Implementation of Prediction Accuracy Calculation

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Analysis of Supply Chain Resilience Using the House of Risk Method in the Pharmaceutical Industry

Introduction

In today's fast-paced and highly competitive business environment, supply chain resilience has become a crucial aspect of a company's operational sustainability. The pharmaceutical industry, in particular, is heavily reliant on raw materials, making it vulnerable to disruptions in the supply chain. PT. Mutiara Mukti Farma (Mutifa), a leading pharmaceutical company, faces significant challenges in its distribution system, which is largely dependent on imports. This dependency can lead to production disruptions and ultimately result in the company's inability to meet customer demand when problems arise in the supply chain.

The Importance of Supply Chain Resilience

Supply chain resilience refers to a company's ability to withstand and recover from disruptions in the supply chain. In the pharmaceutical industry, supply chain resilience is critical due to the high stakes involved in ensuring the quality and availability of life-saving medications. A resilient supply chain can help companies mitigate the impact of disruptions, maintain operational efficiency, and ultimately improve customer satisfaction.

The House of Risk Method

The House of Risk (HOR) method is a risk management tool used to identify and mitigate risks in supply chain activity. This method involves a two-stage process: risk identification and mitigation proposal. In the first stage, the HOR method helps identify priority risk sources, which are then analyzed to determine the level of risk and potential impact on the supply chain. In the second stage, the method provides mitigation proposals based on the level of effectiveness and ease of application.

Case Study: PT. Mutiara Mukti Farma (Mutifa)

This study aims to measure supply chain resilience in Mutifa using the HOR method. The results showed that there were 29 risk incidents and 25 causes of operational risk in the supply chain activity of PT. Mutifa. In the first stage of the HOR, 11 priority risk sources were identified, which cumulatively contributed 68% of the total aggregate risk (ARP). This indicates that there are several significant risks that require special attention to strengthen the resilience of the supply chain.

Risk Identification and Mitigation Proposal

In the second phase of the HOR, 5 proposed improvements were produced based on the level of effectiveness and ease of application. The proposals include:

Implementation of Prediction Accuracy Calculation: By increasing accuracy in predicting demand, the company can better adjust the production and inventory of raw materials.
Implementation of the Quality Control Process: Applying strict quality standards can help prevent failure in the product and maintain the company's reputation.
Preparation of SOPs related to the Scheduling Process: SOPs that are clear will ensure that the entire team understands the procedures that must be followed to minimize errors.
Implementation of Real-Time Monitoring System: A real-time monitoring system can help the company track and respond to disruptions in the supply chain more effectively.
Development of Contingency Planning: A contingency plan can help the company prepare for and respond to potential disruptions in the supply chain.

Mapping the Resilience Zone

The resilience zone map shows seven main risk factors that need to be handled. By making an effective mitigation proposal, PT. Mutifa can increase the company's resilience in dealing with various disturbances that may occur.

Conclusion

In conclusion, this study highlights the importance of supply chain resilience in the pharmaceutical industry. The HOR method provides a useful framework for identifying and mitigating risks in supply chain activity. By applying the HOR method, PT. Mutifa can reduce the impact of disruptions, increase operational efficiency, and ultimately improve customer satisfaction. The findings of this study can serve as a valuable reference for other companies in the pharmaceutical industry seeking to improve their supply chain resilience.

Recommendations

Based on the findings of this study, the following recommendations are made:

Implement the HOR method: Companies in the pharmaceutical industry should implement the HOR method to identify and mitigate risks in their supply chain activity.
Develop contingency planning: Companies should develop contingency plans to prepare for and respond to potential disruptions in the supply chain.
Implement real-time monitoring system: Companies should implement real-time monitoring systems to track and respond to disruptions in the supply chain more effectively.
Develop SOPs related to scheduling process: Companies should develop SOPs related to the scheduling process to ensure that the entire team understands the procedures that must be followed to minimize errors.
Implement quality control process: Companies should implement quality control processes to prevent failure in the product and maintain their reputation.

