1. Why is supply chain mapping an important risk management tool?
2. How could companies reduce risk by becoming a preferred provider?
3. Would having a centralized risk war room be either feasible or beneficial for organizations?
4. How do you separate between LSS Critical to Quality (CTQ) and Critical to Customer (CTC) factors?
5. How do you determine Cost of Quality (CoQ) and Cost of Poor Quality (CoPQ)?
6. If Cost of Poor Quality (CoPQ) decreases, why does Cost of Quality (CoQ) also decrease? Is this a good thing?
7. When including raw material providers in your network design model, why is it important to include certain aspects of the Bill of Materials (BOM)?
Sample Answer
Let's break down each of these questions related to supply chain management, risk, quality, and network design.
1. Why is supply chain mapping an important risk management tool?
Supply chain mapping is an incredibly important risk management tool because it provides visibility and transparency into the entire network, from raw material suppliers to end customers. This visibility is crucial for identifying, assessing, and mitigating potential risks.
Here's why it's so important:
Identifies Single Points of Failure (SPOFs): Mapping helps visualize where the supply chain relies heavily on a single supplier, a single transport lane, or a single manufacturing facility. These SPOFs are highly vulnerable to disruption (e.g., natural disaster, labor strike, geopolitical event) and can halt the entire chain.
Reveals Tier-2/Tier-3 Risks (N-Tier Visibility): Many companies only have clear visibility into their direct (Tier-1) suppliers. Mapping deeper into the supply chain (Tier-2, Tier-3, and beyond) can uncover hidden risks, such as a critical component supplier further up the chain that might be in a volatile region or financially unstable.