La gestión de la cadena de suministro en un entorno económico cambiante

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"Ciclo: Gestionar la crisis: estrategias empresariales para enfrentarse a la crisis económica", en colaboración con IE Business School
Vinod Singhal
Georgia Institute of Technology. Atlanta. EE.UU.
Madrid, 26 de mayo de 2010

Published in: Business, Economy & Finance
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La gestión de la cadena de suministro en un entorno económico cambiante

  1. 1. Global Supply Chain Management In a Changing World Economic Environment Vinod R. Singhal College of Management Georgia Institute of Technology Atlanta, GA, 30332 E-mail: [email_address] Instituto de Empresa - IE Business School Madrid, Spain
  2. 2. <ul><li>Globalization </li></ul><ul><li>Increased leveraged </li></ul><ul><li>Dispersion of risk </li></ul><ul><li>Focus on efficiency </li></ul><ul><li>High degree of interdependency </li></ul><ul><li>High degree of uncertainty </li></ul>Trends in supply chain management
  3. 3. <ul><li>The effective management of risk is one of the core competencies that has made Lehman Brothers so successful </li></ul><ul><li>Bear Stearns was routinely described as “known for its risk controls”. </li></ul>Examples of effective risk management
  4. 4. <ul><li>Second most important issues for SC executives (IBM 2009) </li></ul><ul><li>88% reported fragile supply chains (Aberdeen 2008) </li></ul><ul><li>46% reported better supply chain risk management is needed to ensure business continuity (AMR 2007) </li></ul><ul><li>77% of executives noted increased concerns about supply chain risks (McKinsey 2008 - relative to 65% in 2006) </li></ul>What managers are saying about disruptions
  5. 5. Obstacles to addressing risks Survey done by Harris Interactive in 2005 .
  6. 6. <ul><li>The financial consequences of supply chain disruptions </li></ul><ul><li>- shareholder value </li></ul><ul><li>- stock price volatility </li></ul><ul><li>- profitability, sales, and costs </li></ul><ul><li>Primary drivers of supply chain disruptions </li></ul><ul><li>How to avoid and manage supply chain disruptions? </li></ul>Agenda
  7. 7. <ul><li>Lower Revenues </li></ul><ul><li>Higher costs </li></ul><ul><li>Poor asset utilization </li></ul><ul><li>Excess inventory, inventory write-offs, stockouts </li></ul><ul><li>Higher cost of capital/borrowing </li></ul><ul><li>Shareholder lawsuits </li></ul><ul><li>Management and personnel turnover </li></ul><ul><li>Loss of reputation and credibility, negative publicity </li></ul>Consequences of disruptions
  8. 8. <ul><li>1000+ announcements of supply chain disruptions (production or shipment delays) from Wall Street Journal and Dow Jones News </li></ul><ul><ul><li>- Sun Microsystems delays shipments of workstations and servers, Dow Jones News Service, December, 14, 2000. </li></ul></ul><ul><ul><li>- Sony Sees Shortage of Playstation 2s for Holiday Season”, The Wall Street Journal, September 28, 2000. </li></ul></ul><ul><ul><li>- Boeing pushing for record production, finds parts shortages, delivery delays, Wall Street Journal, June 26, 1997. </li></ul></ul><ul><ul><li>- Hershey will miss earnings estimate by as much as 10% because of problems in delivering order, Wall Street Journal, September 14, 1999. </li></ul></ul>Sample
  9. 9. Responsibility for disruptions
  10. 10. Reasons for disruptions
  11. 11. <ul><li>Stock price effects of disruption announcements </li></ul><ul><li>- the day before and day of the announcement </li></ul><ul><li>Long-term effects (3 years) of disruptions on </li></ul><ul><ul><li>Stock returns </li></ul></ul><ul><ul><li>Volatility </li></ul></ul><ul><ul><li>Profitability </li></ul></ul><ul><ul><li>Performance impacts estimated after adjusting for the performance of benchmarks </li></ul></ul>Performance implications
  12. 12. Stock market reaction to disruption announcements
