MANAGING OPPORTUNITIES
AND THREATS IN SCM
Assist.Prof.Dr. Lütfi SAKA
Okan University, Vocational School,
Head of Management and Organization
Logistics Program Coordinator
[email protected]
MANAGING OPPORTUNITIES AND THREATS IN SCM

Introduction

Data and Information Sharing

Recommendations for Government and Business

What is Risk?

Risk Management

Conclusion
INTRODUCTION


Increasingly globalized operating models and
the growing interconnectivity of supply chain
and transport networks are leading to evolving
risk profiles and new systemic risk management
priorities.
Risk profiles are changing as businesses’
operating models become more globalized,
and supply chain and transport networks
become increasingly complex, interconnected
and interdependent.

Major disruptions in the last five years – including
the global financial crisis, terrorist scares, flooding
in Thailand and the Japanese earthquake and
tsunami – have heightened public discussion on
risk preparedness within supply chains and
transport networks.

the global financial crisis

terrorist scares

Flooding in Thailand

Japanese earthquake and tsunami
The interconnected nature of global supply
chain and transport networks means modern
businesses are often “reliant on thousands of
independent suppliers and partners located in
many countries”.
 Consequently, they both affect and are
affected by risks at various stages, from the
sourcing of raw materials to the destinations of
goods and services, and these risks are not
always within the confines of the company’s
control.

Effective identification and management of
systemic risk across the end-to-end supply chain
requires a high level of collaboration between
businesses, professional bodies, governments,
regulators, suppliers, customers and even
competitors.
 Carefully
managed sharing of information,
expertise
and
priorities
can
develop
collaborative and trusted relationships, which are
crucial to pre-disruption preparation and postdisruption rapid response, as well as improve the
other four risk management methods prioritized
by the expert group.


There
is
considerable
enthusiasm
for
developing greater collaboration between
business and government at the global level
on supply chain and transport risk, recognizing
that the nature of global disruptions means
there are too many economic, security and
political issues to take a well structured
approach to risk management.
Simplifying, internationally harmonizing and
implementing effective legislation is a key
concern across industry groups. Aligning
legislation and regulation with modern industry
practices is essential to improved risk
management.
 However, especially countries like Turkey where
poorly targeted legislation and regulation also
has the potential to unintentionally and
unnecessarily exacerbate disruptions to supply
chain and transport networks.

Conducting risk assessments and crosscompany scenario planning will enable policymakers and industry to proactively identify
network vulnerabilities and confer in the design
of new legislation and regulation.
 Further collaboration between regulators and
business is then required to address the
inevitable challenges associated with the
implementation of legislation and regulation,
and to optimize intended benefits.

However, aligning priorities and agreeing on
focus areas will inevitably be a gradual process
and will require substantial input from both
public and private sector leaders.
 There are also immediate opportunities for
greater understanding and coordination at the
industry and/or regional level, as illustrated by
initiatives such as the Supply Chain Risk
Leadership
Council,
which
comprises
manufacturing and services supply chain firms
working together to develop and share supply
chain risk management best practices.

International Supply Chain Management

logistics, International logistics,and Supply Chain
Management

It is critical for government and businesses to
work together to understand risks to supply
chain and transport networks, and develop
new solutions and best practices for risk
management. Organizations have a great
opportunity to increase the resilience of global
networks, and key players within the public and
private sectors must move collaboratively
towards a new model of supply chain risk
management.
DATA AND INFORMATION SHARING


Access to accurate and reliable information
can ensure a clearer global picture of supply
chain networks’ vulnerabilities and support the
harmonizing of back-up plans in the event of a
disruption.
Identifying reoccurring risks at the industry level
can also help businesses and governments
focus efforts on increasing network resilience.
However, the availability of shared data and
information was identified as being
ineffectively managed.

Supply-Demand Management
"Make, Move, Store"
Plant
Plant
Customer
Relationship
Management
"Sell"
Warehouse
Plant
Managing the Move Side of a Business, by G.Jan Caller
Customers
Suppliers
Supplier
Relationship
Management
"Buy"
Improving the two-way flow of information
between businesses and government was
identified as a particular priority,
 Two specific actions could be suggested :
establishing reliable dashboards for macrolevel flows and disruptions through key
infrastructure; and increasing the flow of
information across end-to-end networks to
improve transparency at all tiers of the supply
chain.

RECOMMENDATIONS FOR GOVERNMENT
AND BUSINESS
As we mentioned earlier systemic supply chain
and transport risk should be more effectively
managed through multi stakeholder action
and collaboration.
 The key actors are the supply chain and
transport industry itself, its customers and
government.


Selling Directly to By G.J.caller
More explicitly assess supply chain and
transport risks as part of procurement,
management and governance processes
 Develop
trusted networks of suppliers,
customers, competitors and government
focused on risk management
 Improve network risk visibility, through two-way
information
sharing
and
collaborative
development of standardized risk assessment
and quantification tools


Collaboration and Quick Response, by
G.J.Caller
OPPORTUNITIES IN THREATS



From my point of view the biggest opportunity in SCM
would be again its threats and risk management.
Nowadays, the management's challenges are
increasingly formed from a complex network of
suppliers that can do threaten the business and the
creation of new opportunities for risk management.
To understand the supply chain risks which the
companies are faced to makes possibility for risk
managers to make more power to realize and
challenge against unexpected happenings. In the
unsecure and unstable terms of competitive
environment, recognizing of above mentioned risks
cause the adaptation and act as a strategic lever in
the organizations competitive process.
WHAT IS RISK?

Risk and its probability,
remarkably returns to the
beginning
of
written
human history. Nowadays
not only there is too many
dangerous situations, but
also the development of
modern technology has
brought about an exact
knowledge of probability
risk in these risky cases.
The new risks which have been relevant with
advancement of this trend. The key parameter
in this trend is regarded as a fact which
improves relating knowledge.
 At present, we have more information about
physics world as to 19th century and more than
20th century. Altogether, mechanization of the
most part of daily life has caused human being
enter to newer dangerous world.



At the same time, the available technology
makes us familiar with the instruments which
estimate and control probable risks and avoids
over all from them in all times.
Our understanding about the priority of human
being in behavioral psychology and economical
sciences help us to recognize the methods in
which, people can understand the probable risks
and control them in their life. With increasingly
modernized life, still the different ways are
necessary to divide the role and share of risks
between different organizations (Michael, 2003).
RISK MANAGEMENT
Risk management means recognition, analysis
and economical control of risks or probability
of risks which can threat properties and
economical incomes of companies.
 On the other hand, risk management is the
same system which is planned to order the
confronting operations against indetermination
and probable deviation (Fathi.et al, 2004).

CONCLUSION

To conclude I firmly believe that understanding
the risk implications of supply chain strategies
is an important area. Risk Managers should aim
to identify the perceived performance/
vulnerability trade-offs in supply chain
strategies and to support supply chain team by
providing appropriate tools to assess the
vulnerability of their supply chains.