House of Risk Approach for Assessing Supply Chain Risk Management of Material Procurement in Construction Industry

Abstract

The purpose of this study is to identify the potential risk events in material procurement supply chain and to arrange risk agents priority using House of Risk (HOR) approach where priority can be the basis to create mitigation strategies. The approach started with HOR Phase 1 by mapping supply chain activities using Supply Chain Operation Reference (SCOR) model and risk assessment. There are 30 risk events in supply chain are adapted from several previous studies, but after the preliminary studies by deep interview with the Manager and the Purchasing Supervisor of Accounting Division obtained 23 valid risk events with 17 risk agents. Using the Aggregate Risk Potential (ARP) values and Pareto 80:20 principle, obtained 3 selected risk agents needs immediate handling with mitigation strategies. HOR Phase 2 with the mitigation strategies arrangement will be performed in the further study.