Supply Chain RiskForms of RiskRecent EventsCost Minimization ApproachCost RealitiesNetwork DependenciesFragile Chains/NetworksWhat To Do About RiskConsulting FirmsAcademic ThoughtMisinterpretationRisk SpiralRisk SummarySourcesSupply Chain RiskSupply Chain RiskDavid JosleynDavid JosleynMatt RevelleMatt RevelleForms of RiskForms of RiskIndustrial Plant FiresIndustrial Plant FiresLoss of Intellectual PropertyLoss of Intellectual PropertyWork Slowdowns or StoppagesWork Slowdowns or StoppagesNatural DisastersNatural DisastersPayment/Credit/InsolvencyPayment/Credit/InsolvencyGeopolitical IssuesGeopolitical IssuesDemand ChangesDemand ChangesETC…ETC…Recent EventsRecent Events1995 Kobe Japan Earthquake1995 Kobe Japan EarthquakeWest Coast Longshoreman StrikeWest Coast Longshoreman StrikePoor Software ImplementationPoor Software ImplementationNike’s Child Labor IssueNike’s Child Labor IssueLand Rover’s Supplier LeverageLand Rover’s Supplier LeverageHurricane KatrinaHurricane KatrinaWhy Important Now???Why Important Now???Cost Minimization ApproachCost Minimization Approach1.1.Supplier Supplier CertificationCertification2.2.Social Social Responsibility Responsibility 3.3.The Role of Ports The Role of Ports in USA Trade in USA Trade 4.4.Third Party Third Party Logistics Logistics 5.5.RFID RFID 6.6.BPO to India BPO to India 7.7.The Virtual Chain The Virtual Chain 8.8.How Many How Many Suppliers do You Suppliers do You Need Need 9.9.Creating a Diverse Creating a Diverse Supply Base Supply BaseCost RealitiesCost RealitiesCost Minimization Can Lead to Over-Cost Minimization Can Lead to Over-Concentration of ResourcesConcentration of ResourcesJIT, Lean Global Dispersion, Single JIT, Lean Global Dispersion, Single Source SuppliersSource SuppliersSimilar to an Undiversified PortfolioSimilar to an Undiversified PortfolioSuccessful When Status Quo RemainsSuccessful When Status Quo RemainsVery Sensitive to Changes or ExceptionsVery Sensitive to Changes or ExceptionsNetwork DependenciesNetwork DependenciesLimited Vertical IntegrationLimited Vertical IntegrationSlave to Internal NetworksSlave to Internal NetworksSupply Chains Supply Chains  Supply Networks Supply NetworksLinear Linear  Complex ComplexSearch for Competitive Advantage has led Search for Competitive Advantage has led to More Aggressive Business Trendsto More Aggressive Business TrendsJIT, Customization, Low Cost AdvantageJIT, Customization, Low Cost AdvantageThinking Globally, E-CommerceThinking Globally, E-CommerceFragile Chains/NetworksFragile Chains/NetworksOver-Concentration Over-Concentration Amplification of Risk Events Impact Amplification of Risk Events Impact Examples:Examples:Land Rover Chassis’Land Rover Chassis’Longshoreman StrikeLongshoreman StrikeToyota FireToyota FireWhat To Do About RiskWhat To Do About RiskIgnore/AcknowledgeIgnore/AcknowledgeMitigateMitigateTransferTransferAcceptAcceptConsulting FirmsConsulting Firms6 Steps to Managing Risk6 Steps to Managing Risk18 Ways to Guard Against Disruption18 Ways to Guard Against DisruptionCore Risks 4 Next StepsCore Risks 4 Next StepsSoftware Solves AllSoftware Solves AllAnalytical Risk MitigationAnalytical Risk MitigationAcademic ThoughtAcademic ThoughtAccurate Information/Accessibility Accurate Information/Accessibility VisibilityVisibilityFlexibility (Lean vs. Agile)Flexibility (Lean vs. Agile)Contingency PlansContingency PlansDiversify Supply Chain PortfolioDiversify Supply Chain PortfolioSupplier Supplier RelationshipsRelationships Are Key Are KeyMisinterpretationMisinterpretationHolding Excessive InventoryHolding Excessive InventoryInflated Production TimesInflated Production TimesParkinson’s LawParkinson’s LawIncreasing Delivery Time for Increasing Delivery Time for CustomersCustomersLow-Quality Domestic SuppliersLow-Quality Domestic SuppliersRisk SpiralRisk SpiralRisk SummaryRisk SummaryRisk is EverywhereRisk is EverywhereCost Reduction Increases Risks Cost Reduction Increases Risks ProbabilityProbabilityReduction of Risk is Relationship Reduction of Risk is Relationship DependantDependantSourcesSourcesSupply Chain Risk: Deal With It - Harvard Business School Supply Chain Risk: Deal With It - Harvard Business School Working Knowledge, April 28, 2003Working Knowledge, April 28, 2003Risk and Reward in Supply Chain Management - Harvard Risk and Reward in Supply Chain Management - Harvard Business School Working Knowledge, August 29, 2005Business School Working Knowledge, August 29, 2005Supply Chain Confidence – Martin Christopher and Hau L. Supply Chain Confidence – Martin Christopher and Hau L. Lee, November 6, 2001Lee, November 6, 2001How to Identify and manage Supply Risk (Part 1 and 2) - How to Identify and manage Supply Risk (Part 1 and 2) - www.supplychainplanet.comwww.supplychainplanet.com, (Part 1)October 2003 (Part , (Part 1)October 2003 (Part 2)November 20032)November