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Supply Chain Risk

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Supply Chain Risk David Josleyn Matt Revelle Forms of Risk Industrial Plant Fires Loss of Intellectual Property Work Slowdowns or Stoppages Natural Disasters Payment ... – PowerPoint PPT presentation

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Title: Supply Chain Risk


1
Supply Chain Risk
  • David Josleyn
  • Matt Revelle

2
Forms of Risk
  • Industrial Plant Fires
  • Loss of Intellectual Property
  • Work Slowdowns or Stoppages
  • Natural Disasters
  • Payment/Credit/Insolvency
  • Geopolitical Issues
  • Demand Changes
  • ETC

3
Recent Events
  • 1995 Kobe Japan Earthquake
  • West Coast Longshoreman Strike
  • Poor Software Implementation
  • Nikes Child Labor Issue
  • Land Rovers Supplier Leverage
  • Hurricane Katrina

Why Important Now???
4
Cost Minimization Approach
  • Supplier Certification
  • Social Responsibility
  • The Role of Ports in USA Trade
  • Third Party Logistics
  • RFID
  • BPO to India
  • The Virtual Chain
  • How Many Suppliers do You Need
  • Creating a Diverse Supply Base

5
Cost Realities
  • Cost Minimization Can Lead to Over-Concentration
    of Resources
  • JIT, Lean Global Dispersion, Single Source
    Suppliers
  • Similar to an Undiversified Portfolio
  • Successful When Status Quo Remains
  • Very Sensitive to Changes or Exceptions

6
Network Dependencies
  • Limited Vertical Integration
  • Slave to Internal Networks
  • Supply Chains ? Supply Networks
  • Linear ? Complex
  • Search for Competitive Advantage has led to More
    Aggressive Business Trends
  • JIT, Customization, Low Cost Advantage
  • Thinking Globally, E-Commerce

7
Fragile Chains/Networks
  • Over-Concentration
  • Amplification of Risk Events Impact
  • Examples
  • Land Rover Chassis
  • Longshoreman Strike
  • Toyota Fire

8
What To Do About Risk
  • Ignore/Acknowledge
  • Mitigate
  • Transfer
  • Accept

9
Consulting Firms
  • 6 Steps to Managing Risk
  • 18 Ways to Guard Against Disruption
  • Core Risks 4 Next Steps
  • Software Solves All
  • Analytical Risk Mitigation

10
Academic Thought
  • Accurate Information/Accessibility
  • Visibility
  • Flexibility (Lean vs. Agile)
  • Contingency Plans
  • Diversify Supply Chain Portfolio
  • Supplier Relationships Are Key

11
Misinterpretation
  • Holding Excessive Inventory
  • Inflated Production Times
  • Parkinsons Law
  • Increasing Delivery Time for Customers
  • Low-Quality Domestic Suppliers

12
Risk Spiral
13
Risk Summary
  • Risk is Everywhere
  • Cost Reduction Increases Risks Probability
  • Reduction of Risk is Relationship Dependant

14
Sources
  • Supply Chain Risk Deal With It - Harvard
    Business School Working Knowledge, April 28, 2003
  • Risk and Reward in Supply Chain Management -
    Harvard Business School Working Knowledge, August
    29, 2005
  • Supply Chain Confidence Martin Christopher and
    Hau L. Lee, November 6, 2001
  • How to Identify and manage Supply Risk (Part 1
    and 2) - www.supplychainplanet.com, (Part
    1)October 2003 (Part 2)November 2003
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