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How will you control your emerging supply chain risks
 

How will you control your emerging supply chain risks

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    How will you control your emerging supply chain risks How will you control your emerging supply chain risks Presentation Transcript

    • HOW TO CONTROL SUPPLY CHAIN RISKS THAT DISRUPT YOUR BUSINESS December 3, 2013 Larry Smith & Neil Smith from
    • Quick Background About Functionally Focused Software Frameworks for Effective Risk Management Business Enterprises Insurance Management Private Equity Commercial Lending Platform: Risk Management Operating System Partnering Opportunities Resources Design People-Process-Technology Solutions Configure and Deploy Software Delivery Expert Professional Services Education Newsletters © Equity Metrics - All Rights Reserved
    • HOW TO CONTROL SUPPLY CHAIN RISKS When something goes wrong in your supply chain, people connected to the supply chain experience the burden. • • • • • Production planners Production control managers Purchasing managers Customer service managers Inventory managers • • • • • Warehousing managers Distribution managers Business partners Product development Product management • • • • • Supply chain managers Financial managers CEO, CFO, COO, CRO Your customers AND YOU The issue results in a domino effect of problems for dependent stakeholders. You experience these risks through: • A lack of control over your day-to-day process • More stress in your work life • Internal debates • Lack of clarity for decision-making • And other experiences How can you gain control over the risks that exist, hide and emerge in your supply chain? Internal & external risks affect your job, your company and other stakeholders. © Equity Metrics - All Rights Reserved
    • How to Control Supply Chain Risks Topics for Today’s Discussion 1. What is the definition of supply chain risk? 2. Why supply chain risk controls are important to minimize current & future disruptions 3. What is the difference between Supply Chain: a. Risk identification & assessment b. Risk control & monitoring 4. How to develop a risk control & monitoring framework for your supply chain
    • What is the definition of supply chain risk? Something in your supply chain that may: 1.go out of control and 2.impact your business © Equity Metrics - All Rights Reserved
    • What is the definition of supply chain risk? Examples Business Impacted Industry Issue Implications Genzyme Corporation Drug Virus Depressed stock price Market losses to competition Company sold NECC Compounding Center Drug Meningitis poisoning 44 Deaths Company closure Litigation Big Dig Tunnel Ceiling Collapse Construction Loose Ceiling Plate People Died Litigation Peanut Corporation of America Food Salmonella Chapter 7 Criminal law suits Toyota Automotive Brake recall Damaged reputation Revenue losses Tyson Foods Food Beef recall Damaged reputation iRobot Robotics Defense spending Loss of customer base © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions
    • Why supply chain risk controls are important to minimize current & future disruptions Example: Food Industry Farmer Grower Importer Raw material suppliers 1 Food Warehouser Distributors Food Producer Manufacturers 1 3 2 Resellers 1 3 2 Wholesaler Supermarket Restaurant Hotel 1 2 4 2 Consumer Customer 3 flow of operational information LP Logistics Provider 1 3 2 Logistics Providers LP LP Logistics Provider Logistics Provider © Equity - All - All Rights Reserved © Equity Metrics MetricsRights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Example: Food Industry Farmer Grower Importer Raw material suppliers 1 Food Warehouser Distributors Food Producer Manufacturers 1 3 2 Resellers 1 3 2 Wholesaler Supermarket Restaurant Hotel 1 2 4 2 Consumer Customer 3 flow of risk information LP Logistics Provider 1 3 2 Logistics Providers LP LP Logistics Provider Logistics Provider © Equity - All - All Rights Reserved © Equity Metrics MetricsRights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Example: Food Industry Farmer Grower Importer Raw material suppliers 1 Food Warehouser Distributors Food Producer Manufacturers 1 3 2 Resellers 1 3 2 Wholesaler Supermarket Restaurant Hotel 1 2 4 2 Consumer Customer 3 flow of operational information LP Logistics Provider 1 3 LP LP Logistics Provider Logistics Provider flow of risk information 2 Logistics Providers © Equity - All - All Rights Reserved © Equity Metrics MetricsRights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Example: Food Industry Farmer Grower Importer Raw material suppliers 1 Food Warehouser Distributors Food Producer Manufacturers 1 3 2 Resellers 1 3 2 Wholesaler Supermarket Restaurant Hotel 1 2 4 2 Consumer Customer 3 flow of risk information LP Logistics Provider 1 3 2 Logistics Providers LP LP Logistics Provider Logistics Provider © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer INTERNAL RISKS 1 Business Risks financial risks operational risks EXTERNAL RISKS market risks regulatory risks economic risks environmental risks legal risks flow of risk information Flow of risk Information © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer 1 Business Risks financial risks Credit  rating Margin  generation Unplanned  costs Financing  availability INTERNAL RISKS Risk Information operational risks EXTERNAL RISKS market risks regulatory risks economic risks environmental risks legal risks © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer 1 Business Risks operational risks Product  contamination Change  in  raw  material Transportation  merger Security  breach Smart  grid  outage supplier risks Engineering  changes Capacity  constraints Financial  credit Supplier  quality Product  delays INTERNAL RISKS financial risks Risk Information EXTERNAL RISKS market risks regulatory risks economic risks environmental risks legal risks © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer 1 Business Risks market risks Stock  prices Oil  prices Interest  rates Foreign  exchange  prices Defense  spending Commodity  prices Labor  shortage Market  consolidation Union  strikes INTERNAL RISKS financial risks Risk Information operational risks EXTERNAL RISKS regulatory risks economic risks environmental risks legal risks © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer 1 Business Risks economic risks Policy  reform Border  security Government  sequester Changing  government   regulations INTERNAL RISKS financial risks Risk Information operational risks EXTERNAL RISKS market risks regulatory risks environmental risks legal risks © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer 1 Business Risks environmental risks Floods Fires Hurricanes Earthquakes Tsunamis INTERNAL RISKS financial risks Risk Information operational risks EXTERNAL RISKS market risks regulatory risks economic risks legal risks © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions Manufacturer 1 Business Risks regulatory risks Tax  reform Minimum  wage  changes Logistical  restrictions Trade  barriers INTERNAL RISKS financial risks Risk Information operational risks EXTERNAL RISKS market risks economic risks environmental risks legal risks © Equity Metrics - All Rights Reserved
