Across industries, companies are struggling to manage inventory in complex global supply networks, trying their best to match smooth uninterrupted supply with increasingly volatile customer demand. Inventory shortages often freeze operations and sometimes cause shutdowns, costing companies their profits and public image. To avoid potential shortages, enterprises often over-stock, effectively stalling functional capital and hurting the returns on equity and assets.
Black swan supply chain events have been traditionally associated with (if not formally defined as) improbable, rare, or unlikely events that have severe or even catastrophic business impact. However, as a result of a number of socio-economic factors it’s time to update our view of black swan supply chain events.
In the Ultimate Guide to Supply Chain Resiliency Program Success, we provide supply chain risk management practitioners with concrete suggestions and guidance on how to create, roll-out, and institutionalize a global supply chain resiliency program (SCRP). As part of the “PLAN” phase we discuss the need to describe the strategic context and influences by describing the key business drivers. Key supply chain risk management business drivers we identified include:
Topics: SCRM Best Practices
Recently, Resilinc has been closely monitoring reports concerning Brazil’s severe drought. As we enter an El Niño in 2015, Brazil can expect drier weather for the next few months further exasperating the situation. While droughts may be a primary concern to farmers, there are also downstream impacts to the global supply chain in terms of water supplies, power supplies, and raw materials that could impact product customers.
Topics: SCRM Best Practices
Did you catch John Oliver’s tirade on apparel industry supply chain practices? In a segment of his show that aired earlier this week, the case for supply chain risk management and visibility investments was made by an unlikely source. The popular TV program’s scathing indictment of the supply chain practices of the likes of H&M, Walmart, Nike and the Gap is, in and of itself, proof of the brand risk associated with complex globalized supply chains.
In the Ultimate Guide to Supply Chain Resiliency Program Success, I identify several dimensions which can be used to determine and describe the appropriate for a supply chain risk management program (SCRP). All are discussed in the broader context of building a complete business case for a supply chain resiliency program. Here is an excerpt from the guide. It is important to describe the boundaries of the program (what is and is not part of the program) from a variety of angles. This will bring clarity to the processes of communicating and setting expectations related to business goals and results. Depending on a number of factors including the organization’s business strategy, culture, and unique risk profile, one, or more typically, a combination of dimensions described below should be used to delineate your program’s scope.
In the Ultimate Guide to Supply Chain Resiliency Program Success, we identify six typical objections to supporting investments in supply chain risk management programs and share specific remedies. Areas of resistance tend to be related to professional incentives, psychology, misperceptions about costs, and a lack of awareness and education. Understanding the role that each of these factors may play and being prepared to neutralize the resulting objections is key to making your supply chain risk management business case. In this post, 5 objection categories are shared; our next post will address the sixth and final objection category.
Business continuity management (BCM)'s scope is perceived largely as internal to company's operations. In today's environment, biggest risks are from raw material suppliers or external partners.
With any supply chain disaster, the rippling effects of factory damage or shut downs can be immediately felt. Take the 2011 Japanese earthquake, as an example. Factories affected by the disaster were shut down, resulting in parts shortages at major suppliers which caused lines down and factory down times at large automotive manufacturers. The impact rippled through the supply chain layers. High tech, automotive, aerospace and other sector companies quickly found out that some of their suppliers were located or dependent on Japanese manufacturing facilities days and weeks after the event. Many supplier dependencies were not identified until much later.
Almost every article about supply chain risk management begins with the complexity and global reach of today’s supply chains. Over the last fifteen years, companies have made some very critical supply chain enhancements – sourcing from low cost countries, outsourcing manufacturing to sub-contractors across the globe, and going lean. I characterize these enhancements as Supply Chain 2.0.