Question

Outline how risk might be dealt with in levels 1, 2 and 3 of Peck's model of the supply chain.

Answer 1

Risk involves possible hazards and points of vulnerability for an organization. The peck's model of the supply chain has four levels but in this paper, I will talk about how to deal with risk in the first three levels. The first level is the process engineering and inventory management. Thelevel deals with cash, information, and workflows. In this level risk can be addressed through checking on how the supply chain looks like, improving the visibility of the organization and controlling the utilization of resources. The level enhances control methods and how the flow of work, cash and information can be improved. In this level, the supply chain performance is the overall goal although it exposes an organization to many risks. However, through the management of the flow of the important things such as cash and information, risks can be minimized.The second level is the assets and infrastructure dependencies. It involves fixed and mobile assets used to facilitate operations in business. The assets may include production sites, warehouses, distribution sites communication and IT facilities. Knowledge of the assets and infrastructures of a company are relevant in risk management. An organization may be able to insure its assets and infrastructures minimizing risks that may occur in the process of operation. In this level, people define risk regarding probability and can control it through insurance. The level enables a company to estimate the loss that it may incur in case of fire, floods and other unplanned for occurrences. In this level supply chain is seen as a carrier of information .

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