Supply Chain
Risk
Supply Chain Risk
Management
• Analyze the risks
– Probability
– Impact
• Manage the risks
– Prevention (avoidance)
– Mitigation of the effects (impact reduction)
• Aligned with strategy
• Assess vulnerability
– Vulnerability Matrix (exercise?)
– Value at Risk (VAR)
Risk types in TFC
•
Supply risks
– Hurricane, earthquake, fruit disease, piracy, truck driver strike, price
changes, 2nd tier disruption
– Analyze probability and its effects (risk map)
• Actions: Supplier location, supplier relation affecting TTR (supplier
development, contract duration, dual sourcing), lot sizes, inventory,
portfolio changes
•
Process risks
– Warehouse strikes because of (too) high workload
• Actions: more FTEs, increase intake time, labor pool, outsource whse
– Inventory getting lost because of warehouse overflow
• Actions res: increase whse size, decrease lot sizes
– Mixing error (recall)
• Actions: Lotsize, Quarantine after production, Tracking and Tracing
•
Demand risks
– Research on Vit C health effects
• Actions: increase vit C inventory, smal(ler) batches, portfolio changes,
forced relaunch (+ horizon)
Assessing risks
Probability of occurrence
high
Possible actions
- Prevention
- Mitigation
low
low
4
Impact
high
Vulnerability matrix
Probability of occurrence
high
Possible actions
- Priorities
- Trade offs
low
low
Source: Krajljic
5
Value at risk
high
Assessing your
suppliers
high
Strategic
Routine
Bottleneck
Strategic importance
Leverage
low
low
Source: Krajljic
6
Supply risk
high
Suppliers assessing you
Relative value of business
high
Exploitable
Core
Nuisance
Development
low
low
Source: Kraljic
7
Account attractiveness
high
Strategy into action
Levels in version 2013
Theme
Sales
Level 1
Level 2
Level 3
SCM
Operations
Purchasing
Reliability
Service level
Order deadline
Shortage rule
Safety stocks
# Shifts
# Pallet locations
# FTE
Delivery window
Delivery reliability
Batches and
frequencies
Shelf life
Trade unit
Lotsizing in production
and purchasing
Speed and quality
Payment terms
Frozen period
SMED
Increase speed
Intake time
Preventive
maintenance
Solve breakdowns
training
Raw materials
inspection
Trade unit
Supplier selection
Payment terms
Quality
Transport mode
Extensions
in version 2013
Theme
Sales
SCM
Operations
Purchasing
Extension a
S&OP
Promotional pressure
Category management
Forecasting
Production interval
tool
Resource selection
Dual sourcing
Extension b
External
collaboration
Promotion horizon
VMI
Outsourcing
warehouse (MCC)
Inflate PET
VMI
Supplier development
CO2 sla
Extension c
CO2 footprint
Sustainabilty
Extension d
KPIs and targets
Extension e
Supply chain risk
management
KPI selection
Risk events
Relaunch (horizon)
Decrease of water
usage
Decrease of energy
usage
Decrease of start up
productivity loss
KPI selection
KPI selection
KPI selection
Scenarioplanner
Tracking & tracing
Quarantine
Risk events
Pooling warehouse FTE
Contract duration
Supplier development
Dual sourcing
Risk events