The document provides guidelines for setting up a successful supply chain risk management process. It outlines key ingredients including defining the scope of relevant supply chains, creating a risk inventory with supplier, location and country risks, increasing supply chain visibility beyond tier 1 suppliers, identifying risks through automated data collection from expert databases, and integrating risk management into procurement processes. The goal is to help companies establish a professional risk management process to avoid delays and costs.
The document provides an introduction to supply chain risk management. It defines key terms like supply chain management, risk, and supply chain risk management. It discusses how SCM has grown in modeling supply chain networks and coordinating material, information and money flows. Risks in supply chains can arise from operational fluctuations, natural disasters, and man-made crises. Effective SCRM is important for firms to manage risks. The document also summarizes literature on general SCRM frameworks, defining risks, and identifying common types of supply chain risks like supply, production and demand risks.
The document discusses supply chain management (SCM). It defines SCM as the management of relationships between suppliers, manufacturers, warehouses, distribution centers, and customers to deliver value to customers at a low cost. The goal of SCM is to optimize efficiency through integrating these entities. The document also describes how SCM has evolved from a "push" model driven by forecasts to a "pull" model driven by actual customer demand.
Supply chain management involves coordinating the flow of materials, information, and finances between suppliers, manufacturers, warehouses, distribution centers, retailers, and consumers. It aims to reduce costs and inventory while meeting customer needs. Key aspects of supply chain management include demand planning, supplier relationships, transportation, facilities, information sharing, and performance measurement. Effective supply chain management requires integrating these functions both within and across companies.
The document discusses supply chain management and logistics. It defines key terms like supply chain management, logistics, and the differences between the two. It also outlines the major activities in the logistics cycle including forecasting, procurement, inventory management, and key forms and records used like stock control cards and daily activity registers. Ordering processes, receiving, storage conditions and key performance indicators are also summarized.
Supply chain risk management (SCRM) is "the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity".
SCRM attempts to reduce supply chain vulnerability via a coordinated holistic approach, involving all supply chain stakeholders, which identifies and analyses the risk of failure points within the supply chain. Mitigation plans to manage these risks can involve logistics, finance and risk management disciplines; the ultimate goal being to ensure supply chain continuity in the event of a scenario which otherwise have interrupted normal business and thereby profitability.
This document provides an overview of supply chain management concepts. It defines key terms like logistics and supply chain management. It then discusses various components of a supply chain like facilities, inventory, transportation, and information and how decisions around these components can impact efficiency and responsiveness. The document also examines sourcing, pricing and supply chain collaboration strategies and how they relate to the competitive strategy.
This white paper discuss on building a supply chain beyond risks factors surrounding organization operations. Companies today work on several supply chain strategies to improve their supply chain.
Risk factors in as-is process and how to eliminate those risks.
The document provides an introduction to supply chain risk management. It defines key terms like supply chain management, risk, and supply chain risk management. It discusses how SCM has grown in modeling supply chain networks and coordinating material, information and money flows. Risks in supply chains can arise from operational fluctuations, natural disasters, and man-made crises. Effective SCRM is important for firms to manage risks. The document also summarizes literature on general SCRM frameworks, defining risks, and identifying common types of supply chain risks like supply, production and demand risks.
The document discusses supply chain management (SCM). It defines SCM as the management of relationships between suppliers, manufacturers, warehouses, distribution centers, and customers to deliver value to customers at a low cost. The goal of SCM is to optimize efficiency through integrating these entities. The document also describes how SCM has evolved from a "push" model driven by forecasts to a "pull" model driven by actual customer demand.
Supply chain management involves coordinating the flow of materials, information, and finances between suppliers, manufacturers, warehouses, distribution centers, retailers, and consumers. It aims to reduce costs and inventory while meeting customer needs. Key aspects of supply chain management include demand planning, supplier relationships, transportation, facilities, information sharing, and performance measurement. Effective supply chain management requires integrating these functions both within and across companies.
The document discusses supply chain management and logistics. It defines key terms like supply chain management, logistics, and the differences between the two. It also outlines the major activities in the logistics cycle including forecasting, procurement, inventory management, and key forms and records used like stock control cards and daily activity registers. Ordering processes, receiving, storage conditions and key performance indicators are also summarized.
Supply chain risk management (SCRM) is "the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity".
SCRM attempts to reduce supply chain vulnerability via a coordinated holistic approach, involving all supply chain stakeholders, which identifies and analyses the risk of failure points within the supply chain. Mitigation plans to manage these risks can involve logistics, finance and risk management disciplines; the ultimate goal being to ensure supply chain continuity in the event of a scenario which otherwise have interrupted normal business and thereby profitability.
This document provides an overview of supply chain management concepts. It defines key terms like logistics and supply chain management. It then discusses various components of a supply chain like facilities, inventory, transportation, and information and how decisions around these components can impact efficiency and responsiveness. The document also examines sourcing, pricing and supply chain collaboration strategies and how they relate to the competitive strategy.
This white paper discuss on building a supply chain beyond risks factors surrounding organization operations. Companies today work on several supply chain strategies to improve their supply chain.
Risk factors in as-is process and how to eliminate those risks.
In this, we will read about the Supply Chain Management in Healthcare
The following contents will be described briefly:-
1. What is a supply chain?
2. The process of Views of Supply Chain
3. Objectives of Supply Chain Management
4. Supply Chain Decisions
5. Benefits of Supply Chain
6. Integrated Health Supply Chains
7. New Trends In Healthcare Supply Chain
8. Potential Risks to an Organization and Supply Chain
9. Strategies to Improve Healthcare Supply Chain Management
Sourcing involves purchasing goods and services and deciding whether to outsource supply chain functions. Key considerations for outsourcing include whether it will increase supply chain surplus, how much surplus the firm will capture, and potential risks. Supplier performance is evaluated based on multiple factors like price, quality, and timeliness that affect total costs. Effective sourcing decisions use supplier scoring, contracting, auctions or negotiations to improve supply chain profits through strategies like design collaboration, risk sharing, and performance incentives.
Preventing and Managing Supply Chain DisruptionsThomas Tanel
Supply chains worldwide have been battling various risks and challenges for some time. Each challenge not only threatens to disrupt operations, but also may have a negative financial impact on business performance and prevent an organization from meeting the demands from stakeholders, customers, shareholders, and regulators.
Supply Chain Council members have reported that less than half of enterprises have established metrics and procedures for assessing and managing supply risks and organizations lack sufficient market intelligence, process, and information systems to effectively predict and mitigate supply chain risks. Does this sound like your organization?
f so, supply chain disruptions can be extremely costly. A disruption in your supply chain can cost millions of dollars in lost time, energy and resources. Their effects are both direct (e.g. halting production altogether) and indirect (e.g. on stock values). Taking steps to help reduce supply chain disruption is the only way to avoid these costs.
Proactive discovery and visibility of risks is the key to the prevention and management of supply chain disruptions.
