Supplier Risk Analysis Engagement: How it Helped a Power Engineering Company to Develop Strategies to Guard the Company Against Supply Chain Risks
Engagement Overview: A multinational power engineering company wanted to effectively assess the supply chain risks. To identify and assess the risk factors impacting the realization of their tactical and strategic goals, the energy industry client approached SpendEdge to devise a comprehensive approach that would help them analyze risks and gain a better understanding of their […]READ MORE >>
A multinational power engineering company wanted to effectively assess the supply chain risks. To identify and assess the risk factors impacting the realization of their tactical and strategic goals, the energy industry client approached SpendEdge to devise a comprehensive approach that would help them analyze risks and gain a better understanding of their outcome. A detailed quantitative analysis of various categories within the supply chain was carried out to identify and benchmark the best practices to be followed.
About the Client:
A leading power engineering company. The client is a leading player in the energy industry, specializing in the delivery of a wide range of integrated power solutions to major players across industries.
The energy industry client was facing challenges in analyzing supplier risks and devising an appropriate risk analysis model that considered the impact of key factors on their global supply chain.
How did SpendEdge Help the Client?
- Step 1: Developed a risk assessment matrix
The initial step in risk analysis involved the assessment of risk factors and the development of an appropriate risk assessment matrix to help the client categorize and prioritize risks based on the probability of their occurrence and the severity of their impact. This assisted the power engineering company to analyze the risk factors and determine if they have appropriate strategies to reduce the impact.
- Step 2: Identified the risk criteria
Identified and developed a common set of factors to help the client evaluate the severity of each of the risk factors. The risk criteria included factors such as – consequence, likelihood, vulnerability, and speed of onset.
- Step 3: Developed a risk analysis model using a three-step approach
The scrupulous three-step approach helped in the constant monitoring of the supplier’s risks, which eventually led to the development of a robust risk analysis model. It also enabled the power engineering company to leverage the technology investments that were aimed at minimizing risks.
Key questions answered in this supplier risk analysis engagement include:
Benefits of the Engagement:
The supplier risk analysis engagement helped the power engineering company client to allocate more resources to effectively assess and manage the ever-changing risk environment. The development of an effective risk analysis model further assisted the company to be more diligent towards the dynamic risk environment by understanding and analyzing the potential threats and supply chain vulnerabilities as they appear.
Why incorporate risk analysis?
The uncertainty in the global economy has majorly influenced the way businesses function these days. Leading organizations that used to operate efficiently with the help of demand forecast and future projections now refrain from making business decisions that are set in stone. Surprisingly, companies have now renewed their focus to- ‘efficient risk management’.
Risks are the major cause of uncertainty in any enterprise. Companies are therefore increasingly investing in identifying and managing them even before they affect the business. Risk analysis acts as the key to making futuristic business decisions. Moreover, our risk analysis experts offer detailed insights that help them deal with the risks facing the company.
Risk analysis acts as a precursor to developing a risk management plan that identifies the most efficient approach to risk management. If your organization is looking to employ an effective risk management model, then risk analysis is the ideal approach to identify alternative and feasible ways to mitigate risks.
Moreover, risk analysis greatly improves the overall decision-making process, 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. In fact, while it is not possible to know the unknown, it is, however, possible to govern the occurrence of unlikely events and plan accordingly.
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