Differentiating disturbances and disruptions in supply chain

When we talk about risk management in supply chains there are two typical parameters used in risk evaluation. They are severity of impact and the probability of occurrence (refer figure). This method of looking at risk has its roots in FMEA, where severity of the impact, frequency of occurrence and ability to detect are used as methods to assess risks.

It is interesting to differentiate between disturbances and disruptions. This helps to choose what type of strategies needs to be considered for different types of risks. Disturbances are high probability and low impact kind of events that needs to be constantly looked after. An example for this is the operational disturbances that companies need to handle constantly in supply chains. Disruptions are events that have low probability o occurrence but they have a high degree of impact in the supply chain. An example of this could be related to how the supply chains were affected during 9/11 attacks, Tsunami etc.., where these events do not occur on a daily basis, but when they occur there is a big impact on the supply chains.