Supply Chain Cost Management: The AIM & DRIVE® Process for Achieving Extraordinary Results

Evaluate Risks and Benefits from Different Perspectives

Having completed a list of strategy statements, the next step is to conduct a thorough risk-benefit analysis. Notice, the term used is “risk-benefit” and not “cost benefit” analysis. The reason is that there is more than cost involved in a decision. Besides, a strategy to reduce, change, or eliminate something has consequences for the business and, thus, must be viewed from different perspectives. Here are some of the commonly used criteria in a good risk-benefit analysis.

Financial. Of course, it is most likely that the first part of the risk-benefit discussion on a given strategy statement will focus on the monetary aspects. It is important that the team does not become “creative” in ...