The document discusses key topics related to managing supply chains, including definitions, trends, best practices, and risks. It provides definitions of supply chain management and logistics management. It outlines trends changing supply chains such as globalization, technology advances, and sustainability issues. Leading practices discussed include focusing on cash flow, visibility, and strategic supplier/customer relationships. Risks covered involve disruptions, regulatory changes, and factors within and outside a company's control.
This is procurement strategy article for purchasing professionals
Deep dive in the strategic approach in the business function of purchase.and sourcing activities.
Material management plays an important role in logistics and supply chain management. It includes functions like purchasing, storage, distribution, and inventory control. These functions help ensure efficient material flow and minimize costs. As business concepts have evolved from distribution to integrated logistics to supply chain management, the focus is now on coordination across organizations to create customer value. Outsourcing, mergers and acquisitions are also important new trends that impact modern business operations and the role of material management.
Supply chain management INVENTORY MANAGEMENT IN A SUPPLY CHAIN Osama Yousaf
This document discusses inventory management in a supply chain. It defines inventory as physical resources held in stock for sale or transformation. Inventory systems determine appropriate inventory levels and replenishment policies. Inventory is held at various stages of production and distribution including raw materials, work-in-process, and finished goods. Maintaining inventory incurs carrying costs to store items, ordering costs to replenish stock, and shortage costs if demand cannot be met. The document examines factors that influence inventory decisions like safety stock and seasonal fluctuations, and how to balance responsiveness to customers with supply chain efficiency.
Supply chain management is an effective tool for business process improvement so every business student must have a basic knowledge of SCM & process of SCM.
This document provides information about a healthcare supply chain conference taking place in Dubai in April 2014. The two-day conference will bring together healthcare regulators, providers, distributors, and manufacturers to discuss strategies for developing robust and strategic healthcare supply chains.
The conference will feature keynote speeches from leaders in the UAE Ministry of Health and hospital supply chain management. Participants can attend panels on designing resilient supply chain networks, regulatory developments, and managing relationships with suppliers and internal stakeholders. Interactive sessions will address topics like demand planning, eliminating inefficiencies, and developing effective inventory management. The goal is to help attendees implement transformational supply chain models that improve patient outcomes and care.
This document discusses concepts related to supply chain management and logistics. It defines supply chain management as coordinating all activities from suppliers to customers to efficiently integrate functions. The value chain is described as primary and support activities that create value. Logistics focuses on optimizing flows within an organization while supply chain management seeks coordination between entities in the value chain. Issues in logistics and supply chain management include diversified products, short order cycles, and inventory control.
The document discusses Pfizer Philippines' supply chain strategy for its Prevnar vaccine. Prevnar is distributed through a cold chain from the UK manufacturer to Pfizer Philippines' warehouse and then to doctors. Forward buying and managing the bullwhip effect are challenges. Hau Lee's framework examines aligning supply chains with uncertainties in demand or supply. Outsourcing can allow companies to focus on core competencies but requires coordination. Global sourcing benefits include lower costs but has risks. Mass customization and purchasing systems are also discussed.
The document is a group presentation on supply chain vulnerability. It discusses various causes of supply chain vulnerability including risks within the supply chain from lack of visibility and inaccurate forecasts as well as external risks from natural disasters, terrorism, and industrial action. Specific factors are also examined like globalized supply chains, outsourcing, and reduction in the supplier base. The presentation concludes by outlining approaches to supply chain risk management including identifying risks, analyzing their potential impact, and designing appropriate responses to reduce prevention and mitigate consequences.
the various factors that expose a global supply chain to risk. also known as the vulnerability of global supply chains to risks. case study's from KFC, YAHOO, APPLE, INTEL, NIKE companies to learn how this affected them.
This document discusses the importance of supply chain resilience and risk management. It begins by outlining increasing supply chain risks due to factors like globalization and technology changes. It then discusses how to identify supply chain risks through understanding supply chain relationships and mapping processes. Key steps involve assessing risk impacts on performance and priorities. Finally, it covers creating emergency response plans to enable continuity during disruptions and recovery of normal operations. The overall message is that proactive risk management should be integrated in supply chain strategies.
Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Healthcare logistics for service improvement and a new understanding of patient flow. Presented by Delia Dent, CSC, at HINZ 2014, 11 November 2014, 11.37am, Marlborough Room
1. Material management involves planning and controlling the flow of materials from purchase to distribution.
2. The objectives of material management include obtaining the right quality and quantity of materials at the right time and place for the lowest cost.
3. Material management functions include planning, purchasing, inventory control, storage, and transportation.
A presentation on the Supply Chain Management as per Production and Marketing are concerns, the highly relayed branch of any business house is to concentrate on this particular topic.
Material management involves planning, organizing, and controlling the flow of materials from initial purchase through use. It aims to obtain materials of the right quality, quantity, time, place, and cost. Key aspects include demand estimation, procurement, storage, inventory control methods like ABC and VED analysis, maintenance and repair of equipment, and disposal of condemned materials. Effective material management is crucial for providing necessary supplies to healthcare workers and delivering quality services to patients.
This document discusses material management in healthcare organizations. It defines material management as planning, organizing, and controlling the acquisition, storage, and distribution of materials needed by healthcare personnel. The key functions of material management are planning and sourcing, budgeting, research, procurement, receiving, storage, accounting and control, issuing, disposal, and maintenance. Effective material management aims to obtain the right materials in the right quantity, quality, time, and place while reducing costs and avoiding stockouts. Principles like POSDCORB guide material planning and procurement processes.
Supply Chain Risk Management - made easy!Heiko Schwarz
Pressure in terms of innovations and costs as a result of the globalization of markets and services are forcing companies to focus more strongly on international procurement. This globalization, combined with a fall in added value leads to a new, complex risk structure, which necessitates continuous monitoring of various risk potentials along all supply chains.
The Supply Risk Network from riskmethods has been developed to address precisely
these challenges.
In this, we will read about the Supply Chain Management in Healthcare
The following contents will be described briefly:-
1. What is a supply chain?
2. The process of Views of Supply Chain
3. Objectives of Supply Chain Management
4. Supply Chain Decisions
5. Benefits of Supply Chain
6. Integrated Health Supply Chains
7. New Trends In Healthcare Supply Chain
8. Potential Risks to an Organization and Supply Chain
9. Strategies to Improve Healthcare Supply Chain Management
Sourcing involves purchasing goods and services and deciding whether to outsource supply chain functions. Key considerations for outsourcing include whether it will increase supply chain surplus, how much surplus the firm will capture, and potential risks. Supplier performance is evaluated based on multiple factors like price, quality, and timeliness that affect total costs. Effective sourcing decisions use supplier scoring, contracting, auctions or negotiations to improve supply chain profits through strategies like design collaboration, risk sharing, and performance incentives.
Preventing and Managing Supply Chain DisruptionsThomas Tanel
Supply chains worldwide have been battling various risks and challenges for some time. Each challenge not only threatens to disrupt operations, but also may have a negative financial impact on business performance and prevent an organization from meeting the demands from stakeholders, customers, shareholders, and regulators.