  13. 13. Comparison with stock market reaction to other corporate events Financial events Stock splits 3.3% Open market share repurchase 3.5% Proxy contest 4.2% Increasing financial leverage 7.6% Decreasing financial leverage -5.4% Seasoned equity offerings -3.0% Marketing events Change in firm name 0.7% Brand leveraging 0.3% Celebrity endorsement 0.2% New product introduction 0.7% Affirmative action awards 1.6% Information technology events IT Investments 1.0% IT problems -1.7% Operational events Increase in capital expenditure 1.0% Increase in R&D expenditure 1.4% Effective TQM implementation 0.7% Internal corporate restructuring 1.0% Decrease in capital expenditure -1.8% Plant closing -0.7% Automotive recalls -0.5%
  14. 14. Average stock returns over different intervals
  15. 15. Average stock returns over three years
  16. 16. Volatility changes On average 21% increase in volatility
  17. 17. <ul><li>S&P 500 has returned about 12% annually over the last 15 years </li></ul><ul><li>Major disruptions are associated with 35% underperformance in stock returns </li></ul><ul><li>One major disruption every 10 years – average return of 9% </li></ul>Broader perspectives
  18. 18. Profitability impacts of disruptions
  19. 19. Profitability impacts of disruptions
  20. 20. <ul><li>Disruptions cause significant destruction in corporate performance </li></ul><ul><li>It does not matter who or what caused the disruption – you still pay </li></ul><ul><li>Small firms suffer more from disruptions </li></ul><ul><li>Firms do not quickly recover from disruptions </li></ul>Summary
  21. 21. <ul><li>Globalization </li></ul><ul><li>Dispersion of supply chain risk </li></ul><ul><li>Increased leveraged </li></ul><ul><li>Focused on efficiency </li></ul><ul><li>High degree of interdependency </li></ul><ul><li>High degree of uncertainty </li></ul>Are supply chains more prone to disruptions today
  22. 22. <ul><li>Consequences are not known </li></ul><ul><li>Low frequency events </li></ul><ul><li>Resource shortages </li></ul><ul><li>Requires cross-functional effort </li></ul><ul><li>Short tenure of managers </li></ul><ul><li>You don’t get credit for fixing problems that never happened </li></ul><ul><li>You have not experienced one </li></ul>Why enough attention is not paid to the possibility of disruptions?
  23. 23. <ul><li>Reduce the frequency (probability) of disruptions </li></ul><ul><li>Better forecasting </li></ul><ul><li>Better planning </li></ul><ul><li>Communicate, collaborate, and share </li></ul><ul><li>Develop ability to predict disruptions (business intelligence) </li></ul><ul><li>Select, define, and track key performance indicators </li></ul><ul><li>Analyze disruptions to develop key leading indicators </li></ul><ul><li>Track leading indicators </li></ul><ul><li>Need visibility </li></ul>Strategies for managing supply chain risks
  24. 24. <ul><li>Elapsed time between the occurrence and detection of disruptions </li></ul><ul><li>Aim for zero elapsed time </li></ul><ul><li>Real time visibility of the extended supply chain </li></ul><ul><li>Event management systems </li></ul><ul><li>Time it takes to resolve disruptions </li></ul><ul><li>Quick resolution, prevent escalation and worsening </li></ul><ul><li>A process for dealing/responding to disruptions </li></ul><ul><li>Developing capabilities to react and respond </li></ul>Strategies for managing supply chain risks
  25. 25. <ul><li>Identify the primary sources of supply chain risks. </li></ul><ul><li>Estimate the likelihood (probability, frequency, or chances) of the risk occurring. </li></ul><ul><li>Estimate the financial consequences (impact) of risks. </li></ul><ul><li>Prioritize risks based on likelihood and financial impact. </li></ul><ul><li>Identify strategies and actions to mitigate the frequency andor financial consequences of supply chain risks. </li></ul><ul><li>Review the risk management process and continuously improve the process. </li></ul>A framework for managing supply chain risks
  26. 26. Debra Elkins: A framework for Business Interruption Risk Analysis: GM Research Lab Paper
