Supply Chain Risk Management (guest lecture Tilburg University March 2010)

Supply chain risk management & resilience Guest lecture | Tilburg University | 31 March 2010 Robbert Janssen E-mail: [email_address]

Outline ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Introduction ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Recent years… Source: Yahoo Finance

Most important risks faced by multinational firms ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Supply chain risks mentioned three times in Top 10!

Natural disasters reported 1900-2008 Source: EM-DAT (2010)

“ It does not happen to our company”

Risks in the supply chain – an example The Albuquerque accident ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

2 very different responses to the accident ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Normann & Jansson (2003), Sheffi & Rice Jr. (2005)

Some developments and trends in supply chain management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Christopher (2005), Husdal (2009)

What are the most important developments / trends that lead to increased risks in the Netherlands? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: TNO-onderzoek: Risico’s en Kwetsbaarheden in Logistieke Ketens (2010)

4 constructs that we need to deconstruct ,[object Object],[object Object],[object Object],[object Object],[object Object],Source: Wagner and Bode (2008)

Supply chain risk ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Jüttner et al. (2003); Zsidisin and Ritchie (2008)

Analysing supply chain risks ,[object Object],[object Object],[object Object],Source: Sheffi & Rice Jr. (2005)

Risk perception ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Supply chain risk sources ,[object Object],Source: Christopher & Peck (2004)

Supply chain risk sources ,[object Object],Source: Christopher & Peck (2004) Machine break-down Employee strike Order quantity policies Quality control Volatile customer-demand Wrong order-forecast Natural disasters Political instability Severe weather conditions Bankruptcy of supplier Quality problems at supplier Transportation failure

Supply chain disruptions ,[object Object],[object Object],[object Object],Source: Craighead et al. (2007), Wagner and Bode (2008)

Iceberg of disruptions Worldwide known disruptions 9/11, novel influenza H1N1 Region / country Piracy, Foot and mouth disease, Q-fever Individual (chain) disruptions Fire, strikes Disruptions that took place but were not in the press ‘ almost-disruptions’ Big customer threatens to leave Insolvable supplier saved from bankruptcy Huge reservoir with potential disruptions

Most frequently occurring disruptions in 2008-2009 ,[object Object],[object Object],[object Object],[object Object],[object Object],Source: TNO-onderzoek: Risico’s en Kwetsbaarheden in Logistieke Ketens (2010)

Where did the disruptions come from? Source: TNO-onderzoek: Risico’s en Kwetsbaarheden in Logistieke Ketens (2010)

The disruption profile Source: Sheffi & Rice Jr. (2005)

What are the consequences of a disruption? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Toyota ,[object Object],[object Object],[object Object],[object Object],[object Object],Source: Spitsnieuws 24 March (2010)

Consequences of supply chain disruptions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Hendricks and Singhal (2003, 2005a, 2005b) , Wagner and Bode (2008)  The consequences of disruptions are severe but are they the same for all firms?

Supply chain vulnerability ,[object Object],[object Object],Source: Wagner and Bode (2008)

Drivers of supply chain vulnerability ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Craighead et al. (2007), Wagner and Bode (2008)

Example: Density ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: TNO - Quick scan: overzicht van netwerk logistieke hot spots in Nederland (2009). Falasca et al. (2009)

Example: Lean and JIT production philosophies ,[object Object],[object Object],Source: Christopher and Rutherford (2004)

One construct left ,[object Object],[object Object],[object Object],[object Object],[object Object]

Supply chain risk management (SCRM) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object], Well that sounds pretty easy, doesn’t it? Source: ISO 31000

The problem of risk management: It’s an ostrich business! Risk management is not sexy, no fun and it costs money. And the benefits are not even sure!

5 most important barriers towards implementing SCRM ,[object Object],[object Object],[object Object],[object Object],[object Object],Source: TNO-onderzoek: Risico’s en Kwetsbaarheden in Logistieke Ketens (2010)

Step 1+2: Risk identification and assessment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Lammers, Ploos van Amstel and Eijkelenbergh (2009)

Failure Mode and Effect Analysis (FMEA) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Step 3 of risk management

Film clip – example of creating awareness and focus ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Step 3: Risk management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: DeLoach (2000), Husdal (2009)

Cost-benefit analysis of risk management

[object Object],[object Object],[object Object],[object Object]

Supply chain resilience ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Fiksel (2006), Sheffi and Rice Jr. (2005), Husdal (2009) Resilience needed

How to become more resilient? ,[object Object],[object Object],[object Object],[object Object],[object Object],Source: Sheffi and Rice Jr. (2005), Lammers, Ploos van Amstel en Eijkelenbergh (2009) redundancy transparency flexibility collaboration

Reconciling supply chain risk with supply chain management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Melnyk, Davis, Spekman and Sandor (2010)

Summary ,[object Object],[object Object],[object Object],[object Object],[object Object]

Suggested further reading ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Thanks for your attention Any questions?

Supply Chain Risk Management (guest lecture Tilburg University March 2010)

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