Supply Chain Council members have reported that less than half of enterprises have established metrics and procedures for assessing and managing supply risks and organizations lack sufficient market intelligence, process, and information systems to effectively predict and mitigate supply chain risks. Does this sound like your organization?
f so, supply chain disruptions can be extremely costly. A disruption in your supply chain can cost millions of dollars in lost time, energy and resources. Their effects are both direct (e.g. halting production altogether) and indirect (e.g. on stock values). Taking steps to help reduce supply chain disruption is the only way to avoid these costs.
Proactive discovery and visibility of risks is the key to the prevention and management of supply chain disruptions.
The document discusses key topics related to managing supply chains, including definitions, trends, best practices, and risks. It provides definitions of supply chain management and logistics management. It outlines trends changing supply chains such as globalization, technology advances, and sustainability issues. Leading practices discussed include focusing on cash flow, visibility, and strategic supplier/customer relationships. Risks covered involve disruptions, regulatory changes, and factors within and outside a company's control.
This is procurement strategy article for purchasing professionals
Deep dive in the strategic approach in the business function of purchase.and sourcing activities.
Material management plays an important role in logistics and supply chain management. It includes functions like purchasing, storage, distribution, and inventory control. These functions help ensure efficient material flow and minimize costs. As business concepts have evolved from distribution to integrated logistics to supply chain management, the focus is now on coordination across organizations to create customer value. Outsourcing, mergers and acquisitions are also important new trends that impact modern business operations and the role of material management.
Supply chain management INVENTORY MANAGEMENT IN A SUPPLY CHAIN Osama Yousaf
This document discusses inventory management in a supply chain. It defines inventory as physical resources held in stock for sale or transformation. Inventory systems determine appropriate inventory levels and replenishment policies. Inventory is held at various stages of production and distribution including raw materials, work-in-process, and finished goods. Maintaining inventory incurs carrying costs to store items, ordering costs to replenish stock, and shortage costs if demand cannot be met. The document examines factors that influence inventory decisions like safety stock and seasonal fluctuations, and how to balance responsiveness to customers with supply chain efficiency.
Supply chain management is an effective tool for business process improvement so every business student must have a basic knowledge of SCM & process of SCM.
This document provides information about a healthcare supply chain conference taking place in Dubai in April 2014. The two-day conference will bring together healthcare regulators, providers, distributors, and manufacturers to discuss strategies for developing robust and strategic healthcare supply chains.
The conference will feature keynote speeches from leaders in the UAE Ministry of Health and hospital supply chain management. Participants can attend panels on designing resilient supply chain networks, regulatory developments, and managing relationships with suppliers and internal stakeholders. Interactive sessions will address topics like demand planning, eliminating inefficiencies, and developing effective inventory management. The goal is to help attendees implement transformational supply chain models that improve patient outcomes and care.
This document discusses concepts related to supply chain management and logistics. It defines supply chain management as coordinating all activities from suppliers to customers to efficiently integrate functions. The value chain is described as primary and support activities that create value. Logistics focuses on optimizing flows within an organization while supply chain management seeks coordination between entities in the value chain. Issues in logistics and supply chain management include diversified products, short order cycles, and inventory control.
The document discusses Pfizer Philippines' supply chain strategy for its Prevnar vaccine. Prevnar is distributed through a cold chain from the UK manufacturer to Pfizer Philippines' warehouse and then to doctors. Forward buying and managing the bullwhip effect are challenges. Hau Lee's framework examines aligning supply chains with uncertainties in demand or supply. Outsourcing can allow companies to focus on core competencies but requires coordination. Global sourcing benefits include lower costs but has risks. Mass customization and purchasing systems are also discussed.
The document is a group presentation on supply chain vulnerability. It discusses various causes of supply chain vulnerability including risks within the supply chain from lack of visibility and inaccurate forecasts as well as external risks from natural disasters, terrorism, and industrial action. Specific factors are also examined like globalized supply chains, outsourcing, and reduction in the supplier base. The presentation concludes by outlining approaches to supply chain risk management including identifying risks, analyzing their potential impact, and designing appropriate responses to reduce prevention and mitigate consequences.
the various factors that expose a global supply chain to risk. also known as the vulnerability of global supply chains to risks. case study's from KFC, YAHOO, APPLE, INTEL, NIKE companies to learn how this affected them.
This document discusses the importance of supply chain resilience and risk management. It begins by outlining increasing supply chain risks due to factors like globalization and technology changes. It then discusses how to identify supply chain risks through understanding supply chain relationships and mapping processes. Key steps involve assessing risk impacts on performance and priorities. Finally, it covers creating emergency response plans to enable continuity during disruptions and recovery of normal operations. The overall message is that proactive risk management should be integrated in supply chain strategies.
Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Healthcare logistics for service improvement and a new understanding of patient flow. Presented by Delia Dent, CSC, at HINZ 2014, 11 November 2014, 11.37am, Marlborough Room
1. Material management involves planning and controlling the flow of materials from purchase to distribution.
2. The objectives of material management include obtaining the right quality and quantity of materials at the right time and place for the lowest cost.
3. Material management functions include planning, purchasing, inventory control, storage, and transportation.
A presentation on the Supply Chain Management as per Production and Marketing are concerns, the highly relayed branch of any business house is to concentrate on this particular topic.
Material management involves planning, organizing, and controlling the flow of materials from initial purchase through use. It aims to obtain materials of the right quality, quantity, time, place, and cost. Key aspects include demand estimation, procurement, storage, inventory control methods like ABC and VED analysis, maintenance and repair of equipment, and disposal of condemned materials. Effective material management is crucial for providing necessary supplies to healthcare workers and delivering quality services to patients.
This document discusses material management in healthcare organizations. It defines material management as planning, organizing, and controlling the acquisition, storage, and distribution of materials needed by healthcare personnel. The key functions of material management are planning and sourcing, budgeting, research, procurement, receiving, storage, accounting and control, issuing, disposal, and maintenance. Effective material management aims to obtain the right materials in the right quantity, quality, time, and place while reducing costs and avoiding stockouts. Principles like POSDCORB guide material planning and procurement processes.
Supply Chain Risk Management - made easy!Heiko Schwarz
Pressure in terms of innovations and costs as a result of the globalization of markets and services are forcing companies to focus more strongly on international procurement. This globalization, combined with a fall in added value leads to a new, complex risk structure, which necessitates continuous monitoring of various risk potentials along all supply chains.
The Supply Risk Network from riskmethods has been developed to address precisely
these challenges.
Kardex not only aims to exploit new opportunities in the context of professionalizing and internationalizing procurement, but at the same time also to cushion associated risks. As a result, supply chain risk management has gained great importance in procurement.
How AGCO implemented an Supply Chain Risk management solution to save millionsHeiko Schwarz
1) AGCO, a global manufacturer of agricultural machinery, implemented a supply chain risk management (SCRM) solution from riskmethods to address risks from their global supply base.
2) Their previous fragmented approach led to inefficiencies when disruptions occurred, so they centralized procurement and appointed a risk manager.
3) The riskmethods solution provided automated risk monitoring and visibility across AGCO's top 250 suppliers.
