Pros And Consequences Of Bow-Tie Risk Analysis

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Thisticated fashion. These methods help in fully understanding the nature of the risk. Figure 5 below shows the bow-tie risk analysis method which takes a form of a cause and consequence analysis. The causes and the consequences which are two dimensions of a risk event are analysed and treatment actions are tied against each dimension. (Supply Chain Risk Management Council, 2011) Figure 5: Bow-tie Risk Analysis Method (Source: Supply Chain Management Council, 2011)

According to Gray and Larson (2006) a risk management process commences with identification of risk as shown in Figure 6 below. Shaw, Saayman, M. & Saayman, A. (2012) stress that in order to manage a risk, it must first be identified, before any type of risk management programme can be put into action. After risk identification risk assessment follows, which is followed by a risk response development stage which entails developing a strategy to deal with the situation. The final process is strategy implementation, which is executed in line with change management good practices. This part of the process should be considered as the most important function of the risk management programme and thus should be treated in a structured, systematic and well-managed fashion. Figure 6: Risk Management Process
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(Manuj, Esper & Stank, 2014:241). Research has revealed that companies have a tendency to concentrate on increasing efficiency and decreasing costs, whilst also in the process of inventing new products, which may lead to uncertainties and accidents in the supply chains. The existence of uncertainty in the supply chain is one of the leading elements of risk. In a case where there is uncertainty that is accompanied by complexity in the supply chain, chaos is likely to manifest. The factors that can be attributed to chaos are as

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