1. CONFIDENTIAL
Supply Chain Risks … Sharing some insights
THE NEW AGE OF PROCUREMENT AND SUPPLY
14 MAY 2014
Partner logo
(cannot be bigger than the MBS logo)
Peter Woon
Vice President, Procurement & Supply Chain
Marina Bay Sands Pte Ltd

2. CONFIDENTIAL
PRESENTATION TAKEAWAYS …
Intro to MBS
New
expectations
from CPO
Supply Chain
Risk
Overview
Supply Chain
Resilience
Study – Key
Findings
Risk
Management
Frameworks
and Industry
examples
Summary

3. CONFIDENTIAL
THE VENETIAN
USA, LAS VEGAS (1999)
THE VENETIAN
MACAO (2007)
MARINA BAY SANDS
SINGAPORE (2010)
LAS VEGAS
BETHLEHEM
MACAO
SINGAPORE
SANDS COTAI CENTRAL
MACAO (OPENING APRIL 2012)
A Global Approach To Doing Business…

4. CONFIDENTIAL
OUR CUSTOMERS
• > 2500 Rooms, Largest
Hotel in Singapore
Hotel
• Mall Mgt., 20 F&B
Establishments
Retail Mall + F&B
• > 600 Tables , 1500 SlotsCasino
• 2 Theatres and a MuseumEntertainment
• 1.3 Million sq. ft. of meeting
space , Asia’s Best MICE
Hotel
MICE
© 2012 Marina Bay Sands PTE LTD

5. CONFIDENTIAL
PRESENTATION TAKEAWAYS …
Intro to MBS
New
expectations
from CPO
Supply Chain
Risk
Overview
Supply Chain
Resilience
Study – Key
Findings
Risk
Management
Frameworks
and Industry
examples
Summary

6. CONFIDENTIAL
Tim Cook, Apple
WHAT DO THESE CEOS HAVE IN COMMON?
Sam Walsh, Rio Tinto Mark Selway, Boral
Their previous role: Chief Procurement Officers
© 2012 Marina Bay Sands PTE LTD

7. CONFIDENTIAL
THE IMPORTANCE OF PROCUREMENT ON THE BOARD LEVEL
© 2012 Marina Bay Sands PTE LTD
Source: Reinecke/Schmidt 2010, www.brw.com.au/p/lists/best_places_to_work/procurement_officers_forge_path_lxPHbMEj84WKm9fYkRTYXJ
1DJ30 & DAX30, 2Forbes 500
28%
70%
98%
0% 20% 40% 60% 80% 100%
Marketing (CMO)
Procurement (CPO)
Finance (CFO)
Positions represented on global companies’ boards
1
1
2

8. CONFIDENTIAL
CHANGING EXPECTATIONS
 CEOs expectation from the Procurement Function
Then
Now
Cost Savings
Risk Management
& Compliance
Innovative
Procurement
Product Dev.
Sustainability

9. CONFIDENTIAL
PRESENTATION TAKEAWAYS …
Intro to MBS
New
expectations
from CPO
Supply Chain
Risk
Overview
Supply Chain
Resilience
Study – Key
Findings
Risk
Management
Frameworks
and Industry
examples
Summary

