The Supply Chain Risk Mitigation Strategy uses the House of Risk (HOR) Method and Analytic Network Process (ANP)

Abstract

CV. Dwipa Nusantara Tobacco is a company engaged in the tobacco processing industry in the form of cigars. Supply chain activities at these companies involve a lot of human intervention so many problems faced by companies result from errors in their workforce or human error. This study aims to prioritize the risk agents risk and determine the best risk mitigation strategy by applying a supply chain risk identification, analysis, and assessment process. The method used to achieve this goal is the SCOR method to help identify risks, House of Risk (HOR) to prioritize the risk agents along with mitigation strategies, and Analytic Network Process (ANP) to choose a mitigation strategy. The implementation of HOR phase I succeeded in identifying 69 risk events and 82 risk agents, then the results of calculations based on the 80:20 pareto principle produced 29 priority risk agents. The ANP method plays a role in determining the best mitigation strategy through pairwise comparisons and supermatrix calculations. Of the 51 mitigation strategies identified, ANP managed to choose the 20 best mitigation strategies. Implementation of HOR phase II by assessing the relationship and difficulty factors (Dk), as well as calculating the value of effectiveness (TEk) and the value of effectiveness to difficulty ratio (ETDk), succeeded in prioritizing risk mitigation strategies based on the highest value to the lowest, the first is checking before and after carrying out work (PA3) with an ETD value of 7066, secondly carrying out routine inspections (PA50) with an ETD value of 5201, thirdly carrying out periodic evaluations (PA44) with an ETD value of 4950, and so on. The application of the HOR and ANP methods succeeded in prioritizing the risk agents for handling through the implementation of effective mitigation strategies based on influence factors, relationships, and level of difficulty.