How do planners build risk assessment into our S&OP processes? Some tools might include a risk register, SWOT analysis, probability and impact matrix, a tornado diagram, modeling and simulation, probabilistic analysis, or expert judgement. Here are results from the survey we took in January 2023.
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Risk Planning for 2023
The sun just set on another year, a new year is dawning, and there are clouds on the horizon. Will these clouds turn into a storm? If so, how bad will it be?
Demand planners are used to forecast volatility, but there are also many elements of external risk that could significantly impact our businesses. Will the market continue toward a larger downturn? Will Covid surge again, or some other disease? Are the recent attacks on utilities in the Carolinas and in the Pacific Northwest the beginning of some larger threat to our infrastructure? What major cyber-attacks might we see in 2023? How will the price of oil and natural gas be impacted by the ongoing war in Ukraine?
We live in a world full of risk. If the COVID-19 pandemic taught us anything it should be that we cannot take current stability for granted.
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What If We Forgot to Ask What If?
With Easter being last weekend, I thought of an old story about what happened after Jesus returned to Heaven. Some angels asked about the plan to continue his work on earth. What would happen if the few disciples he had trained failed to continue his work? Jesus said, “I have no plan B.”
I heard this story used to teach Christians the importance of evangelism. I’d like to apply it differently. My point today is if you are the all-knowing, almighty God, then you don’t need a plan B. The rest of us need to plan for uncertainty. We need Plan B, Plan C, Plan D, etc.
My wife says when you are watching a scary movie, to be alert when things seem resolved and there is nice music, because something bad is about to happen. Isn’t that kind of like how supply chain is?
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