10. CONFIDENTIAL
“DILBERT’S MANAGEMENT 101 : RISK ANALYSIS”
“DILBERT’S MANAGEMENT 101 : RISK MANAGEMENT” wow

11. CONFIDENTIAL
ENTERPRISE VULNERABILITY – KNOWN RISKS
Loss of Key Personnel
Restriction of Access /
Egress
3PL Failures
Dealer Distribution
Network Failures
Computer Virus / DOS
Attacks
IT System Failures: Hware, Sware,
LAN, WAN Service Provider Failures
Harassment &
Discrimination
Loss of Key Equipt
Tier 1, 2, 3, …n
Supplier Problems
Warranty / Product Recall
Campaigns
Logistics Route
Disruptions
KidnappingExtortion
Vandalism
Arson
HR: Skill Shortage, Turnover
Loss of Key
Supplier
Accounting or Internal
Controls Failures
Embezzlement
Gov’t
Inquiries
Theft
Operator Errors /
Accidental
Damage
Workplace Violence
Health & Safety
Violations
Utilities Failures: Comms, Electricity,
Water, Power
Revenue
Management
Equip., Facilities, Business Acquisitions &
Divestitures
Asset Valuation
Liquidity / Cash
Debt & Credit Rating
Fuel PricesInterest Rate
Fluctuations
Currency & Foreign
Exchange Rate
Fluctuations
Accounting / Tax Law
Changes
Economic
Recession
Currency
Inconvertibility
Credit Default
Uncompetitive Cost
Structure
Financial
Markets
Instability
Inadequate / Inaccurate
Financial Controls &
Reporting
Health Care &
Pension Costs
Shareholder
Activism Adverse
Changes in
Industry
Regulations
Adverse Changes
in Environmental
Regulations
Boiler or Machinery
Explosion
Property Damage
Bldg. or Equip Fire
Building Collapse
Asbestos Exposure
Mold Exposure
Cargo Losses
Land, Water,
Atmospheric
Pollution
Geopolitical Risks
Severe Hot /
Cold Weather
Disease / Epidemic
Animal / Insect Infestation
Blizzard / Ice Storms
Hail Damage
Lightning
Strikes
Earthquake
Flooding
Wildfire
Hurricane /
Typhoon
Heavy Rain /
Thunderstorms
Tsunami
Volcano Eruption
Wind Damage
3rd Party LiabilityGeneral Liability Product
Liability
Directors & Officers
Liability
Workers
Compensation
Deductible
Limits
Terrorism / Sabotage
Tornados
Loss of Key
Facility
Customer
Relations
Corporate
Culture
Cost Overruns
“Gotta-have”
products
Attacks on Brand Loyalty
Public Boycott
& Condemnation
New or Foreign
Competitors
Market Share
Battles
Joint Venture /
Alliance Relations
Price Wars
Ineffective
Planning
Union Relations, Labor
Actions
Demand Seasonality &
Variability
M&A Industry
Consolidation
Perceived Quality
Inadequate Mgt
Oversight
Negative Media
Coverage
Product Design & Engineering
NPI
Dealer Relations
Technology Decisions
Product Dev Process
Supplier Relations
Foreign Market Protectionism
Ethics
Violations
Offensive
Advertising
Loss of Intell
Property
Enterprise
Vulnerability
Financial Risk
Hazard
Risk
Strategic
Risk
Operations
Risk
IT System Failures
(Hardware, Software, LAN, WAN)
Harassment &
Discrimination
Warranty / Product Recall
Campaigns
Extortion
Info. Mgmt. Problems
Loss of
Key
Supplier
Accounting or Internal
Controls Failures
Fuel Prices
Interest Rate
Fluctuations
Accounting / Tax
Law Changes
Economic
Recession
Credit Default
Uncompetitive Cost
Structure
Adverse
Changes in
Industry
Regulations
Property Damage
Bldg. or Equip. Fire
Mold Exposure
Cargo Losses
Earthquake
Flooding
Wind Damage
Deductible
Limits
Customer Relations
Pricing & Incentive Wars
Customer Demand Seasonality
& Variability
Mergers & Industry
Consolidation
Product Design & Engineering
Dealer Relations
Technology Decisions
Product Development Process
Foreign Market
Protectionism
Ethics
Violations
Loss of Intel.
Property
Fuel Prices
Economic
Recession Health Care
Costs
Bldg Fire
Credit
Default
Liquidity/Cash
Facility
Loss
Product
Liability
Cargo
Losses
Earthquake
Wildfire
Epidemic Tornados
Ice Storm
Tax Law
Changes
Theft
Utility
failure
Key
Supplier
Loss
Logistics
Route
Failure
IT Failure
Personnel
Loss
Health & Safety
Violations
Workplace Violence
Denial of Service Attack
New Competition
Negative
Media
M&A/Industry
Consolidation
Foreign Mkt
Protectionism
Labor RelationsPerceived Quality
Technology
Choices
Mkt Share
Battles
Ethics Violation
Loss of IP
Interest Rate
Fluctuations
Ref: Dr. Debra Elkins, General Motors

12. CONFIDENTIAL
1. Risk Identification
2 2. Determine
Risk
Exposure
3. Prioritize
Risks
4. Risk Reduction
5. Risk
Acceptance
6. Risk
Review and
Monitoring
Supplier Risk Framework .. Formal approach
© 2012 Marina Bay Sands PTE LTD
Risk Triggers
•Economic
Meltdown
•Regulatory
Changes
Risk Classes
Financial
(Material)
Business Impact
•Supplier
bankruptcy
leading to
Disruption to
Operations and
sales
Risk Triggers
•Supplier
Bankruptcy
•Political Instability
•Legal Issues
•Environmental
Hazard
Risk Triggers
•Supplier non-
compliance
•Operational
Breakdown
Reputational
(Qualitative)
Business Impact
•Supply out of
Stock
• Operations
breakdown
Business Impact
•Dilution of Brand
•Indirect Impact on
sales
Operational
(Material)
Risk
Assessment
Tools
Business
Impact
Assessment
tool
Prioritization
Matrix &
Risk register
RACI control
Matrix
Risk
Committee
Protocol
RACI Review
Process

