Emerging supply chain risks how will you control them

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A revolutionary way to control supply chain risks.

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Emerging supply chain risks how will you control them

  1. 1. HOW TO CONTROL SUPPLY CHAIN RISKS March 13, 2013 Larry Smith & Neil Smith from
  2. 2. RISK-REWARD FRAMEWORKS 6 RISK-REWARD DECISIONS RISK-REWARD COMMUNICATIONS RISK CONTROL RISK ANALYSIS RISK MONITORING VALUE CREATION Strengthen your business capabilities. Quick Background About © Equity Metrics - All Rights Reserved
  3. 3. • Production planners • Production control managers • Purchasing managers • Customer service managers • Inventory managers When something goes wrong in your supply chain, people connected to the supply chain experience the burden. The issue results in a domino effect of problems for dependent stakeholders. You experience these risks through: How can you gain control over the risks that exist, hide and emerge in your supply chain? •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 Internal & external risks affect your job, your company and other stakeholders. HOW TO CONTROL SUPPLY CHAIN RISKS • Supply chain managers • Financial managers • CEO, CFO, COO, CRO • Your customers • ANDYOU • Warehousing managers • Distribution managers • Business partners • Product development • Product management © Equity Metrics - All Rights Reserved
  4. 4. How to Control Supply Chain Risks 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 Topics for Today’s Discussion
  5. 5. 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
  6. 6. Implications Depressed stock price Market losses to competition Company sold Chapter 7 Criminal law suits Damaged reputation Revenue losses Damaged reputation Business Impacted Genzyme Corporation Peanut Corporation of America Toyota Tyson Foods iRobot Issue Virus Salmonella Brake recall Beef recall Defense spending Loss of customer base Examples Industry Drug Food Automotive Food Robotics 44 Deaths Company closure Litigation NECC Compounding Center Meningitis poisoningDrug People Died Litigation Big Dig Tunnel Ceiling Collapse Loose Ceiling PlateConstruction What is the definition of supply chain risk? © Equity Metrics - All Rights Reserved
  7. 7. Why supply chain risk controls are important to minimize current & future disruptions
  8. 8. Manufacturers Distributors Resellers Logistics Providers Customer Logistics Provider Logistics Provider Logistics Provider Raw material suppliers Farmer Grower Importer Food Warehouser Wholesaler Supermarket Restaurant Hotel Food Producer Consumer LP 2 4 31 2 3 1 3 2 LP LP 1 11 2 3 2 © Equity Metrics - All Rights Reserved Why supply chain risk controls are important to minimize current & future disruptions flow of operational information © Equity Metrics - All Rights Reserved Example: Food Industry
  9. 9. Manufacturers Distributors Resellers Logistics Providers Customer Logistics Provider Logistics Provider Logistics Provider Raw material suppliers Farmer Grower Importer Food Warehouser Wholesaler Supermarket Restaurant Hotel Food Producer Consumer LP 2 4 31 2 3 1 3 2 LP LP 1 11 2 3 2 © Equity Metrics - All Rights Reserved flow of risk information © Equity Metrics - All Rights Reserved Why supply chain risk controls are important to minimize current & future disruptions Example: Food Industry
  10. 10. Manufacturers Distributors Resellers Logistics Providers Customer Logistics Provider Logistics Provider Logistics Provider Raw material suppliers Farmer Grower Importer Food Warehouser Wholesaler Supermarket Restaurant Hotel Food Producer Consumer LP 2 4 31 2 3 1 3 2 LP LP 1 11 2 3 2 © Equity Metrics - All Rights Reserved Why supply chain risk controls are important to minimize current & future disruptions flow of operational information © Equity Metrics - All Rights Reserved Example: Food Industry flow of risk information
  11. 11. Manufacturers Distributors Resellers Logistics Providers Customer Logistics Provider Logistics Provider Logistics Provider Raw material suppliers Farmer Grower Importer Food Warehouser Wholesaler Supermarket Restaurant Hotel Food Producer Consumer LP 2 4 31 2 3 1 3 2 LP LP 1 11 2 3 2 © Equity Metrics - All Rights Reserved flow of risk information Why supply chain risk controls are important to minimize current & future disruptions 1 1 1 3 2 LP LP 1 2 3 2 Example: Food Industry
  12. 12. Flow of risk Information EXTERNAL RISKS market risks regulatory risks economic risks environmental risks legal risks financial risks operational risks Manufacturer INTERNAL RISKS 1 Business Risks flow of risk information Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved
  13. 13. Manufacturer Risk Information EXTERNAL RISKSINTERNAL RISKS 1 Business Risks Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved financial risks operational risks market risks regulatory risks environmental risks legal risks economic risks !"#$%&'"(&%)* +("*%)'*#)#"(&%,) -)./())#$'0,1&1 2%)()0%)*'(3(%/(4%/%&5
  14. 14. Manufacturer Risk Information EXTERNAL RISKSINTERNAL RISKS 1 Business Risks Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved 6)*%)##"%)*'07()*#1 8",$90&'0,)&(:%)(&%,) !7()*#'%)'"(;':(&#"%(/ <"()1.,"&(&%,)':#"*#" !(.(0%&5'0,)1&"(%)&1 2%)()0%(/'0"#$%& =9../%#"'>9(/%&5 =#09"%&5'4"#(07 =:("&'*"%$',9&(*# 8",$90&'$#/(51 supplier risks operational risks EXTERNAL RISKS market risks regulatory risks environmental risks legal risks economic risks financial risks
  15. 15. Manufacturer Risk Information EXTERNAL RISKSINTERNAL RISKS 1 Business Risks Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved Manufacturer market risks regulatory risks environmental risks legal risks economic risks operational risks =&,0?'."%0#1 @%/'."%0#1 A)&#"#1&'"(&#1 2,"#%*)'#B07()*#'."%0#1 C#D#)1#'1.#)$%)* !,::,$%&5'."%0#1 E(4,"'17,"&(*# +("?#&'0,)1,/%$(&%,) -)%,)'1&"%?#1 financial risks 1
