity and occurrence. This further assisted the client to analyze the risk factors and determine the appropriate strategies to reduce the impact on the supply chain.
Key questions answered in this risk analysis engagement
Benefits of the Engagement
With the help of SpendEdge’s risk analysis engagement, the mineral oil manufacturer allocated more resources to effectively evaluate and manage the ever-changing risk environment. Additionally, the engagement assisted the client to be more meticulous towards the dynamic risk environment by understanding and evaluating the potential threats and supply chain vulnerabilities.
Why incorporate risk analysis?
Today, uncertainties in the global economy have majorly influenced the way businesses function. Moreover, risks are the major cause of uncertainties in any enterprise. As a result, companies are increasingly investing in identifying and managing them even before they disturb their business. Risk analysis also acts as the key to making futuristic business decisions.
Risk analysis significantly improves the overall decision-making process of a business, as decisions will not only be based on the risk mitigation strategies but also on the expected project outcome and the other external and internal risks. Risk analysis also acts as a forerunner to developing a risk management plan that identifies the most efficient approach to risk management.