Open AccessRisk mitigation in raw material distribution activities using house of risk method in manufacturing
Author(s) -
G P Liansari,
M S Rajiman,
Arif Imran,
Fadillah Ramadhan
Publication year - 2020
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/830/3/032086
Subject(s) - supply chain , business , risk management , procurement , production (economics) , operational risk , supply chain risk management , risk analysis (engineering) , risk assessment , operations management , revenue , supply chain management , finance , computer science , marketing , engineering , service management , computer security , economics , macroeconomics
Supply Chain is a sequence of production processes, include raw material supply activities (inbound logistics), production processes, and distribution activities (outbound logistics). Every supply chain activity has risk. A risk mitigation strategy is important because the company will be able to identify the right strategy to handle those risks. Companies must be able to predict all risks that occur in supply chain activities, both of inbound logistics and outbound logistics. A manufacturing company in Indonesia that produces military and heavy equipment doesn’t have a risk mitigation strategy in raw material distribution activity, so this research proposes risk mitigation strategies using House of Risk method with Supply Chain Operation Reference (SCOR) models. Identification of supply chain activities involving of company’s plan, source, make, deliver, and return. House of Risk has two phases, first used to identify risk event, risk agent, and determine severity and occurrence value and calculating the Aggregate Risk Potential (ARP), second used for risk mitigation. Research results found there are 35 risk events, 51 risk agents, and three mitigation strategies that can be implemented in the company. Mitigation strategies, include: calculating the recording of revenue records for errors in the estimation of production capacity risk, procurement is not according to plan risk, and many damaged materials risk; improving the number of operators for errors in estimated production capacity risk; and Collaborative Planning, Forecasting, and Replenishment (CPFR) for error in MRP simulations risk.