Uncertainty can be categorized in continuous risk, more slowly changing patterns, and disruptions, which describe abrupt changes in a system.
Tomlin (2006) investigates the question which supply chain strategies perform best when dealing with the later.

Mitigation vs. Contingency Planning
From case studies analyzed in literature the author first deducts disruption management strategies used in practices. The summary can be seen in figure 1.
Disruption Management Strategies
Figure 1: Strategies for Managing Disruptions (Tomlin, 2006)

Mitigation strategies are distinguished from contingency strategies by the time when an action is performed. Often most of the cost occur at the same time.

Mitigation Strategies, are planned and executed before the risk occurs (eg. increasing inventory levels).

Contingency Strategies, are planned beforehand but executed after the risk occurs (eg. power generator after a power failure).
Continue reading "Mitigation or Contingency Strategies against Disruptions"

Originally posted by daniel.stengel@scrmblog.com (Daniel Stengel) at http://scrmblog.com/archives/216-Mitigation-or-Contingency-Strategies-against-Disruptions.html