13. CONFIDENTIAL
SUPPLY CHAIN DISRUPTIONS ARE COSTLY
Japan
earthquake
Thailand
Floods

14. CONFIDENTIAL
SUPPLY CHAIN DESIGN CASE : NOKIA VS ERICSSON
Problem:
– March 2000, two companies – Nokia
and Ericsson – sole source supply of
Radio Frequency Chips (RFCs) used
in mobile phones from same
supplier, Philips Electronics in New
Mexico
– Philips experienced a 10-minute fire
in their New Mexico plant that
resulted from a lightning strike; fire
was in clean room and while the fire
was limited the damage was not –
production capacity was lost and
ability produce chips lost; Not
enough chips to satisfy the demand
– Philips did not tell suppliers, when
asked described it as 10 min fire
– Both companies heavily dependent
on RFCs, and Nokia launching new
phones dependent upon the RFCs in
question.
Action:
– Nokia early warning system indicated
drop in receipts below target level; this
alerted them to double-check with
Philips about impact of the ‘10-min
fire’
– Nokia also had multiple points of
contact, was able to identify the real
impact of the fire – all inventory lost!
– Nokia sprang into action:
– Bad news travels fast
– Cross-model tradeoffs, Chip re-
design
– Nokia & Philips to “co-create
strategy”
– Philips resources stretched to
add RFC capacity
Result
– Ericsson estimated $250M+ loss, Nokia gains mkt
share
– Ericsson exits the mobile phone production business

15. CONFIDENTIAL
PRESENTATION TAKEAWAYS …
Intro to MBS
New
expectations
from CPO
Supply Chain
Risk
Overview
Supply Chain
Resilience
Study – Key
Findings
Risk
Management
Frameworks
and Industry
examples
Summary

16. CONFIDENTIAL
Image here
(Do not overlay image over the bottom MBS template bar)
Data obtained in the last five editions of the Supply Chain
Resilience survey.
This report seeks to answer recurring questions from each
of the five surveys:
– What are the causes of supply chain
disruption?
– Where does supply chain disruption originate?
– What are the consequences of supply chain
disruption?
– Do organisations have business continuity (BC)
arrangements to deal with supply chain
disruption? If so, what are these?
Over 2,100 responses have been collected in this survey
over five years, making it one of the most
comprehensive studies of supply chain risk available.
A summary follows below (Table 1).
SUPPLY CHAIN RESILIENCE STUDY (2009 – 2013 SURVEYS)
** Source : BCI Report by Patrick Alcantara @ BCI

17. CONFIDENTIAL
KEY FINDINGS #1 : FREQUENCY OF DISRUPTIONS
• Whilst 64.4% of organisations record
disruptions in their supply chains in 2013, a
5.6% increase since 20105, many still fail to
coordinate on a firm-wide basis.
• Worse, on average, more than one-third of
organisations do not track incidents at all
(Figure 1)
** Source : BCI Report by Patrick Alcantara @ BCI
• 78.6% of organisations report experiencing at least one
incident involving their supply chains in a given year.
However, 68.2% do not have full visibility of their
supply chain disruption levels due to a lack of firm-wide
reporting. (Figure 2)

18. CONFIDENTIAL
KEY FINDINGS #2 : ORIGIN OF DISRUPTIONS
• 60% of organisations report experiencing disruptions occurring at Tier 1 of
their supply chains. Meanwhile, a growing number (10% in 2013) report
disruptions at Tier 3 or lower.
** Source : BCI Report by Patrick Alcantara @ BCI

19. CONFIDENTIAL
KEY FINDINGS #3 : TOP 3 CAUSES OF DISRUPTION
• Unplanned IT and telecom outages, as well as adverse weather,
outsourcer service failure continue to be the top sources of supply chain
disruption for the last five years.
** Source : BCI Report by Patrick Alcantara @ BCI

20. CONFIDENTIAL
KEY FINDINGS #4 : CONSEQUENCE OF DISRUPTION
• Loss of productivity (52.0%), the increased cost of working (38.7%) and
impaired service outcomes (34.4%) are the top ranked consequences of
supply chain disruption on average.
** Source : BCI Report by Patrick Alcantara @ BCI
• However, a growing concern over reputational damage is noticed in the
data (20.8%)

21. CONFIDENTIAL
KEY FINDINGS #5 : ECONOMIC IMPACTS OF DISRUPTION
• Whilst 87% of organisations
on average report losses of
less than €1 million
annually due to supply
chain disruptions, 2%
recount losses of more than
€50 million in a given year.
• Nonetheless, around 4% of
organisations report losses
of more than €11 million
due to incidents involving
their supply chain in a given
year.
** Source : BCI Report by Patrick Alcantara @ BCI

22. CONFIDENTIAL
KEY FINDINGS #6 : SUPPLY CHAIN BUSINESS CONTINUITY RESULTS
• On the complexity of global supply
chains, with more than half of
organisations on average reporting
having >21 key suppliers (51.6%).
• 9.3% of organisations surveyed had
>100 key suppliers, whilst almost 5% of
organisations surveyed had greater than
1,000.
** Source : BCI Report by Patrick Alcantara @ BCI
• Only 8.1% of organisations on average
report that they know of all of their suppliers’
BC arrangements (Figure 9).
• Almost a quarter of organisations know less
than 25% of their suppliers’ BC
arrangements, making it a significant blind
spot for operations, and opening them to
risk.