  16. 16. Manufacturer Risk Information EXTERNAL RISKSINTERNAL RISKS 1 Business Risks Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved economic risks market risks environmental risks legal risks regulatory risks 8,/%05'"#D,": F,"$#"'1#09"%&5 G,3#"):#)&'1#>9#1&#" !7()*%)*'*,3#"):#)&' "#*9/(&%,)1 operational risks financial risks
  17. 17. Manufacturer Risk Information EXTERNAL RISKSINTERNAL RISKS 1 Business Risks Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved environmental risks market risks economic risks regulatory risks legal risksoperational risks financial risks 2/,,$1 2%"#1 H9""%0()#1 6("&7>9(?#1 <19)(:%1
  18. 18. Manufacturer Risk Information EXTERNAL RISKSINTERNAL RISKS 1 Business Risks Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved regulatory risks market risks environmental risks legal risks economic risks operational risks financial risks <(B'"#D,": +%)%:9:';(*#'07()*#1 E,*%1&%0(/'"#1&"%0&%,)1 <"($#'4(""%#"1
  19. 19. Regulator Modify regulatory policies Regulator Perspective Information Shapes Decisions that Impact Dependent Stakeholders Foresee economic risks Notify corporations
  20. 20. Information Shapes Decisions and Impact Interconnected Stakeholders in the Supply Chain Manufacturer’s Perspective Manage financial condition Manage operational state risk information BUSINESS PERFORMANCE MANAGEMENT Manufacturer 1 Perception: Regulation will impact our margins We can then maintain our margins receive change in regulatory policy Reaction: find a lower price supplier
  21. 21. Risk control status of your supply chain ...capture risk information across your supply chain that can impact your business? ...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? ...communicate risk violations to impacted stakeholders? NO out of control ...shape decisions based on current and future risk states? YES YES YES YES YES YES YES In Control Does your company... 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”
  22. 22. Risk Control & Monitoring Risk Identification & Assessment Risk control status of your supply chain Does your company... ...capture risk information across your supply chain that can impact your business? ...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? ...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”
  23. 23. Risk Information BUSINESS PROCESS MANAGEMENT RISK-REWARD DECISIONS STAKEHOLDER COMMUNICATIONS RISK-REWARD PROCESSES YOU Why supply chain risk controls are important to minimize current & future disruptions © Equity Metrics - All Rights Reserved
  24. 24. Risk Information Risk perspective BUSINESS PROCESS MANAGEMENT RISK-REWARD DECISIONS STAKEHOLDER COMMUNICATIONS RISK-REWARD PROCESSES Why supply chain risk controls are important to minimize current & future disruptions RISK-REWARD PROCESSES YOU
  25. 25. Who has experienced supply chain risks in their business? Audience question Why supply chain risk controls are important to minimize current & future disruptions
  26. 26. What types of supply chain risks have you experienced? Audience question Why supply chain risk controls are important to minimize current & future disruptions
  27. 27. What are some challenges you’ve experienced to control those risks? Audience question Why supply chain risk controls are important to minimize current & future disruptions
  28. 28. How could your supply chain risks affect your business? Audience question Why supply chain risk controls are important to minimize current & future disruptions
  29. 29. How to develop a Risk Control & Monitoring Framework For your supply chain
  30. 30. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain attain adaptability REALIZE efficiency ACHIEVE effectiveness !"#$%&'()!'* +,&+**+(&+ Analytics Process Execution Frameworks I%1?' &#07),/,*5 0(.(4%/%&%#1 I%1?J0#)&"%0 .",0#11#1 I%1?JD,091#$ .#,./#'1?%//1
  31. 31. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain I%1?' &#07),/,*5 0(.(4%/%&%#1 Analytics Process Execution Frameworks I%1?J0#)&"%0 .",0#11#1 !-./01234.56 752785%./-88. attain adaptability REALIZE efficiency ACHIEVE effectiveness !"#$%&'()!'* +,&+**+(&+
  32. 32. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain risk analysts decision makers risk monitors business stakeholders business stakeholder communicators Risk-focused people skills risk communicators Supply Chain Risk Control Skills 2 3 risk aggregators1 5 7 6 4
  33. 33. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain Analytics I%1?JD,091#$ .#,./#'1?%//1 !-./0359:;-3 7;235..5. Process Execution Frameworks I%1?' &#07),/,*5 0(.(4%/%&%#1 attain adaptability REALIZE efficiency ACHIEVE effectiveness !"#$%&'()!'* +,&+**+(&+
  34. 34. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain risk aggregation risk analysis risk-based decision-making risk monitoring stakeholder communication Supply Chain Risk Control Processes Risk-centric processes risk communication 2 3 1 4 6 5
  35. 35. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain !-./% :53<9282=> 3?7?@-8-:-5. Analytics I%1?JD,091#$ .#,./#'1?%//1 I%1?J0#)&"%0 .",0#11#1 Process Execution Frameworks attain adaptability REALIZE efficiency ACHIEVE effectiveness !"#$%&'()!'* +,&+**+(&+
  36. 36. How to Develop a Risk Control & Monitoring Framework ForYour Supply Chain Profile supply chain participants Capture risk measures Pre-experience decision implications Monitor changing risks Illustrate stakeholder viewpoints Supply Chain Risk Technology Manage risk scenarios Visualize changing risk conditions Risk technology capabilities 2 3 1 5 7 6 4
  37. 37. Larry Smith & Neil Smith from Thank you for your time.

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