Supply Chain Continuity & Third-Party Risk Management Flashcards

What is the primary purpose of conducting a Business Impact Analysis (BIA) for the supply chain?

Answer: To quantify the impact of supplier disruptions on business operations

A supply chain BIA quantifies the operational and financial impact of supplier disruptions, enabling organizations to prioritize critical supplier relationships and allocate recovery resources.

Which term describes the maximum acceptable time a business can function without a critical supplier before suffering irreversible harm?

Answer: Maximum Tolerable Period of Disruption (MTPD)

MTPD defines the maximum time a business can operate without a critical supplier before experiencing consequences that cannot be overcome, setting the planning horizon for supplier continuity strategies.

What does 'dual sourcing' mean in supply chain continuity planning?

Answer: Qualifying two or more suppliers for the same critical component or service

Dual sourcing involves qualifying multiple suppliers for critical inputs, ensuring business operations can continue if one supplier experiences a disruption by switching to the pre-qualified alternative.

Which ISO standard specifically addresses supply chain security and resilience management systems?

Answer: ISO 28000

ISO 28000 specifies requirements for a security management system for the supply chain, providing a framework to manage supply chain security and resilience risks comprehensively.

In supply chain BCM, what defines a 'Tier 1 supplier'?

Answer: A supplier that directly provides goods or services to your organization

Tier 1 suppliers are those with a direct contractual relationship with your organization, providing goods or services directly rather than through intermediaries, making them the first layer of supply chain risk.

What document should a critical supplier provide to demonstrate their BCM capability to your organization?

Answer: Business Continuity Plan or Business Continuity Statement

A supplier's Business Continuity Plan or Business Continuity Statement demonstrates their documented capability to maintain operations and service delivery during a disruption, providing assurance to dependent organizations.

Which inventory strategy maintains buffer stock specifically to absorb supply chain disruption impacts?

Answer: Safety stock or strategic inventory

Safety stock (strategic inventory) provides a resilience buffer against supply chain disruptions by maintaining excess inventory of critical materials, allowing continued operations while alternative sourcing is secured.