By combining powerful tools, such as probabilistic methods, digital modeling, discrete-event simulation and risk assessments for every scenario, ports can better understand and manage risks. This approach to risk management has become more widely used due to the falling cost of IT processing and the increasing digitization of supply chains. However, the quality of models applied is highly dependent on the quality of inputted data as well as the model data.
Simulations can be carried out across the entire port operational network to obtain different scenarios. Outcomes typically take the shape of histograms, sensitivity curves with confidence intervals, and probabilities of occurrence, along with risk assessments for each scenario. Each scenario may require several hundred iterations until the outcomes are considered statistically significant.
Outcomes of the scenarios are prioritized based on the probability of occurrence and their associated risk. The final step is to develop a risk response plan (RPP) for the scenarios deemed critical, covering the port's strategic, tactical, or operational horizons.
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