4) AGCO estimated millions in cost savings from avoided disruptions, improved sourcing decisions, and automation of manual risk processes.
Study ROI of Supply Chain Risk Management (riskmethods Nov 2014)Heiko Schwarz
“ROI of Supply Chain Risk Management” The study provides detailed information on which individual potentials - that can be evaluated in monetary terms - provide the source for calculating ROI of SCRM. Learn more download the brand new study about SCRM!
“Ensuring profitability through transparent supply chains”Heiko Schwarz
Challenge
Hottinger Baldwin Messtechnik (HBM) was faced with the challenge of creating transparency along global supply chains to minimize risks in its supply chain, secure production and ensure profitability. With this in mind, HBM came up with three questions that would be relevant for creating an all-inclusive concept for successful supply chain risk management:
What risk is associated with every single supplier?
How does each supplier influence the profitability?
How can transparency be created so as to prevent crippling of the entire production due to default by a supplier that works with penny articles?
SOLUTION
An all-inclusive approach enables HBM to monitor its key suppliers. „All-inclusive“: first because HBM monitors suppliers, locations, countries and hubs for all types of risks (natural disasters, strikes, compliance breaches, etc.) by way of riskmethods‘ Supply Risk Network. And „all-inclusive“: second because HBM can map its extensive risk management process cycle in the Supply Risk Network. Risks are monitored along the entire supply chain and the impact is determined using an evaluation matrix so that, in a risk event, transparency on the ramifications is immediately available. This allows for professional action planning in order to quickly activate appropriate risk mitigation measures and activities in an emergency.
BENEFITS
The riskmethods Supply Risk Network can be activated using a sequence of simple manual actions, and offers HBM a cloud-based software solution with daily, up-to-date data on all risks for all suppliers, production sites and countries. This has proved to be a profitable advantage, especially to medium-sized companies that have integrated the Supply Risk Network into their organization. Ongoing risk monitoring, an early warning system, impact evaluation and action planning ensure that risks are more easily recognized and the extent of damage minimized. In this way, HBM ensures its profitability and increases its competitive advantage.
This document discusses supply chain management. It defines supply chain management as coordinating the flow of materials, information, and finances from suppliers to manufacturers to distributors to retailers to consumers. The goal is to reduce inventory while keeping products available. There are three main flows in a supply chain: product flow, information flow, and financial flow. The document also discusses key drivers, issues, and challenges in supply chain management like strategic partnerships, information sharing, and defining customer value.
A supply chain is the network of organizations involved in producing and delivering a product, from raw materials to the end customer. It includes upstream suppliers, internal production and packaging, and downstream distribution centers and retailers. Effective supply chain management coordinates activities across this network to optimize material, information and financial flows. Key goals are reducing costs and uncertainties while improving customer service. Modern supply chains leverage information technology to facilitate coordination and information sharing among partners.
This complete deck covers various topics and highlights important concepts. It has PPT slides which cater to your business needs. This complete deck presentation emphasizes Procurement Risk Management PowerPoint Presentation Slides and has templates with professional background images and relevant content. This deck consists of total of thirty seven slides. Our designers have created customizable templates, keeping your convenience in mind. You can edit the colour, text and font size with ease. Not just this, you can also add or delete the content if needed. Get access to this fully editable complete presentation by clicking the download button below. http://bit.ly/2uCY6i5
Effective procurement risk management is critical for businesses to ensure that they are not exposed to unnecessary risks that can negatively impact their bottom line. Procurement risks can arise from various sources, such as supplier non-performance, quality issues, and price volatility. To mitigate these risks, companies must conduct a comprehensive procurement risk assessment and implement strategies to minimize potential threats.
Combining risk information and criticality data derived from determining the impact enables urgent needs for action to be identified so that risks can be addressed in a proactive manner using appropriate measures, thereby ensuring the success of the company. Read more about the step-by-step approach, and conceptual and organizational implementation of risk assessment!
SCL Event - Louis Ferretti - IBM - Project Executive, Product Environmental ...Global Business Intel
1) The document discusses managing risks in globalized supply chains and the importance of assessing supplier and supply chain risks.
2) It provides an overview of IBM's approach to supply chain risk management, including their total risk assessment tool, risk mitigation planning, and ongoing monitoring.
3) Managing supply chain risks is important for business continuity as disruptions can impact revenue and profits. A systematic approach is needed to identify, assess, and address risks.
The document provides an overview of procurement risk management. It discusses the basic approach to risk management including identifying risk areas, avoidance, reduction, sharing and mitigation. It also covers supplier risk events, taking an integrated view of risk across the supply chain, and the benefits of risk management services. The document outlines the key steps in a procurement risk management program and challenges to establishing such a program. It provides recommendations on mitigating supplier risk and protecting the supply chain.
Key Concerns in the Pharmaceutical and Healthcare Supply Chain - D.Quinn Apri...Dan Quinn
This is the output of a recent Achilles sponsored round-table on Supply Chain Risk Management at the ProcureCon Health 2013 event in Zurich - hope you find it interesting. Regards, Dan.
Supply Chain Risk Strategies for Emerging Markets by Brittain LaddBrittain Ladd
This document discusses supply chain risk strategies for companies operating in emerging markets. It notes that while emerging markets offer growth opportunities, they also present significant risks that companies need to manage. The document outlines various types of supply chain risks, such as macroeconomic risks, risks from partners and internal operations. It emphasizes that companies should take a holistic approach to assessing risks across their entire supply chains and implement resilience strategies to mitigate vulnerabilities. Managing supply chain risk is particularly important in emerging markets due to factors like unclear regulations and infrastructure challenges.
This document discusses risk management strategies for outsourcing at AMD Nasik. It provides contact information for three managers involved in outsourcing. The abstract indicates it will discuss risk management case studies from AMD Nasik's outsourcing activities for the SU30 project over 7-8 years. Keywords include outsourcing, packages, educating suppliers, and parallel suppliers. The document then outlines AMD Nasik's risk management process and provides examples of retendering when initial quotes are too low and placing purchase orders with multiple suppliers for the same part.
This is supply chain article mainly for manufacturing supply chain professional in the field of sourcing and procurement.
This gives clear strategy of sourcing types of portfolio category in the procurement function. This will also useful to management student for reference purpose.
Monitoring of latent risks and an early warning system for events enable prompt implementation of appropriate preventive measures in a crisis situation. These predefined actions, together with quicker crisis response time and assessment of the criticality can save costs and time. Read more about the step-by-step approach, and conceptual and organizational implementation of risk identification!
The document discusses how emerging markets can enhance their supply chains to diversify risks and sustain economic growth. It notes that suppliers are exposed to risks like natural disasters and political instability. The expert recommends that emerging markets focus on diversifying these risks by strengthening supply chain networks. Outsourcing parts of the supply chain can transfer risks to other parties while gaining benefits like reduced costs and access to new technologies. Effective risk management involves identifying, assessing, prioritizing, and developing actions to mitigate risks across the supply chain.