Limitations of the Study

This study has several limitations, including:

Case study approach: The study is based on a case study approach, which may limit the generalizability of the findings.
Limited scope: The study focuses on PT. Mutifa, which may not be representative of other companies in the pharmaceutical industry.
Data collection: The study relies on secondary data, which may be subject to limitations and biases.

Future Research Directions

Future research should focus on:

Developing a more comprehensive risk management framework: Future research should aim to develop a more comprehensive risk management framework that takes into account the complexities of supply chain activity.
Investigating the impact of supply chain disruptions on customer satisfaction: Future research should investigate the impact of supply chain disruptions on customer satisfaction and explore ways to mitigate this impact.
Developing a more effective mitigation strategy: Future research should aim to develop a more effective mitigation strategy that can be applied in various contexts.
Frequently Asked Questions (FAQs) on Supply Chain Resilience Using the House of Risk Method

Q: What is supply chain resilience?

A: Supply chain resilience refers to a company's ability to withstand and recover from disruptions in the supply chain. It involves identifying and mitigating risks, as well as developing strategies to respond to and recover from disruptions.

Q: Why is supply chain resilience important in the pharmaceutical industry?

A: The pharmaceutical industry is heavily reliant on raw materials, making it vulnerable to disruptions in the supply chain. Supply chain resilience is critical in this industry to ensure the quality and availability of life-saving medications.

Q: What is the House of Risk (HOR) method?

A: The HOR method is a risk management tool used to identify and mitigate risks in supply chain activity. It involves a two-stage process: risk identification and mitigation proposal.

Q: How does the HOR method work?

A: The HOR method works by identifying priority risk sources, which are then analyzed to determine the level of risk and potential impact on the supply chain. In the second stage, the method provides mitigation proposals based on the level of effectiveness and ease of application.

Q: What are the benefits of using the HOR method?

A: The benefits of using the HOR method include:

Identifying and mitigating risks in supply chain activity
Developing strategies to respond to and recover from disruptions
Improving operational efficiency and customer satisfaction
Reducing the impact of disruptions on the supply chain

Q: What are some common risks in the pharmaceutical supply chain?

A: Some common risks in the pharmaceutical supply chain include:

Raw material shortages
Quality control issues
Transportation disruptions
Inventory management errors
Cybersecurity threats

Q: How can companies improve their supply chain resilience?

A: Companies can improve their supply chain resilience by:

Implementing the HOR method
Developing contingency plans
Implementing real-time monitoring systems
Developing SOPs related to the scheduling process
Implementing quality control processes

Q: What are some best practices for supply chain resilience?

A: Some best practices for supply chain resilience include:

Conducting regular risk assessments
Developing a comprehensive risk management strategy
Implementing a real-time monitoring system
Developing contingency plans
Providing training and education to employees on supply chain resilience

Q: How can companies measure the effectiveness of their supply chain resilience efforts?

A: Companies can measure the effectiveness of their supply chain resilience efforts by:

Tracking key performance indicators (KPIs) such as on-time delivery rates and inventory turnover
Conducting regular risk assessments and audits
Monitoring customer satisfaction and feedback
Analyzing data on supply chain disruptions and their impact on the business

Q: What are some common challenges in implementing supply chain resilience?

A: Some common challenges in implementing supply chain resilience include:

Limited resources and budget
Complexity of supply chain operations
Difficulty in identifying and mitigating risks
Limited visibility and control over the supply chain
Resistance to change from employees and stakeholders

Q: How can companies overcome these challenges?

A: Companies can overcome these challenges by:

Prioritizing supply chain resilience efforts and allocating sufficient resources and budget
Developing a comprehensive risk management strategy and implementing a real-time monitoring system
Providing training and education to employees on supply chain resilience
Encouraging a culture of supply chain resilience and continuous improvement
Collaborating with suppliers and partners to improve supply chain resilience.