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Supply Chain Risk Management, Second Edition by David L. Olson

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CHAPTER 3

Risk Matrices in Supply Chain Risk Management

In chapter 2 I discussed the role of risk identification in the risk management process. In this chapter I will expand this discussion to include looking at risk matrices as tools to aid in identifying risk.

It is useful for organizations to begin by assessing their risk appetite. No organization can avoid risk. Nor should they insure against every risk. Organizations exist to take on risks in areas where they have developed the capability to cope with that risk. However, they cannot cope with every risk, so top management needs to identify the risks they expect to face and those risks they are willing to assume (and profit from successfully coping).

The risk identification process needs ...

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