The document discusses the growing challenges that companies face from supply chain risk and how internal audit functions can help address these challenges. It notes that supply chain disruptions can significantly hurt profitability, shareholder value, and reputation. It recommends that companies take a holistic approach to identifying critical suppliers and assessing their financial health and stability to develop leading risk indicators. It also suggests that internal audit can help by reviewing supply chains to identify vulnerabilities, developing monitoring processes, and assessing risk controls. The overall message is that internal audit can play a key role in helping companies strengthen their supply chain risk management.
The document discusses the evolution of supply chain sustainability from a focus on regulatory compliance to strategic benefits. It outlines how assessing environmental impacts across the entire supply chain can reduce costs and risks. Major companies now require suppliers to measure, report, and improve their sustainability performance. Standards are emerging around metrics, reporting, and verifying sustainability claims. Supply chain sustainability is becoming a key factor in business contracts and a mainstream business activity.
Emerging supply chain risks. How will you control them?Larry Smith
1) The document discusses how to control supply chain risks. It defines supply chain risk and explains why controlling risks is important to minimize disruptions.
2) It describes the difference between risk identification/assessment and risk control/monitoring. It also outlines how to develop a risk control and monitoring framework.
3) The framework involves capturing risk data, implementing control processes, monitoring risks, evaluating risks, and communicating risks to stakeholders. It requires the right skills, processes, technologies, and frameworks to achieve control over supply chain risks.
How will you control your emerging supply chain risks without extra slidesLarry Smith
1) The document discusses how to control risks in a supply chain. It defines supply chain risk and explains why controlling risks is important to minimize disruptions.
2) It describes how risks flow through a supply chain and provides an example using the food industry. Both operational and risk information must flow between all entities.
3) The document outlines how to develop a risk control and monitoring framework including using risk technologies, implementing risk-focused processes, and developing skills in risk analysis, monitoring, and communication. It provides examples of how each component contributes to managing supply chain risks.
The top three supply chain/procurement risks according to the survey are:
1) Supply interruption risk
2) Lack of an effective senior executive-led sales and operations planning (S&OP) process
3) Lack of timely and accurate information and spend analysis capability for strategic sourcing
The top three solutions that would have the greatest impact in minimizing risk are:
1) An integrated and supported supply chain and/or procurement strategic plan
2) A formal and effective enterprisewide supply chain risk management process
3) An effective corporatewide strategic sourcing process
The top three current key business priorities related to supply chain solutions are:
1) An integrated and supported supply chain and
This paper introduces the concept of Supply Chain Risk
Management. It identifies various risks and explains the process of managing these risks. With technology in place, automation of some of the processes brings down the risks involved. Sadly, many companies are not adequately automated to address these issues. The paper also highlights how information technology can be adopted in certain areas in supply chain to ensure visibility and reduce risk occurrence.
This document discusses implementing the Basel Committee on Banking Supervision's Principles for Effective Risk Data Aggregation and Risk Reporting (BCBS-239). It begins with some questions and challenges around BCBS-239 implementation related to the scope of risk data aggregation, level of automation, compliance focus, regulator engagement, implementation guidance, target state definition, and progress measurement. The document then presents six themes for interpreting the BCBS-239 principles: materiality, flexibility, reconciliation and validation, transparency, automation and adaptation, and speed and confidentiality. It outlines a framework moving from siloed, manual arrangements to a totally integrated, automated environment. Benchmarks are suggested to measure compliance levels against this target state.
Ähnlich wie Recipe for successful Supply Chain Risk Management (20)
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.AnnySerafinaLove
This letter, written by Kellen Harkins, Course Director at Full Sail University, commends Anny Love's exemplary performance in the Video Sharing Platforms class. It highlights her dedication, willingness to challenge herself, and exceptional skills in production, editing, and marketing across various video platforms like YouTube, TikTok, and Instagram.
The Most Inspiring Entrepreneurs to Follow in 2024.pdfthesiliconleaders
In a world where the potential of youth innovation remains vastly untouched, there emerges a guiding light in the form of Norm Goldstein, the Founder and CEO of EduNetwork Partners. His dedication to this cause has earned him recognition as a Congressional Leadership Award recipient.
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Recipe for successful Supply Chain Risk Management
1. WHITE PAPER
Recipe for Successful
Supply Chain Risk Management
In collaboration with:
WHITE PAPER
Ingredients:
- 1 cup Supply Chain
- ¾ cup Transparency
- 2 tbs Risks
- 1 pinch of preventive actions
- Mix with procurement process
- ...
Recipe for SCRM
5. 1
Introduction
This white paper serves as support for everyone involved in
implementing supply chain risk management (SCRM). These
guidelines are intended to provide companies with a checklist
containing all the ingredients that are important for setting up
professional, successful supply chain risk management. In this
way, time-consuming delays and costly errors can be avoided.
The individual chapters contain detailed descriptions on the
following ingredients for a comprehensive supply chain risk
management process, and how to integrate them in an organi-
zation:
• Definition of the scope
• Definition of risks to be monitored (“Risk Inventory”)
• Supply chain transparency
• Risk identification
• Risk assessment
• Action plan management for minimizing risks
• Integration into further procurement processes
As the approach described in this white paper is a generic one,
specifics must be adapted to the relevant sector and company
size in order to adapt the generic concept accordingly.1
You can
find a detailed description of the benefits and the return on in-
vestment of supply chain risk management in the “ROI of Supply
Chain Risk Management” study.2
As is the case with any dish: Adjust the ingredients according to
your personal (company-specific) liking!
1
This will not be pointed out again in the chapters below.
2
Free download at www.riskmethods.net/de/roi
As the approach described in this white paper is a generic one,
specifics must be adapted to the relevant sector and company
You can
find a detailed description of the benefits and the return on in-
“ROI of Supply
As is the case with any dish: Adjust the ingredients according to
- Definition of the scope- Supply chain transparency- Risk identification- Risk assessment
- ...
Checklist of all ingredientsrelevant to success:
6. -6-
2
Ingredient 1:
Selection of Relevant Supply Chains
First, define which supply chains to focus on and to include in SCRM. In principle, one of two approaches can
be used: Either a) all supply chains or b) a very specific section of the supply chains is monitored.
The following parameters can be used and taken into consideration for specifying the section:
2.1 Impact on Sales
Besides the purchasing volume, the impact on sales must also be
taken into account as a parameter. The idea behind selecting the
impact on sales is to capture additional supply chains that may
have low purchasing volumes yet impact severely on whether a
product or service can be supplied.
2.2 Customer Specifications
As supply chains based on customer specifications are not selec-
ted using classic decision-making processes, they could contain
additional risks when combined with the established supply net-
work. Insolvency risks (“pain-sharing”), performance risks and
also quality risks are examples of this.
2.3 Region
The background to a region selection is that the focus of risk
management activities is on supply chains in unstable local or
national environments. The reasons for this can often be found
in infrastructural, macro-economic and political risks. The criti-
cality may even be higher if certain circumstances exist, like sin-
gle-source situations, extremely long storage periods or patent
dependencies.
