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Supply Chain Risk. Supply Chain Risk Management Analyze the risks –Probability –Impact Manage the risks –Prevention (avoidance) –Mitigation of the effects.

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Presentation on theme: "Supply Chain Risk. Supply Chain Risk Management Analyze the risks –Probability –Impact Manage the risks –Prevention (avoidance) –Mitigation of the effects."— Presentation transcript:

1 Supply Chain Risk

2 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)

3 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)

4 4 Assessing risks low high lowImpact Probability of occurrence Possible actions -Prevention -Mitigation

5 5 Vulnerability matrix low high lowValue at risk Probability of occurrence Source: Krajljic Possible actions -Priorities -Trade offs

6 6 Assessing your suppliers Leverage Routine Strategic Bottleneck low high lowSupply risk Strategic importance Source: Krajljic

7 7 Suppliers assessing you Exploitable Nuisance Core Development low high lowAccount attractiveness Relative value of business Source: Kraljic

8 Strategy into action Levels in version 2013 ThemeSalesSCMOperationsPurchasing Level 1 Reliability Service level Order deadline Shortage rule Safety stocks # Shifts # Pallet locations # FTE Delivery window Delivery reliability Level 2 Batches and frequencies Shelf life Trade unit Lotsizing in production and purchasing SMED Increase speedTrade unit Level 3 Speed and qualityPayment termsFrozen period Intake time Preventive maintenance Solve breakdowns training Raw materials inspection Supplier selection Payment terms Quality Transport mode

9 Extensions in version 2013 ThemeSalesSCMOperationsPurchasing Extension a S&OP Promotional pressure Category management Forecasting Production interval tool Resource selectionDual sourcing Extension b External collaboration Promotion horizon VMI Outsourcing warehouse (MCC) Inflate PET VMI Supplier development Extension c CO 2 footprint Sustainabilty CO 2 slaDecrease of water usage Decrease of energy usage Decrease of start up productivity loss Extension d KPIs and targetsKPI selection Extension e Supply chain risk management Risk events Relaunch (horizon) Scenarioplanner Tracking & tracing Quarantine Risk events Pooling warehouse FTE Contract duration Supplier development Dual sourcing Risk events


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