23. CONFIDENTIAL
KEY FINDINGS # 7 : SUPPLIER BUSINESS CONTINUITY INFO
• A growing number of respondents have reported looking at evidence of alignment to
a recognised standard (ie. ISO 22301) as a marker for supplier BC programmes.
39% of respondents indicated asking for this evidence in 2013 alone.
• Respondents, on average, report checking a supplier’s BCM programme (37.2%),
its appropriateness (35.6%) and it relevance (35.4%) to their firm’s needs (Figure
10).
• These findings demonstrate the growing awareness about supply chain risks and
the benefits of having a supplier BC programme in place
** Source : BCI Report by Patrick Alcantara @ BCI

24. CONFIDENTIAL
PRESENTATION TAKEAWAYS …
Intro to MBS
New
expectations
from CPO
Supply Chain
Risk
Overview
Supply Chain
Resilience
Study – Key
Findings
Risk
Management
Frameworks
and Industry
examples
Summary

25. CONFIDENTIAL
EXAMPLE OF A SUPPLY CHAIN SOCIAL COMPLIANCE
Challenges and Requirements
• Increasing complexity around managing its global supply chain
• Streamline social compliance management processes and supplier
audits across their extended global enterprise
Benefits Realized
• Supply chain Social Compliance solution improves visibility into the full
gamut of their compliance initiatives
• Supplier/Licensee qualification, annual re-qualification, contract
management, maintain registration information and third party
auditsEnsures ethical sourcing and compliance with rules, regulations,
and standards
One of the Leading Retail Chains
• Social Compliance Solution across supply chain to help manage socially
responsible product sourcing
• Integrated approach to automate and manage supplier information, policies,
audits, corrective action and remediation and supplier partner certification

26. CONFIDENTIAL
One of the World’s Largest Financial Institution
• Global roll-out of risk-based Supplier Audit solution across all business units &
functions
• Integrates vendor audit planning, execution and reporting across global operations
• Improve collaboration and deliver significant cost savings for the audit group
One of the World’s Largest social networking site
• Comprehensive supplier risk, compliance and policy management solution
• IT risk assessments, streamlined compliance requirements, automated control testing,
security data integration
SELECTED CASE STUDIES USING SUPPLIER RISK
MANAGEMENT AUDIT PROGRAMS
Upstream Oil & Gas company
• Supplier risk and audit mgmt: At source inspections/audits of equipment for
construction projects
• Compliance with NEB –National Energy Board (Planned) Canadian regulatory agency

27. CONFIDENTIAL
SUPPLY CHAIN RISK MANAGEMENT PROGRAM
TYPICAL VS “BEST IN CLASS”

28. CONFIDENTIAL
ISO 22301 IS THE SPECIFICATION DOCUMENT FOR THE NEWLY
PUBLISHED INTERNATIONAL STANDARD ON SOCIETAL
SECURITY – BUSINESS CONTINUITY MANAGEMENT SYSTEMS

29. CONFIDENTIAL
RISK MANAGEMENT FRAMEWORK & ISO 31000
ESTABLISH THE CONTEXT
RISK IDENTIFICATION
RISK ANALYSIS
RISK EVALUATION
RISK TREATMENT
COMMUNICATIONANDCONSULTATION
MONITORINGANDREVIEW
ISO 31000:2009
Risk Management – Principles and Guidelines
1. Vulnerability
assessment
2. Mitigation
planning &
implementation
3. Ongoing
Monitoring &
Measurement
4. Crisis
Management
5. Emergency
Response
SCRLC, 2011SCRLC, 2011

30. CONFIDENTIAL
PRESENTATION TAKEAWAYS …
Intro to MBS
New
expectations
from CPO
Supply Chain
Risk
Overview
Supply Chain
Resilience
Study – Key
Findings
Risk
Management
Frameworks
and Industry
examples
Summary

31. CONFIDENTIAL
REFERENCES :
• 5th Annual Survey, Supply Chain Resilience 2013
– An international survey to consider the origin, causes and
consequences of supply chain disruption
– Published November 2013
• Business Continuity Institute “SUPPLY CHAIN RESILIENCE TRENDS
2009-2013 SURVEYS”, Patrick Alcantara is a Research Associate for the
Business Continuity Institute (BCI

32. CONFIDENTIAL
Thank You …
Questions?
Peter Woon
Marina Bay Sands Pte Ltd
Peter.woon@marinabaysands.com
© 2012 Marina Bay Sands PTE LTD