Finding the potential for disruptions to business operations - ideally before the disruptions happen -can help businesses reduce their negative impact. Disruptions that are different have various degrees of impact, which influences how businesses prioritize risk management attempts, and different disruptions occur with different frequencies or chances. Author Yossi Sheffi notes that many risk management specialists categorize potential disruptions by two measurements: likelihood of occurrence and magnitude of impact. However, he writes, there's an important third dimension: the discovery lead time.
This is the amount of warning time during which a business can prepare for the disruption and mitigate its effects. As the author explains, some disruptions involve long-term tendencies which are widely discussed in the media (for instance, aging people in the Western world, China, and Japan) or are prescheduled occasions (including new regulations or labor union contract deadlines; some (for instance, hurricanes) happen after a short warning of a few days; while others including fires, earthquakes, or power outages happen without warning. Still other disruptions (for example merchandise contaminations or design defects) may not be detected until well after they've occurred or may never be recognized (as an example, industrial espionage or cyber-attacks).
"Detection means vigilance on both unique near-term events and prospective future events that may interrupt the company," the writer writes. "It depends on creating visibility into the supply chain and realizing how the international moving parts connect to each other and impact each other." He adds: "At its heart, discovery is the conversion of the applicable unknowns into striking known in a timely manner."
Preparing for Disruptions Through Early Detection Case Study Solution
PUBLICATION DATE: October 01, 2015 PRODUCT #: SMR539-PDF-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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