Analysis of the House of Risk (HOR) Model for Risk Mitigation of the Supply Chain Management Process (Case Study: KPBS Pangalengan Bandung, Indonesia)

Abstract

This study identifies risk management in the supply chain of a dairy company in Bandung, West Java, Indonesia. Using a single case study methodology, semi-structured interviews were conducted with various departments of supply chain agents working for a dairy company. Data were collected regarding the supply chain network of the dairy processing company, managers' knowledge of supply chain risk management, and risks inherent in the dairy supply chain. In general, the company is aware of supply chain risks. By employing the House of Risk (HOR) model combining the two methods of Failure Mode and Effect Analysis (FMEA) and Quality Function Deployment (QFD), the risks identified in the supply chain were assessed and prioritized. Several recommendations have been made to mitigate high priority risks. The study found 15 risk events in the company's supply chain process and 11 risk agents, of which seven were included in the priority risk agent category, which contributed 79.55% to the company's total risk. To deal with the priority risk agents, the company should take seven risk mitigation actions to minimize the adverse impact on the company. This research is the latest in risk mapping and risk mitigation action plans for the dairy industry, especially KPBS Pangalengan, with the proposed mitigations including routine quality control (PA1), re-checking machine settings (PA5), and other matters related to operational activities should be carried out by the operational manager to achieve maximum mitigation results.