2.4 Purchasing Volume
According to the Pareto Principle, 20% of the supply chains that
make up most (80%) of the purchasing volume can be identified,
for example. The intention of this parameter is that all large-scale
supply chains are included in the risk radar. In many cases addi-
tional parameters are combined with this one, as the purchasing
volume alone does not ensure that all critical components or ser-
vices concentrated on are covered.
2.5 Selected Indirect Materials and Services
When taking a closer look at supply chains that impact on sales,
many a service that is supposedly quick and easy to substitute
turns out to be one that should at least be monitored: Availa-
bility of certain indirect materials and services, such as logistics
services, machinery, sales materials or IT can certainly impact on
the supply, depending on the sector and size of the company.
2.6 Technology and Patents
When monitoring risks in supply chains it is also important to
take note of technological expertise and the legal situation, and
where applicable, even of patent dependencies: Are technolo-
gies available that secure a USP for your own products? Patents
that force single-source situations or that are necessary for fu-
ture products or services? In that case, it is important to include
these supply chains in the monitoring process as well.
2.7 Ownership Structures
Any ownership structures in the organization itself in respect of
suppliers or even competitors require that such supplier relati-
onships be included in risk monitoring, where applicable.
7. -7-
3
Ingredient 2:
Definition of Risk Inventory
Once the focus as to which supply chains should be monitored
has been defined, the company-specific risk inventory must
be specified. Typically, the risk inventory is recorded in a risk
scorecard that applies uniformly throughout the company. This
scorecard includes all individual risks and indicators, which act
as sensors for detecting risk changes. To facilitate definition of
these individual risks, it helps to create theme-based clusters.
For example, all aspects concerning
• Supply chain stability
• Supply disruption risks
• Market and cost risks
• Image and compliance risks
• Performance and quality risks
can be organized into individual areas. The decision as to which
risks should be included in a risk scorecard is based on criteria
such as:
• Reflection of the corporate and procurement strategy
• Reduction to relevant risks (i.e. no “nice-to-know”
information)
• Availability (is an authoritative database available?)
• Global coverage of the database
This should not be based exclusively on the suppliers (solven-
cy, CSR conformity, etc.); interruptions can also occur along the
supply paths: Location risks such as natural catastrophes, strikes
and accidents at sites, logistics hubs or warehouses often affect
several suppliers at once. Furthermore, country risks that are
imminently connected to suppliers and locations, for instance in-
frastructural, political or macro-economic risks, can affect entire
markets. In practice, this results in a subset in most cases, which
consists of the following risks and which can be monitored on
the basis of 1-n indicators.
3.1 Examples of Supplier Risks and Indicators
• Financial stability supplier
- Ownership structure
- Revenue stability
- Insurance coverage
- Current ratio
- Profit margin
- Contract limit
- Cash collection
- Payment behavior
- Patents/rights
- Credit rating
- Low-cost supplier threat
- Field issues
- Major product release delays
- Revenue/growth outlook
- Bankruptcy
• Innovation potential
- Number of new patents
- Key employee stability
• Price increase
- Monopoly / oligopoly situ-
ation
- Currency exchange rates
• Labor / health & safety
- Labor Practices & Human
Rights principles at supplier
• Environmental / sustainability
- Environment
- Hazardous substances
- Carbon footprint
• Fair business practices
- Fair business practices
principles at supplier
• Sustainable procurement
- Sustainable procurement
principles at supplier
• Information / IP security
- Confidential information
security
- Cyber attacks or other IT
security issues
- Intellectual property (IP)
security
• Regulatory & Legal aspects
- Sanctioned suppliers
- Sanctioned persons
- Supplier corruption or
bribery
- Conflict minerals
• Quality
- Relocation
- Failures
• Delivery reliability
- Delivery quantity reliability
- OTD performance
• Operational capabilities
- Manufacturing capabilities
- Crisis management
• Disasters at supplier site
- Any disasters at supplier site
(man-made, other hazards)
• Material / services availability
- Accessibility to rare raw
materials
• Staff disputes
- Industrial disputes at
supplier plant
8. -8-
Ingredient 2:
Definition of Risk Inventory
3.2 Examples of Location Risks and Indicators 3.3 Examples of Country Risks and Indicators
• Natural Hazards
- Earthquake
- Volcano
- River flood
- Tropical cyclone
- Wildfire
- Extratropical winter storms
- Flash flood
- Hailstorm
- Lightning
- Storm surge
- Tornado
- Tsunami
• Local Events
- Civil unrest
- Terrorist acts
- Disasters at location
- Power outages
- Industrial disputes at location
• Corruption or bribery
- Country corruption or bribery
• Labor cost
- Labor cost
• Political situation country
- Political situation
- War
• Logistics Performance
- Customs
- Infrastructure
- International shipments
- Logistics competence
- Tracking & tracing
- Timeliness
• Pandemic outbreaks
- Pandemic disease outbreaks
• Financial stability country
- Country rating
- GDP growth rate
- GDP per capita
- Unemployment rate
- Population below poverty line
- Public debt
- Inflation rate
3
9. -9-
4
Ingredient 3:
Supply Chain Visibility
3
Study ”Supply Chain Resilience 2014“ – Business Continuity Institute.
4
The telecommunications sector collaborates with GeSI (Global e-Sustainability Initiative) and shares information regarding CSR in the supply chain.
This is also the case with the chemical industry, which has a similar arrangement in the form of the TfS initiative (Together for Sustainability).
For comprehensive risk management along the entire supply
chain, it is useful to include not only the full scope of the supply
chains and the risk inventory in the risk radar, but also as many
tiers of the relevant supply chains as possible. The reason for this
is obvious: Approx. 51% of all supply disruptions originate below
the Tier 1 supplier3
. It is therefore important to capture the 1st
tier of the supply chain structure and typically also the supply
chain substructures. As only a percentage of supply interruptions
can be traced back to incidents at suppliers, it is equally essential
to record the paths and structures, and to include these in risk
monitoring. This includes:
• Neuralgic logistics hubs such as ports and airports
• Bottleneck regions such as the Kiel Canal or the Suez Canal
• Locations of warehouses and distribution centers, for example
Effective means for identifying partially non-existent informa-
tion are:
• Dispatch of questionnaire to 1st tier suppliers, incl. follow-up
(e.g. through external service providers)
• Inclusion of the required information in RFX processes (Re-
quest for Information, Request for Quotation)
• Integration of the required information in cyclical voluntary
supplier information
• Integration of the required information in the supplier qualifi-
cation process (onboarding)
• Integration of the required information in supplier auditing
questionnaires
Practice has shown that obtaining information from suppliers is
easier if an explanation of the background is forthcoming. This
results in understanding on the part of suppliers and dispels any
existing reservations (e.g. bypassing the 1st tier business part-
ner). It also helps, of course, if suppliers benefit from disclosing
their 2nd tier structures: For example, some companies share
the risk alerts generated from 2nd tier structures with their di-
rect suppliers (1st tier). As a result, both parties benefit directly,
and information acquisition is faster and more complete. The
telecommunications sector or the chemical sector use a similar
approach and have already created topic-specific networks for
exchanging risk information in the area of CSR.4
This shows that
approaches regarding sharing of risk information are already
functioning successfully in some areas: Effort on the part of eve-
ry individual is reduced as the network shares the effort associa-
ted with gathering information (e.g. audit), and at the same time
more influence can be exerted where maladministration is iden-
tified. Apart from that, suppliers also benefit from the network,
as redundant audits can be avoided, and as such, also costs asso-
ciated with these audits.