  27. 27. <ul><li>Estimate the likelihood of occurrence of risk </li></ul><ul><li>Estimate the probability/frequency </li></ul><ul><li>Qualitative assessment (point scale or categories) </li></ul><ul><li>Estimate the financial consequences </li></ul><ul><li>Estimate the $ value of the risk </li></ul><ul><li>Qualitative assessment (point scale or categories) </li></ul>Likelihood/consequences of supply chain risks
  28. 28. Prioritizing risks Effort and resources not committed Financial Impact Certain Likely Possible Remote Little Moderate Significant Catastrophic Active Management of Risk Highest Priority for Risk Mitigation Monitor and address risk mitigation strategies Effort and resources not committed Likelihood/frequency <ul><li>Business Recovery Cost </li></ul><ul><li>Business Recovery Speed </li></ul>
  29. 29. <ul><li>Organization culture </li></ul><ul><li>- Face reality </li></ul><ul><li>- Avoid denial </li></ul><ul><li>- Share the bad news </li></ul><ul><li>Build capabilities to manage supply chain risks </li></ul>Proactively managing disruptions
  30. 30. Building capabilities to manage risks <ul><li>Anticipate </li></ul><ul><ul><li>- turbo charge your imagination </li></ul></ul><ul><li>- scenario anticipation </li></ul><ul><li>- risks faced by various organizations </li></ul><ul><li>Plan </li></ul><ul><li>- estimate probability and financial consequences </li></ul><ul><li>- map the interdependencies </li></ul><ul><li>- contingency planning </li></ul><ul><li>- stress testing and practice </li></ul><ul><li>Execute </li></ul><ul><li>- monitor and track </li></ul><ul><li>- quick deployment and response </li></ul>
  31. 31. <ul><li>Traditional way – focus on efficiency </li></ul><ul><li>New or alternate way – preserve value and avoid value destruction </li></ul><ul><li>Value of reliable, responsive, and robust supply chain </li></ul><ul><li>Prevention role of effective SCM </li></ul><ul><li>Effective SCM buys insurance against value destruction </li></ul>Implications for managing supply chains
  32. 32. <ul><li>Managing supply chain risks should be a critical issue for top management – provide leadership and resources </li></ul><ul><li>Firms need to develop capabilities for effectively managing risks </li></ul><ul><li>Ability to manage supply chain risks can determine whether a firm can compete effectively </li></ul>Final Thoughts
  33. 33. <ul><li>Can you afford the risk of a major supply chain disruption? </li></ul><ul><li>What is the easiest way to create shareholder value or make money? Stop losing it! </li></ul>Final Thoughts
  34. 34. Back up Slides
  35. 35. <ul><li>Identify the primary sources of supply chain risks. </li></ul><ul><li>Estimate the likelihood (probability, frequency, or chances) of the risk occurring. </li></ul><ul><li>Estimate the financial consequences (impact) of risks. </li></ul><ul><li>Prioritize risks based on likelihood and financial impact. </li></ul><ul><li>Identify strategies and actions to mitigate the frequency andor financial consequences of supply chain risks. </li></ul><ul><li>Review the risk management process and continuously improve the process. </li></ul>A process for managing supply chain risks
  36. 36. <ul><li>Natural disasters </li></ul><ul><li>Inaccurate forecasts </li></ul><ul><li>Supplier </li></ul><ul><li>Poor Performance </li></ul><ul><li>Long lead times </li></ul><ul><li>Bankruptcy </li></ul><ul><li>Customers </li></ul><ul><li>Changing needs </li></ul><ul><li>Variability in demand </li></ul><ul><li>Bankruptcy </li></ul><ul><li>Logistics </li></ul><ul><li>Equipment shortages </li></ul><ul><li>Congestion </li></ul><ul><li>Accidents </li></ul><ul><li>Regulations </li></ul>Categories of supply chain risks <ul><li>Internal risks </li></ul><ul><li>Inflexible capacity </li></ul><ul><li>Equipment breakdown </li></ul><ul><li>Long lead times </li></ul><ul><li>Procurement </li></ul><ul><li>Long-term vs. short-term </li></ul><ul><li>Squeeze prices </li></ul><ul><li>Single sourced </li></ul><ul><li>Supply chain structure </li></ul><ul><li>Complexity </li></ul><ul><li>Globalization </li></ul><ul><li>Outsourcing </li></ul><ul><li>Single sourcing </li></ul><ul><li>Over concentration </li></ul><ul><li>Lean supply chains </li></ul>
