Managing Supply Chain Risk (L5M2)

1.2 Assess operational risks in supply chains

• 1.2.1Contract failure
• 1.2.2Financial risks: currency, cash flow and insolvency
• 1.2.3Quality failure
• 1.2.4Security of supply
• 1.2.5Technology
• 1.2.6Logistics complexity
• 1.2.7Risks in outsourcing and offshoring
• 1.2.8ESG (Environmental, Social, and Governance) risks impacting supply chains

1.3 Compare methods for eliminating fraud and corruption in supply chains

• 1.3.1Types of corruption
• 1.3.2Types of fraud
• 1.3.3Governance of fraud and corruption in supply chains
• 1.3.4The use of ethical codes including the CIPS Code of Conduct to support the elimination of risk

1.4 Assess the risks in supply chains that can impact on organisational ESG (Environmental, Social, and Governance) considerations

• 1.4.1Defining ESG (Environmental, Social, and Governance) considerations in the context of sustainable procurement and supply
• 1.4.2How environmental supply chain risks impact organisational ESG (Environmental, Social, and Governance) considerations.
• 1.4.3How social supply chain risks impact organisational ESG (Environmental, Social, and Governance) considerations
• 1.4.4How governance supply chain risks impact organisational ESG (Environmental, Social, and governance) considerations.
• 1.4.5Standards for sustainable procurement: ISO standards, United Nations (UN) and International Labour Organization (ILO), and local sustainability standards

2.1 Examine the use of contractual terms to help manage risk in supply chains

• 2.1.1Purpose and use of model form contracts in managing supply chain risk
• 2.1.2Purpose and development of indemnity and liability clauses in supply chain risk management
• 2.1.3Purpose and use of clauses for testing, inspection, and acceptance
• 2.1.4Impact of force majeure clauses in managing supply chain risk
• 2.1.5Global sourcing considerations and compliance to standards

2.2 Analyse the use of third-parties in risk management in supply chains

• 2.2.1Use of third-party providers for credit rating, debt factoring, and related business services in managing supply chain risk
• 2.2.2Use of third-party providers for auditing risks including ESG risks in supply chains
• 2.2.3Use of third-party providers for disaster recovery services

2.3 Assess the use of insurances for supply chain risks

• 2.3.1Use of insurance in managing supply chain risk
• 2.3.2Legal principles of insurance
• 2.3.3Categories of insurance: employers and public liability, professional indemnity, product liability, and trade credit
• 2.3.4Insurance claims, underwriting, and supply chain risk management

2.4 Examine the use of contingency plans in response to risks in supply chains

• 2.4.1Components of a business continuity plan and disaster recovery plan
• 2.4.2Definitions and purpose of disaster recovery and business continuity planning
• 2.4.3Importance of reviewing and testing contingency plans

3.1 Evaluate the use of probability and impact assessments to manage risks in supply chains

• 3.1.1Methodologies for assessing the probability and impact of risk
• 3.1.2Vulnerability assessments
• 3.1.3Collating statistical evidence of risks
• 3.1.4Use of probability theory and statistical distribution methods to determine the likelihood of risk

3.2 Analyse and propose how risk assessments and risk registers can mitigate risks in a supply chain

• 3.2.1Creation and use of templates for risk assessments and risk registers
• 3.2.2Engaging stakeholders in the development and review of risk assessment and registers
• 3.2.3Importance of reporting and action plans in risk management

3.3 Explain the development of a risk management culture and strategy to improve supply chains

• 3.3.1Developing a strategic approach to risk management
• 3.3.2Role of organisation culture in management of supply chain risk
• 3.3.3Risk management process and the development of risk management plans
• 3.3.4Resource requirements for effective supply chain risk management
• 3.3.5Supply chain risk visibility and reporting to stakeholders