10. -10-
The challenge in identifying and constantly monitoring risks
along the supply chain lies in the enormous data requirement:
Information from a large number of expert databases is neces-
sary for initial assessment of latent supply chain risks. The same
applies for ongoing risk monitoring on a (near) real time level to
identify crisis events on an ad-hoc basis. Monitoring a mere 100
key supply chains (1st and 2nd tier) using a scorecard comprising
40 indicators requires constant updating of approx. 48,000 infor-
mation items. It is logical, therefore, that a high degree of auto-
mation in the collection and updating of data is needed and that
this should be an essential decision criterion when setting up
supply chain risk management. A high degree of automation also
has other beneficial aspects: Increased efficiency gain (working
time) is achieved because manual data collection and updating
becomes redundant, which means there is more working time
for value-adding activities, such as risk prevention.
In addition, it is important to take into account the timeliness
of the required information: Databases such as those of the UN
ISDR (United Nations Office for Disaster Risk Reduction) may
offer a large volume of historical data related to catastrophes,
but no assistance in establishing an early warning system. Con-
sequently, it is advisable to use web-based search methods so
that risk events can be identified in near real time through online
and social media. Integrating intelligent search mechanisms also
assists in increasing the accuracy of matches and receiving only
relevant and authoritative information.
The relevance of risk information should be another criterion
for information acquisition. In this regard, it is helpful to focus
on risk objects to be monitored (suppliers, logistics hubs, sto-
rage, bottleneck regions, etc.) when requesting information from
data sources. Geocoding of key locations (supplier plants, logis-
tics hubs, etc.) helps in terms of geopolitical and location-based
risks, because it allows for inquiries in respect of specific addres-
ses. When requesting company data, master data (such as name,
legal form and address etc.) should be available in order to rea-
lize an optimal hit ratio in respect of credit information inquiries
or sanction checks, for instance.
To ensure that the required risk information is authoritative,
established data sources should be used, to the extent availa-
ble: Reinsurers such as MunichRE provide global, well-founded
and highly authoritative data on natural hazards on the basis of
worldwide geo-coordinates. Governments often make available
data on infrastructure, macro-economy, corruption or healthcare
(CIA Worldfactbook, RSOE, etc.) at no charge. Non-governmental
organizations, on the other hand, provide data on war indices,
spreading of epidemics, corruption indices, etc. (United Nations,
World Bank or Transparency International, WHO, CDC, etc.). Fur-
thermore, supplier data in respect of creditworthiness, sanctions
or corporate social responsibility of commercial providers (D&B,
Bureau van Dijk, Creditsafe, Format, European Compliance Com-
pany, EcoVadis, etc.) can be used.
Comprehensibility for everyone involved in the risk manage-
ment process is also an important parameter for risk identifica-
tion. For practical reasons, it is advisable not to use a methodolo-
gy that is too scientific when identifying risks (e.g. determination
of probability of a strike/unrest). Especially when it comes to soft
facts (risk assessment to be determined by persons), a simple
and comprehensible scale (range) is critical for success in terms
of users. Easy-to-understand scales such as “No risk”, “Medium
risk”, “High risk” and “Risk event” are useful here so that emplo-
yees‘ expert knowledge can also be included.
Easy, mobile accessibility that supports a cross-departmen-
tal methodology is another criterion for successful SCRM. For
example, “mobile apps” facilitate easy integration of expert
knowledge of quality, logistics, finances, legal issues, insurance,
compliance, corporate social responsibility and enterprise risk
management at the push of a button. A comprehensible risk
scale (see previous paragraph on “Comprehensibility”) promo-
tes interaction between departments, as a comprehensive un-
derstanding of risk identification is easy to establish. Incidentally,
the same applies to all information recipients of the early war-
ning system.
5
5
This is calculated as follows: 100 1st tier suppliers + 300 2nd tier suppliers = 400 suppliers to be monitored (assuming that one 1st tier supplier has three 2nd tier suppliers).
Add to this 800 locations to be monitored (assuming that there are two logistics hubs per supply path). Formula: (400 suppliers x 40 indicators) + (800 locations x 40 indica-
tors) = 48,000 risk information items required.
Ingredient 4:
Risk Identification
11. -11-
6
Ingredient 5:
Impact Assessment
Defining tolerance areas (e.g. in the scorecard at indicator level)
allows automatisms for alarm notification to be defined. Whe-
re an indicator moves out of the tolerance area because of a
change in a supplier’s failure index, this triggers a message/alarm
to the responsible employees. As a result, they can generate ap-
propriate responses to the risk event within a short period of
time in case of a crisis. In addition, analyses enable risk situations
(without occurrence) to be examined, so as to initiate tailored
preventive risk avoidance activities. In this way, preventive mea-
sures can be activated on the basis of trends or accumulated risk
situations, for example.
In both scenarios, it is important to assess the criticality of the
supply chains affected. In many cases, determining a goods
group/item-specific criticality is unavoidable. The granularity
criterion gained in the assessment then allows suitable and fo-
cused action plans to be initiated. Typical factors for determining
criticality are:
• Evaluation of dependency
- Ascertainable by means of EVO vs. sales of the supplier (de-
pendency of supplier)
- Ascertainable by means of EVO vs. part of sales attributable to
supplier products (dependency of supplier)
- Alternative, reliable sources (market structure)
• Evaluation of (potential) interruption
- Total time to recovery (TTR)
- Inventory incl. rolling stock
- Shortfall of parts (due to TTR) - production schedule for
TTR period (parts) + inventory = Delta
• Evaluation of financial impact
- Loss of sales due to Delta
- Loss of profits due to Delta
- Damage to reputation due to event
• Evaluation of effect on market
- Determination of customers affected
- Costs for corrective marketing and sales activities
• Additional risks/indicators depending on the sector,
company size, etc.
12. -12-
Interpreting current threats (cf. Chapter 5) and their impact (cf.
Chapter 6) makes up an important information base for deri-
ving suitable action steps. A differentiation is made here bet-
ween reactive measures for minimizing the impact in the case
of unavoidable risks, and preventive measures for precautionary
risk avoidance and reduction. When assessing the situation, it
is helpful to take into account the joint impact of threats and
potential damage: For example, a high potential threat through
earthquakes in critical supply chains with monopolists can be
transferred through insurance, while construction measures at
warehouses and production sites of suppliers may seem low risk.
On the other hand, a bottleneck in a supply chain with sufficient
reliable, alternative procurement sources and a short lead time
typically results in an action plan that includes activating the al-
ternative option(s) and rescheduling logistics. These two exam-
ples show that it may be extremely helpful to take these two
key parameters into consideration when selecting an action plan.