  37. 37. <ul><li>Labor </li></ul><ul><li>Strikesabsenteeism </li></ul><ul><li>Inflexible workforce </li></ul><ul><li>Information technology </li></ul><ul><li>Unreliable IT systems </li></ul><ul><li>Non-integrated IT network </li></ul><ul><li>Lack of timely information </li></ul>Categories of supply chain risks <ul><li>Macro-economic factors </li></ul><ul><li>Exchange rate </li></ul><ul><li>Interest rate </li></ul><ul><li>Tax policies </li></ul><ul><li>Credit squeeze </li></ul><ul><li>Government/regulatory </li></ul><ul><li>Security </li></ul><ul><li>Rules and regulations </li></ul>
  38. 38. Debra Elkins: A framework for Business Interruption Risk Analysis: GM Research Lab Paper
  39. 39. <ul><li>Estimate the likelihood of occurrence of risk </li></ul><ul><li>Estimate the probability/frequency </li></ul><ul><li>Qualitative assessment (point scale or categories) </li></ul><ul><li>Estimate the financial consequences </li></ul><ul><li>Estimate the $ value of the risk </li></ul><ul><li>Qualitative assessment (point scale or categories) </li></ul>Likelihood/consequences of supply chain risks
  40. 40. <ul><li>Information from your own organization </li></ul><ul><li>Trade association and trade publications </li></ul><ul><li>Conferences </li></ul><ul><li>Internet, newspaper, and magazines </li></ul><ul><li>Universities </li></ul><ul><li>Experts and consultants </li></ul>Getting information about supply chain risks
  41. 41. Prioritizing risks Effort and resources not committed Financial Impact Certain Likely Possible Remote Little Moderate Significant Catastrophic Active Management of Risk Highest Priority for Risk Mitigation Monitor and address risk mitigation strategies Effort and resources not committed Likelihood/frequency <ul><li>Business Recovery Cost </li></ul><ul><li>Business Recovery Speed </li></ul>
  42. 42. <ul><li>Contingency planning </li></ul><ul><li>Analyze what could potentially go wrong </li></ul><ul><li>Identify and analyze possible alternatives </li></ul><ul><li>Develop plans – what to do, when, how, and who </li></ul><ul><li>Assign responsibility and give authority </li></ul><ul><li>Monitor the situation </li></ul><ul><li>Execute the plan as needed </li></ul>Strategies for managing supply chain risks
  43. 43. <ul><li>Redundancy </li></ul><ul><li>Extra inventory </li></ul><ul><li>Extra capacity </li></ul><ul><li>Backup systems </li></ul><ul><li>Multiple suppliers </li></ul><ul><li>Multiple sites </li></ul><ul><li>Dedicated resource to products, processes </li></ul>Strategies for managing supply chain risks
  44. 44. <ul><li>Know your suppliers </li></ul><ul><li>Two-way communication - build trust and relationship with critical suppliers </li></ul><ul><li>Set up a financial rating system – profitability, cash flows, ownership structure, debt structure </li></ul><ul><li>Set up an early warning system – quality, capacity, delivery issues, financial issues </li></ul><ul><li>Know your suppliers’ suppliers </li></ul><ul><li>Interdependencies of your suppliers – same customers, same industries, same shareholders </li></ul>Strategies for managing supply chain risks
  45. 45. <ul><li>Know your customers </li></ul><ul><li>Two-way communication - build trust and relationship with key customers </li></ul><ul><li>Set up a financial rating system – profitability, cash flows, ownership structure, debt structure </li></ul><ul><li>Set up an early warning system – payment timing, inventory </li></ul><ul><li>Concentration of customer base </li></ul><ul><li>Know your customers’ customers </li></ul><ul><li>Other suppliers to your customers </li></ul>Strategies for managing supply chain risks
  46. 46. <ul><li>Visibility </li></ul><ul><li>Aware of what is happening in supply chains </li></ul><ul><li>Select key leading indicators of supply chain </li></ul><ul><li>Monitor these indicators using appropriate benchmark </li></ul><ul><li>Communicate deviations to appropriate levels </li></ul><ul><li>Collaborate and cooperate with your supply chain partners </li></ul><ul><li>Develop trust among supply chain partners </li></ul><ul><li>Show that you are willing to collaborate </li></ul><ul><li>Agree upfront on how to share the benefits </li></ul><ul><li>Share information, joint decision making/problem solving </li></ul>Strategies for managing supply chain risks
