Tesla announced in early April that it was unable to meet its delivery target of 16,000 vehicles for the quarter due to component shortages on about half a dozen of its 8000 parts. At prices for Tesla cars starting at $70,000, the delivery shortfall equates to almost a $100 million gap, which is not minor by any means. In the aftermath of the announcements, Tesla announced the departure of two senior manufacturing and production executives, Greg Reichow, its vice president of production, and vice president of manufacturing, Josh Ensign.
Supply chain practitioners, accustomed to the ongoing disruptions throughout the sub-tier supply chain, are familiar with the usual risks that threaten supply chain continuity: factory fires, port disruptions, force majeure, chemical spills, and so on. But as global supply chains grow more interconnected, seemingly unrelated events can have a ripple effect, branching out and impacting your supply chain.
In this post, we examine three of these less apparent supply chain risk types, explain the nature of their risk in the supply chain context, and present guidelines to help you better respond to and mitigate such risks.
Cloud or Software-as-a-Service (SaaS) as a technology and business deployment model has won the war versus the traditional on-premise model for software, as it has transformed the development, delivery, and deployment of most categories of business applications. The economic benefits are well known and proven at this point such as ease of deployment, maintenance/upgrades, and financing (e.g. annual subscription versus one-time license). As a result, virtually all new applications are developed for the cloud; on-premise application development is in maintenance-only mode.
But, you knew that.
What you may not fully appreciate is that, in the case of supply chain risk management (SCRM), the cloud has not only transformed the economics of delivering tools that automate existing processes, but it has transformed what is possible.
As a result of cloud technology, the SCRM process has been completely redefined by the enablement of two core capabilities that can be described as the pillars of a true paradigm shift.
In 2011, the unthinkable occurred in Japan. A massive earthquake triggered a tsunami which, in turn, triggered a nuclear power plant meltdown, all of which combined to create a humanitarian disaster of epic scale. It is during times like these that many companies rethink their supply chain vulnerabilities and threat matrices. The result is an upswing in interest in supply risk management and resiliency strategies and initiatives and associated technology solutions.
With any growing business discipline, there will always be the need for publications that are both insightful and engaging. As global supply chains become more interconnected and entangled, there is a growing demand in the supply chain management community for books, case studies, critical success stories, best practices, and publications that provide concise and intriguing intelligence into supply chain risk management and resiliency. Fortunately, there are numerous authors providing companies with fresh and timeless insights to better manage the everyday and unexpected risks and disruptions along the global supply chain.
So many books, so little time.
That said, we’ve whittled down six worthwhile reads we believe best represent the growing discipline of supply chain risk management and resiliency. By no means is this an exhaustive list – just a few poignant works we think should live on your bookshelf. In addition, keep reading to find out how to claim your free hardcover copy of The Power of Resilience: How the Best Companies Manage the Unexpected by Dr. Yossi Sheffi!
“It is what you read when you don't have to that determines what you will be when you can't help it.”
– Oscar Wilde
In part 1 of this blog, we examined lithium-ion batteries in the supply chain context and examined the recent ban's stipulations. In Part 2, we discuss why many shippers and advocacy groups disagree with the prohibition, what this ban can mean to supply chain and procurement professionals, and provide next steps for those potentially affected.
This is part 1 of a 2-part blog addressing the International Civil Aviation Organization's (ICAO) recently enacted ban on the shipment of lithium-ion batteries as cargo consignments on passenger planes and the associated supply chain risks of such provisions. In part 1, we look at the lithium-ion battery supply chain in context and examine the ban stipulations. In Part 2, we discuss why many shippers and advocacy groups disagree with the prohibition, and what this ban can mean for supply chain and procurement professionals.
The ICAO – a United Nations agency regulating the transport of dangerous goods on aircraft – has enacted a controversial ban on the shipment of lithium-ion batteries as cargo on passenger aircraft. Due to long-standing concerns from pilots and plane makers that lithium-ion battery (LIB) consignments present a critical fire risk aboard aircraft, the ICAO’s 36-state governing council declared the prohibition along with other LIB battery shipping regulations, effective April 1st, 2016. Shippers and advocacy groups argue the prohibition unnecessarily impacts the battery supply chain without addressing the true safety risks associated with transporting LIBs.
For most enterprise business applications, the addition of mobile interfaces has facilitated data access and accelerated workflow. For some business applications, mobility is transforming the business process and creating new capability rather than simply extending the application UI to handheld devices. This is the case with cloud applications for supply chain risk management (SCRM) and resiliency.
Last August, our whitepaper “El Niño: A Test of CPO Leadership and Your Supply Chain Resiliency Culture” forewarned supply chain practitioners and stakeholders of the various supply chain risks associated with the most severe El Niño since the 1950s. Extreme weather patterns and dry spells, like those generated by El Niño, present an array of supply chain risks and can compromise the production of industrially viable resources that could be hiding in your Bill of Materials.
In this brief case study, we examine El Niño’s recently observed impact on the global output of palm oil and its prices, provide an overview of palm oil’s diverse industrial applications, and discuss how planning for “bigger picture” supply chain risk elements can help inform your company’s resilient procurement practices.
Across companies and industries, there is a growing awareness of the importance of supply chain risk management and resiliency programs. However, establishing an enterprise-wide supply chain risk management and resiliency program within your company doesn’t happen overnight, nor should it. It’s a multi-pronged process unique to each company, and each company is at a different stage of awareness, preparation, implementation, adaptation and maturation.
On the second day of the recent annual Global Supply Chain Resiliency Council event, we held a live poll at the conclusion of our customer training sessions to gauge where attendees were in their respective SCRM and resiliency journeys. The supply chain practitioners in attendance represent some of the largest companies with the most extensive global supply chains. As such, this post provides our poll’s findings to give you a better sense of where other major companies are in their SCRM journeys, and as to why they choose to pursue supply chain resiliency.