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Risk Measurement
Imagine a measurement system that, when working eectively, oers the
opportunity to reduce supply chain risk. Next, imagine the possible out-
comes when such a system fails to work as intended. A number of years ago
a consumer products company with $100 million in annual sales developed a
scorecard system to measure supplier performance. Besides creating a sys-
tem that was not validated and was less than professional in appearance,
many larger suppliers challenged their scores, particularly when the scores
were lower than what they received from their more sophisticated custom-
ers. e measurement system was such a nonsta ...