View stunning SlideShares in full-screen with the new iOS app!Introducing SlideShare for AndroidExplore all your favorite topics in the SlideShare appGet the SlideShare app to Save for Later — even offline
View stunning SlideShares in full-screen with the new Android app!View stunning SlideShares in full-screen with the new iOS app!
Introductions Dr. Kevin McCormack www.drkresearch.org
DRK SCRD Percipio Profit Point 17 th Floor iCognitive Lean Institute Process Management Research Center Tom Davenport Shanghai Consulting Supply Chain Resource Consortium NC State University ESRI SAS Vlerick Leuven Gent Management School Belgium Independents Associates IACCM ISM QUT Australia Babson College MA University of OK Supply Chain Council SCM Club Neurametrics Singapore Shanghai Europe Portland, OR Phil. PA TX NC TBD BPM Network University of Ljubljana Slovenia UMFG Brazil Hilbert Orion NJ NIPE Research, Publication, Knowledge Transfer (education, consulting) University of Zagreb Croatia
Dr. Kevin McCormack is President of DRK Research and an Adjunct Professor at NC State University and the University of Oklahoma . Dr. McCormack has over 30 years of business leadership, teaching, research and consulting experience. His experience covers many national and international industry segments and a broad range of business processes. He has been a member of or has successfully conducted engagements with several government agencies and major companies in the food, forest products, pharmaceutical, chemical, consumer products, high tech and the plastics industry. Some of his clients have been Kraft, Philip Morris, CPC International, Cargill, Texas Instruments, USMC, Phillips Petroleum, Chevron-Phillips, Shell, Columbia Forest Products, Dow Chemical, Warner-Lambert, Standard Charter Bank, Microsoft, Intel, Tektronix, several state governments, Borden Chemical, California Public Employees Retirement System (CalPERS), Wal-Mart, Campbell’s, General Mills, Fairchild Industries and PepsiCo. He has written five books and numerous articles on Supply Chain Management and business strategy.
Gartner Magic Quadrant for Basel II Applications Magic Quadrant Disclaimer The Magic Quadrant is copyrighted November 22, 2006 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. This Magic Quadrant graphic was published by Gartner, Inc. as part of a larger research note and should be evaluated in the context of the entire report. The Gartner report is available upon request from SAS. Source: Magic Quadrant for Basel II Software Applications, 2006, Douglas McKibben, David Furlonger.
Chartis Group – Operational Risk Management Systems 2006
No. of Suppliers 0 5000 10000 5000 10000 No. of Supply SKUs or parts Highly Competitive (High Buyer Power) Concentrated (High Supplier Power) Highly Complex / Competitive (High Buyer Leverage) Concentrated / Invested (High Supplier Power) SC Complexity Your Company
82% of companies are concerned about the risk in their Supply chain…
… but only 11% actively manage them (Aberdeen Research)
Almost two-thirds of respondents to McKinsey's latest global survey say the risks to their supply chain have increased over the past five years.
A significant number of executives say their company doesn't spend enough time or resources on mitigating risk.
Nearly one-quarter say their company does no formal risk assessment (McKinsey)
50% of the executives expect risks associated with raw-material supplies or parts to increase over the next three years
36% anticipate increased risk of service failures due to longer supply chains and lead times
94% said the disruption impacted profitability (Accenture)
Risk Defined Risk in general can be defined as a collection of pairs of likelihood (L) and outcomes / impact (O) of events. The distribution pattern of the (likelihood; outcome) pairs is called a risk profile . Definitions of risk must also have a time dimension or a specific time horizon (day, month, year, etc.) and a specific perspective or view that defines the unit of analysis (boundaries, what’s not included, etc.).
The International Organization for Standardization (ISO, 2002) defines two of the essential components of risk:
1. losses (along with related amounts) and
2. uncertainty of their occurrence.
In the financial industry, operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events (New Basel Capital Accord, 2006) .
Evolution of Supplier Development Supply Network Management Time Supply Base Performance/Capability Higher TOTAL QUALITY MANAGEMENT SUPPLY BASE ASSESSMENT SUPPLY BASE REDUCTION REACTIVE SUPPLIER DEVELOPMENT STRATEGIC SUPPLIER DEVELOPMENT Lower Evolutionary Strategies
Evolution of Strategic Sourcing Operate Consolidate Integrate Optimize Innovate Organizational Maturity Performance, ROI, Value Supply Risk Management Forecasting Data Mining Text Mining Spend Analysis Data Quality Data Cleansing Supply Base Optimization Supplier Ranking Data Analysis Commodity Classification Master Data Management Performance Management
Foresight vs. Hindsight Predictive Analytics Optimization Predictive Modeling Forecasting Reporting / OLAP Data Management Data Access What’s the best that can happen? How much and where? What will happen next? What happened? How many, how often? Intelligence Business Value
Performance Time Preparation Initial Impact Recovery Sustaining Impact >0 Disruption Event Full Impact Supply Risk Disruption Profiles “ At present” Ave: $120,000,000 Preparation Initial Impact Detection and Response Recovery - minimized Sustaining Impact = 0 Full Impact – Avoided! “ In the future” Estimated Ave: $1,200,000 Detection and response