    • Regulator Perspective Information Shapes Decisions that Impact Dependent Stakeholders Regulator Modify regulatory policies Foresee economic risks Notify corporations
    • Information Shapes Decisions and Impact Interconnected Stakeholders in the Supply Chain Manufacturer’s Perspective We can then maintain our margins Manufacturer 1 risk information Manage financial condition receive change in regulatory policy Reaction: find a lower price supplier Perception: Regulation will impact our margins Manage operational state BUSINESS PERFORMANCE MANAGEMENT
    • Risk control status of your supply chain Does your company... YES ...capture risk information across your supply chain that can impact your business? YES ...store the risks in a decentralized risk register? YES ...implement risk control measures at the process level? YES ...monitor risk thresholds? YES ...evaluate the cause and effect of the risks? YES ...communicate risk violations to impacted stakeholders? YES ...shape decisions based on current and future risk states? In Control NO out of control 1. It’s not only about collaborating about operational business information. That doesn’t tell you what you need to know about supply chain risks. “In G-d we trust. Everyone else bring data”
    • Risk control status of your supply chain Does your company... ...capture risk information across your supply chain that can impact your business? Risk Identification & Assessment ...store the risks in a central risk register? ...implement risk control measures at the process level? ...monitor risk thresholds? ...evaluate the cause and effect of the risks? Risk Control & Monitoring ...communicate risk violations to impacted stakeholders? ...shape decisions based on current and future risk states? 1. It’s not only about collaborating about operational business information. That doesn’t tell you what you need to know about supply chain risks. “In G-d we trust. Everyone else bring data”
    • Why supply chain risk controls are important to minimize current & future disruptions RISK-REWARD PROCESSES RISK-REWARD DECISIONS STAKEHOLDER COMMUNICATIONS BUSINESS PROCESS MANAGEMENT YOU Risk Information © Equity Metrics - All Rights Reserved
    • Why supply chain risk controls are important to minimize current & future disruptions YOU RISK-REWARD PROCESSES Risk perspective RISK-REWARD DECISIONS STAKEHOLDER COMMUNICATIONS BUSINESS PROCESS MANAGEMENT Risk Information RISK-REWARD PROCESSES
    • Why supply chain risk controls are important to minimize current & future disruptions Audience question Who has experienced supply chain risks in their business?
    • Why supply chain risk controls are important to minimize current & future disruptions Audience question What types of supply chain risks have you experienced?
    • Why supply chain risk controls are important to minimize current & future disruptions Audience question What are some challenges you’ve experienced to control those risks?
    • Why supply chain risk controls are important to minimize current & future disruptions Audience question How could your supply chain risks affect your business?
    • How to develop a Risk Control & Monitoring Framework For your supply chain
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Process Execution Frameworks Risk-­‐centric processes attain adaptability Risk-­‐focused people  skills RISK  CONTROL EXCELLENCE REALIZE efficiency ACHIEVE effectiveness Risk   technology capabilities Analytics
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Process Execution Frameworks Risk-­‐centric processes attain adaptability Risk-­‐focused people  skills RISK  CONTROL EXCELLENCE REALIZE efficiency ACHIEVE effectiveness Risk   technology capabilities Analytics
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Supply Chain Risk Control Skills risk monitors business stakeholders Risk-focused people skills 6 business stakeholder communicators risk aggregators 1 7 5 2 3 4 decision makers risk analysts risk communicators
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Process Execution Frameworks Risk-­‐centric processes attain adaptability Risk-­‐focused people  skills RISK  CONTROL EXCELLENCE REALIZE efficiency ACHIEVE effectiveness Risk   technology capabilities Analytics
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Supply Chain Risk Control Processes risk monitoring stakeholder communication Risk-centric processes 5 risk-based decision-making risk aggregation 1 6 4 2 3 risk analysis risk communication
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Process Execution Frameworks Risk-­‐centric processes attain adaptability Risk-­‐focused people  skills RISK  CONTROL EXCELLENCE REALIZE efficiency ACHIEVE effectiveness Risk   technology capabilities Analytics
    • How to Develop a Risk Control & Monitoring Framework For Your Supply Chain Supply Chain Risk Technology Monitor changing risks Illustrate stakeholder viewpoints 7 Risk technology capabilities 6 Pre-experience decision implications Profile supply chain participants 1 5 2 3 4 Visualize changing risk conditions Capture risk measures Manage risk scenarios
    • Thank you for your time. Larry Smith & Neil Smith from
    • About Functionally Focused Software Frameworks for Effective Risk Management Business Enterprises Insurance Management Private Equity Commercial Lending Platform: Risk Management Operating System Partnering Opportunities Resources Design People-Process-Technology Solutions Configure and Deploy Software Delivery Expert Professional Services Education Newsletters © Equity Metrics - All Rights Reserved