The Risk Score Management submenu is a comprehensive tool designed to help users effectively evaluate and manage potential risks associated with suppliers. This submenu allows users to create and define risk impacts, such as “Catastrophic,” “Marginal,” and others, to categorize the severity of potential risks. Additionally, users can define the probability of risk occurrences with categories like “Extremely Low,” “Low,” “Medium,” and “High.” Using a risk score matrix, users can assign specific scores to each combination of impact and probability, enabling a detailed assessment of risk levels.
Moreover, the submenu includes functionality to define conditions that automatically blacklist suppliers based on risk impact, probability, and/or the overall risk score. This ensures that high-risk suppliers are identified and managed proactively, enhancing the organization’s ability to maintain a reliable and secure supply chain. By providing a structured approach to risk management, this tool helps organizations mitigate potential risks and make informed decisions regarding supplier relationships.
Risk Impact: Risk impact refers to the potential severity of consequences resulting from a risk event. It categorizes the level of harm or disruption that could occur, ranging from minor (Marginal) to severe (Catastrophic). Understanding risk impact helps prioritize risks and determine appropriate mitigation strategies.
Click on the + icon to add new risk impacts. You can also deactivate an existing impact if it is no longer required using the deactivate button against the defined impact.
Risk Probability: Risk probability refers to the likelihood of a risk event occurring. It assesses the chances of an event happening, categorized as “Extremely Low,” “Low,” “Medium,” “High”, etc. Understanding risk probability helps prioritize risks and allocate resources effectively for mitigation.
Click on the + icon to add new risk probabilities. You can also deactivate an existing probability if it is no longer required using the deactivate button against the defined probability.
Risk Score Matrix: A risk score table is a matrix used to evaluate and quantify the level of risk by combining the impact and probability of a risk event. The table lists potential risk impacts and assigns numerical scores based on different probabilities of occurrence. Here’s how it works:
- Impact: This column categorizes the severity of potential risks, such as “Catastrophic,” “Critical,” and “Marginal.”
- Probability: This row categorizes the likelihood of risks occurring, ranging from “Extremely Low” to “High,” etc.
Each cell within the table contains a risk score that represents the combined assessment of impact and probability. For example, a “Catastrophic” impact with a “High” probability might score 100, indicating a very high risk, whereas a “Marginal” impact with an “Extremely Low” probability might score 3, indicating a low risk.
You can click on the edit option to change the score for any probability and score.
The Risk Score Management submenu allows you to define specific conditions that will automatically blacklist suppliers based on risk impact, probability, and overall risk score. Follow these steps to create and manage these conditions effectively:
Step-by-Step Instructions:
- Define a New Condition:
- Click the “Edit” button to start creating a new blacklist condition.
- Select Attributes:
- When typing the condition, use the @ symbol to invoke attribute selection.
- The following attributes will appear:
@Risk Impact@Probability@Risk Score
- Click on the desired attribute to include it in your condition.
- Set Conditional Operators:
- After selecting an attribute, choose a conditional operator such as
=, >, <, >=, or <=.
- Example:
@Risk Impact =
- Choose Attribute Values:
- Use the
# symbol to invoke the value selection for the chosen attribute.
- Values for
@Risk Impact may include #Catastrophic, #Critical, #Marginal, etc.
- Values for
@Probability may include #Extremely Low, #Low, #Medium, #High.
- Example:
@Risk Impact = #Catastrophic
- Combine Conditions:
- Use logical operators
AND and OR to combine multiple conditions.
- Enclose combined conditions in parentheses
() where necessary to ensure proper logic grouping.
- Example:
(@Risk Impact = #Catastrophic AND @Probability = #High) OR @Risk Score > 90
- Finalize and Save the Condition:
- Review the condition to ensure accuracy and logical coherence by clicking on the Validate button.
- Click “Save and Close” to apply the condition. The system will now automatically blacklist suppliers who meet the defined criteria.
Example Condition:
Here is an example condition that blacklists a supplier if the risk impact is “Catastrophic” and the probability is “High,” or if the overall risk score is greater than 90:
(@Risk Impact = #Catastrophic AND
@Probability = #High) OR
@Risk Score > 90
If there is any mistake in the syntax during validation, you will get a clear error message like the one shown below:
Then you can make changes to the condition and validate again to validate and then save and close.