  47. 47. <ul><li>Improve the accuracy of forecasts </li></ul><ul><li>Long-term forecasts are less accurate than short-term </li></ul><ul><li>Aggregate forecasts are easier than disaggregate </li></ul><ul><li>Collect data from your supply chain partners </li></ul><ul><li>Question the assumptions that go into building a forecast </li></ul><ul><li>Reduce mean and variance of lead times </li></ul><ul><li>Remove non-value added steps and activities </li></ul><ul><li>Improve the reliability and robustness of processes </li></ul><ul><li>Consider lead time issues in planning and forecasting </li></ul>Strategies for managing supply chain risks
  48. 48. <ul><li>Reduce the frequency (probability) of disruptions </li></ul><ul><li>Better forecasting </li></ul><ul><li>Better planning </li></ul><ul><li>Communicate, collaborate, and share </li></ul><ul><li>Develop ability to predict disruptions (business intelligence) </li></ul><ul><li>Select, define, and track key performance indicators </li></ul><ul><li>Analyze disruptions to develop key leading indicators </li></ul><ul><li>Track leading indicators </li></ul><ul><li>Need visibility </li></ul>Strategies for managing supply chain risks
  49. 49. <ul><li>Elapsed time between the occurrence and detection of glitch </li></ul><ul><li>Aim for zero elapsed time </li></ul><ul><li>Real time visibility of the extended supply chain </li></ul><ul><li>Event management systems </li></ul><ul><li>Time it takes to resolve the glitch </li></ul><ul><li>Quick resolution, prevent escalation and worsening </li></ul><ul><li>A process for dealing/responding to disruptions </li></ul><ul><li>Developing capabilities to react and respond </li></ul>Strategies for managing supply chain risks
  50. 50. <ul><li>Flexibility </li></ul><ul><li>- Product design </li></ul><ul><li>- standardization </li></ul><ul><li>- modularity </li></ul><ul><li>- parts commonality </li></ul><ul><li>- Manufacturing </li></ul><ul><li> - flexible technology and capacity </li></ul><ul><li> - committed and uncommitted capacity </li></ul><ul><li>- standard processes </li></ul><ul><li>- cross-training </li></ul><ul><li> - Sourcing </li></ul><ul><li>- flexible contracts </li></ul><ul><li>- multiple sourcing </li></ul><ul><li>- supplier capabilities </li></ul><ul><li>- spot markets </li></ul>Strategies for managing supply chain risks
  51. 51. <ul><li>Have you done a post-mortem or review of your risk management processes and framework? </li></ul><ul><li>Have you evaluated the effectiveness of your process? </li></ul><ul><li>What worked and what did not? </li></ul><ul><li>What can be improved? </li></ul><ul><li>Have the key lessons been recorded for other members of your firm to learn from? </li></ul>Improving the supply chain risk management process
  52. 52. <ul><li>Managing supply chain risks should be a critical issue for top management </li></ul><ul><li>Top management should provide leadership and resources for the organization to address supply chain risk issues </li></ul><ul><li>Firms need to develop capabilities for effectively managing risks </li></ul><ul><li>Ability to manage supply chain risks can determine whether a firm can compete effectively </li></ul>Final Thoughts
  53. 53. <ul><li>56% of the respondents indicated that they are dealing with risks by focusing on risk prevention and control rather than risk transfer </li></ul><ul><li>Risk transfer options are limited and most of the risks cited in the survey go beyond what any insurance company can reasonably insure </li></ul>Other findings
  54. 54. Profitability impacts in the year after the disruption
  55. 55. Profitability impacts in the 2 nd year after the disruption
  56. 56. <ul><li>Without facts you are just another person with an opinion </li></ul><ul><li>unless </li></ul><ul><li>you are at a level of the organization where your opinion becomes fact </li></ul>A thought

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