Designing a Risk Mitigation Strategy for the Impact of the Global Pandemic on the Cosmetic MSME Supply Chain Using the House of Risk (HOR) Method

At the end of 2019, the rapidly spreading Corona-virus led to a pandemic in various countries. The impact of the global pandemic extended to the industrial world, particularly causing disruptions in the supply chain. Micro, Small, and Medium-sized Enterprises (MSME), as organizations with weak resilience, became the primary targets of the global pandemic pandemics effects. The object of the research is one of the MSMEs in Banda Aceh that experienced various impacts on their supply chain, ranging from challenging forecasting, disrupted logistics processes, to halted production processes. Therefore, risk management planning in company’s supply chain is crucial to ensure that this MSME can continue to survive in the era of the pandemic. Risk management research was conducted using the House of Risk (HOR) method to identify and formulate mitigation strategies against the most accurate risk causes. Based on the results of this identification, several risk events and their causes were identified. The risk evaluation process was carried out by calculating the Aggregate Risk Potential (ARP) value, and from there, the risk causes that require mitigation were identified using a Pareto diagram. The Pareto diagram results showed that there are three risk causes that need to be prioritized for mitigation and preventive measures. As a result, nine preventive measures were identified to ensure the supply chain continues to operate optimally.