Implementing risk management measures in the supply chain
is generally a cross-departmental task: Necessary expert know-
ledge, reactive measures in the event of a crisis, and risk preven-
tion call for collaboration between the procurement department
and the logistics, compliance/CSR, insurance, risk management,
sales and other departments. To ensure a smooth and coordina-
ted order of events in terms of risk activities, it is worth creating
a type of action plan matrix, for example: By eliminating the re-
levant threats for a risk object (supplier, location/supply chain
hub, country, supply chain) and criticalities/impact (item-specific
where applicable), you can gain insight as to
a. when measures would seem effective
b. which measures seem appropriate
c. which departments are meaningful to include.
Measures are frequently differentiated based on their effect:
• Risk avoidance (e.g. non-qualification of suppliers associated
with risks in award decisions)
• Risk reduction (reduced risk potential by setting up alterna-
tive capacity/diversification)
• Risk limitation/transfer (specifying defined upper limits for
risks through Contingent Business Interruption insurance
with a deductible)
• Risk acceptance (possible risks are assessed as acceptable)
Communication of the risk situation in a transparent and verifia-
ble manner constitutes another task when implementing action
plans. It is therefore highly recommended to develop a scenario
for crisis events that includes responsibilities and procedures for
communication, implementation of damage control and knock-
on effects, and follow-up activities for purposes of prevention.
Prevention, in turn, includes setting up risk identification (Ingre-
dient 4), risk assessment (Ingredient 5) for purposes of early de-
tection, as well as preparing preventive measures and reactive
emergency plans (Ingredient 6). This will reveal how strongly
process-driven a (supply chain) risk management control loop
can be configured, so that it provides fully effective protection.
7
Ingredient 6:
Risk-Minimizing Measures
Probability of occurrence
Riskofdamage
LowMediumHigh
High Medium Low
Avoidance
Transfer
Limitation
Reduction
Acceptance
13. -13-
8
Ingredient 7:
Integration into Procurement Processes
The risk management process along the supply chain can benefit
from other procurement procedures and also support them. This
white paper focuses on the following interactions within Procu-
rement:
• Interaction in terms of award decisions
• Interaction in terms of supplier qualification/voluntary
supplier information
• Interaction in terms of purchasing dashboard/reporting
8.1 Interaction in Terms of Award Decisions
Within the framework of award decisions, Procurement “tradi-
tionally” evaluates costs and, in cooperation with the inquiring
technical department, quality and scope of the service to be
contracted. The risk data from SCRM provides an additional key
criterion for award decisions, which can be used for managing
and optimizing overall costs throughout the collaboration peri-
od with business partners. The positive spin-off of this is better
award decisions, as is explained in the riskmethods & eckseler
consult study “ROI of Supply Chain Risk Management”. By inte-
grating risk data, extreme costs resulting from supply disruptions
and damaged images of high-risk supply chains can be comple-
tely avoided, in an ideal case. Particularly, as regards identifying
1-n tier supply chains, and especially in the award process (e.g.
in the RFI), an option is provided for obtaining this information
quickly and in full from potential business partners, allowing for
a risk evaluation to be performed at that early stage.
8.2 Interaction in Terms of Supplier Qualification/
Voluntary Supplier Information
Regularly recurring supplier qualification/voluntary supplier
information is an effective means for capturing supply chain
structures of potential and existing suppliers. In practice, three
aspects are essentially of relevance:
• Verification of the production locations to be monitored (vs.
sales locations)
• Recording of key logistics hubs (e.g. Suez Canal, Rotterdam,
etc.)
• Determination of sub-tier suppliers
The benefit is obvious: Based on information (a-c) that is interro-
gated cyclically, supply chain structures can be automatically cap-
tured and updated – without research or maintenance effort on
the part of Procurement. In addition, added value for suppliers
can be generated, to the extent that the risk profile determined
via the qualification portal is made available to the supplier, for
example. Modern supplier management systems even support
the following interaction to allow for and review supplier feed-
back and, where applicable, also (self)-initiated measures based
on the published risk profile.
8.3 Interaction in Terms of Purchasing Dashboard/
Reporting
Numerous procurement systems offer comprehensive supplier
dashboards to facilitate the implementation of goods groups
strategies for goods groups managers and lead buyers, for ex-
ample. An integrated “control center” helps display data from
various procurement processes in a central location, and to
analyze this data and initiate the best possible derivations and
measures. When making important decisions, such as supplier
reductions, setting up alternative sources, risk prevention mea-
sures, changes in Contingent Business Interruption insurance
or other action plans on a well-founded basis, a display of this
nature combined with risk data is indispensable. In addition to
purchasing volumes, requirements forecasts, contract data, stra-
tegic implications, requester specifications, etc., risk and critica-
lity profiles of (sub-tier) suppliers, locations and (sub-tier) supply
chain structures make up one of the most important compo-
nents in providing procurement experts with a comprehensive
view and enabling successful procurement management.
14. -14-
9
Summary
A single white paper can certainly not answer every company’s individual requirements of SCRM generically.
With this paper, we hope, however, to have been able to provide you with a well-founded composition of
ingredients and ideas for your company-specific organization, and with process steps and possible contents
for configuring professional SCRM.
We look forward to your comments, feedback and experiences, and we will gladly also publish your experi-
ence reports in our Supply Chain Risk Management expert blog (http://blog.riskmethods.net/).
Our special thanks goes to all involved purchasing agents, who
shared their experiences with us within the framework of perso-
nal discussions and an onsite workshop, and who have actually
made this white paper possible:
Karl-Heinz Pöhlmann
VP Global SC & Purchasing,
Hottinger Baldwin Messtechnik GmbH
Jürgen Schuhmacher
Director of Strategic Procurement,
KARDEX Deutschland Produktion GmbH
Jörg Thürwächter
Strategic Purchaser,
KARDEX Deutschland Produktion GmbH
VP Global SC & Purchasing,VP Global SC & Purchasing,
Hottinger Baldwin Messtechnik GmbH
Director of Strategic Procurement,
Jürgen SchuhmacherJürgen SchuhmacherJürgen Schuhmacher
Director of Strategic Procurement,
KARDEX Deutschland Produktion GmbH
Strategic Purchaser,
Jörg ThürwächterJörg ThürwächterJörg Thürwächter
Strategic Purchaser,
KARDEX Deutschland Produktion GmbH
15.
16. About riskmethods
riskmethods provides companies with a comprehensive supply chain risk management solution for proactive monitoring and assessment
of risks in the supply chain. An early warning system for potential risk ensures that proactive steps can be taken to avoid supply disruption,
enforce compliance and protect the corporate image. The SaaS solution “Social Supply Risk Network”, which was developed in Ger-
many, combines state-of-the-art technology with cutting-edge provision of risk intelligence, to establish a leading standard in supply chain
risk management.
Version:Februar2015
KontaktKontakt
Contact
Heiko Schwarz
riskmethods GmbH
Orleansstrasse 4
81669 Munich / Germany
Phone: +49(0)89-9901 648-0
info@riskmethods.net
www.riskmethods.net