Business can be risky, discover the keys to risk management, and prepare for a rainy day. Turn your risks into profitable business moves.

1. WHAT IS RISK MANAGEMENT?
It’s a focus on managing demand and supply variability
and improving outcomes in an uncertain world.
RISK MANAGEMENT PROGRAMS ARE
MULTI-PRONGED
THE PORTS AS A RISK ISSUE
The supply chain becomes unreliable and the time for resolution is
longer and less manageable.
IN BUILDING AND RETHINKING RISK MANAGEMENT
PROGRAMS, KEEP THESE FIVE ELEMENTS IN MIND:
SUPPLY CHAININ THE
Bigger Ships = Lower Costs
LEADERSHIP
MATTERS
Companies who rate
themselves higher on
the execution of risk
management
programs are more
likely to be driven by
leadership support.
Redesign the role of
procurement to build,
not just audit, value
chain relationships. Understand that while
technology vendors
adopt risk
management as a
technology, visibility
is only a part of the
solution.
Create well-defined
practices and drills to
help the organization
mobilize quickly in
the face of disaster.
IT’S ABOUT
MORE THAN
TECHNOLOGY
IMPLEMENT
SUPPLIER
SENSING &
VISIBILITY
PROGRAMS
THINGS
HAPPEN -- NOT
ALL RISKS CAN
BE PREVENTED
The most successful global supply
chains have an equal focus on
prevention and recovery.
PROCEED WITH CAUTION
A mature supply chain leader knows
that a disruption lies ahead.
The most advanced risk management programs are rooted in preventive measures.
The focus is top-down and horizontal -- working across functional silos -- and led by a
business leader.
The common threads are prevention and readiness.
Source: http://www.slidshare.net/loracecere/-
supply-chain-riskmanagment11august2015final
FOCUS ON
MULTI-TIER
INVENTORY
MANAGEMENT
Define an
inventory planning
position and use
multi-tier inventory
management
technologies.
RECOMMENDATIONS
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PROPERLY DESIGNED SUPPLY CHAINS PIVOT QUICKLY
And recovers with alternate supply, redistribution of
inventory, and new shipping lanes
RISK MANAGEMENT
Talent Availability
A third of all companies experience an average
three of business disruptions per year resulting in
an impact to the balance sheet.
And other critical business issues
Volatility Product Quality Supplier Reliability
BE PREPARED
When practices are well-developed, the impact of a natural disaster on the supply
chain should be minimal.
NATURAL DISASTER
SUPPLIER SENSING AND DEVELOPMENT
PREVENTING A MATERIAL EVENT
PUSH AND PULL
Manufactures implement cost-effective processes designed for short cycles
and smaller ships to improve reliability.
URGENT
LATE
While traditional programs focus on buy-sell relationships and reducing supplier
costs; supplier development programs focus on supplier health.
INTER-ENTERPRISE SYSTEMS ARE KEY
TO REAL TIME INFORMATION
Traditional connectivity methods of EDI have too much latency to
manage the hour-by-hour and cross-time-zone requirements of
supply and cannot be managed through ERP extensions.
Ocean carriers are moving towards longer cycles and larger ships. This
has an impact on work capital and obsolescence.
Supply can usually be sourced from multiple points. A properly
designed supply chain can quickly adapt.
Bigger Ships = Risks For Manufacturers
Instead, it requires the building of outside-in processes using
business networks based on many-to-many data models.
Larger ships require greater port capacity for unloading. As ports slowdown, lead
time variability increases ten-fold. Containers sit on the water with little with little
to no predictability for unloading.
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