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UT Knoxville BUAD 331 - Chapter 8 & 10

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Slide 1Managing Supply Chain ComplexityBoeing 787 Global Supply ChainRisk RiddleLightning Strikes…Impact of Supply Chain DisruptionTypes of SC RiskRisk ProfilingPlaying the oddsHindsight is 20/20Managing/Mitigating RiskCreating the Resilient Supply ChainSlide 13Global RiskSlide 15North AmericaUS Cargo Theft: 2006 - 2010Market Driven CrimeWhy Cargo Theft?Where Does It Go?Slide 21Slide 22Slide 23Slide 24Slide 25BA331-Supply Chain ManagementChapters 8 & 10Shay Scott, Ph.D.Department of Marketing and SCMManaging Director, Global Supply Chain InstituteUniversity of [email protected] Chain Management4Product ComplexityManaging Supply Chain Complexity© University of Tennessee 20139101Network Complexity2Process ComplexitySpeed of ChangeGeographic & Market Complexity38Information Complexity7Organizational Complexity65Customer ComplexitySupplier ComplexityRange ComplexityBoeing 787 Global Supply Chain3Risk RiddleWhat do orangutans, palm trees, and Kit Kat bars have to do with one another?Shay Scott4Lightning Strikes…5Source: Economist Intelligence Unit 2009Impact of Supply Chain Disruption6Types of SC Risk71. How vulnerable is the business to disruptions in supply?2. How volatile is demand?3. How resilient are our processes?4. How likely are disturbances and distortions to be caused by our own internal control systems5. Where across the supply chain are we vulnerable to external forces?Supply chain risk profile = Probability of Disruption * ImpactRisk ProfilingPlaying the odds•What would be your primary risk concern in these scenarios?–North Face sources its jacket production to a supplier in China–?EA Sports outsources coding of Madden Football 2011 to a subcontractor in India–?Pfizer Pharmaceutical makes Viagra at their facility in GreeceShay Scott9Hindsight is 20/20•1997-Toyota halted production for 20 days because a single supplier location burned•2000-Software glitch in demand planning software at Nike caused $100M in lost sales of Air Jordan shoes•2001-9/11 attacks shut down JIT assembly facilities all over the USShay Scott10Managing/Mitigating Risk•Mitigate through Redundancy–Inventory and capacity–Multiple facilities/suppliers–Pooled demand•Manage through Resilience–Postponement–Lean processes – speed and reliability–Improve visibility–Leverage supplier relationships–Control complexity and variability11Creating the Resilient Supply Chain©2013 Shay Scott, Ph.D.12Cargo Theft Riskamsterdam | austin | mexico city | penang | são pauloGlobal RiskNorth AmericaCargo crime modi operandi and targeting vary wildly across the continentUnited States: •Virtually no violence in cargo theft (less than 2% annually)•Theft rates up 4% from 2009Mexico: •Violence involved in approximately 80% of incidents•Explosive growth in cargo theft and supply chain risk (effects of drug violence included)Canada: •Slightly higher rate of violence then in US, but theft centered in a few major citiesUS Cargo Theft: 2006 - 2010Market Driven CrimeWhy Cargo Theft?Low Risk, High RewardCrime of opportunity – active targeting, but loads only stolen when left unattendedDivided entities (shipper, broker, forwarder, transporter, insurer…)Minimal citizen complaints = minimal law enforcement attentionJurisdictional issuesProsecution and sentencingWhere Does It Go?Back into the supply chainInternet sales (e-fencing) “Mom and Pop” outletsInternational consumption International repacking and returnStolen product shipped to Latin America/Europe for sale on local grey/black markets or for repackaging and return to the US legitimate marketCosta Rica, Columbia, Argentina, Brazil, Dominican Republic, Paraguay, VenezuelaAmgenDrugmaker2,000 U/mLCardinal 8,931 boxes2,000 U/mL AmerisourceBergen3,363 boxes2,000 U/mLJ&M PharmacareFL PharmacyBought 12,294 boxes2,000 U/mLGRAY MARKETAmgenDrugmaker2,000 U/mLCardinal 8,931 boxes2,000 U/mL AmerisourceBergen3,363 boxes2,000 U/mLJ&M PharmacareFL PharmacyBought 12,294 boxes2,000 U/mLArmando RodriguezFL Go-Between Jose GrilloAlleged FL Counterfeiter2,000 U/mL 40,000 U/mL Silvino MoralesRelabeled VialsGRAY MARKETPrinter in HialeahMade Counterfeit LabelsAmgenDrugmaker2,000 U/mLCardinal 8,931 boxes2,000 U/mL AmerisourceBergen3,363 boxes2,000 U/mLJ&M PharmacareFL PharmacyBought 12,294 boxes2,000 U/mLArmando RodriguezFL Go-Between Playpen SouthFL Strip Club Nick Just/Paul PeritoJose GrilloAlleged FL Counterfeiter2,000 U/mL 40,000 U/mL Silvino MoralesRelabeled VialsRebel Dist CAWholesalerY W Consultants Unlicensed FLWholesalerCoastal MedicalVA WholesalerTradewinds TradingTX WholesalerDouble JUnlicensed FLWholesaler Grapevine TradingOH WholesalerIvan VillarchaoFL AD Pharmaceutical FL WholesalerGRAY MARKETPrinter in HialeahMade Counterfeit LabelsMedix IntlCarlos Luis TX Shell Co.Armin MedicalNH WholesalerExpress RXEddie MorePremier Medical Group GA Shell Co.Optia MedicalMark NovoselUT Shell Co.Jemco MedicalFL WholesalerAmeRxSusan CavalieriFL WholesalerCSGTN WholesalerCSGTN WholesalerDialysist WestAZ WholesalerDialysist WestAZ WholesalerAmgenDrugmaker2,000 U/mLCardinal 8,931 boxes2,000 U/mL AmerisourceBergen3,363 boxes2,000 U/mLJ&M PharmacareFL PharmacyBought 12,294 boxes2,000 U/mLArmando RodriguezFL Go-Between Playpen SouthFL Strip Club Nick Just/Paul PeritoJose GrilloAlleged FL Counterfeiter2,000 U/mL 40,000 U/mL Silvino MoralesRelabeled VialsRebel Dist CAWholesalerY W Consultants Unlicensed FLWholesalerCoastal MedicalVA WholesalerTradewinds TradingTX WholesalerDouble JUnlicensed FLWholesaler Grapevine TradingOH WholesalerIvan VillarchaoFL AD Pharmaceutical FL WholesalerGRAY MARKETPrinter in HialeahMade Counterfeit LabelsMedix IntlCarlos Luis TX Shell Co.Armin MedicalNH WholesalerExpress RXEddie MorePremier Medical Group GA Shell Co.Optia MedicalMark NovoselUT Shell Co.Jemco MedicalFL WholesalerAmeRxSusan CavalieriFL WholesalerCSGTN WholesalerCSGTN WholesalerDialysist WestAZ WholesalerDialysist WestAZ WholesalerAmerisourceBergen KY Distribution Center1517 BoxesCVS, NYVictimAmgenDrugmaker2,000 U/mLCardinal 8,931 boxes2,000 U/mL AmerisourceBergen3,363 boxes2,000 U/mLJ&M PharmacareFL PharmacyBought 12,294 boxes2,000 U/mLArmando RodriguezFL Go-Between Playpen SouthFL Strip Club Nick Just/Paul PeritoJose GrilloAlleged FL Counterfeiter2,000 U/mL 40,000 U/mL Silvino MoralesRelabeled VialsRebel Dist CAWholesalerY W Consultants Unlicensed FLWholesalerCoastal MedicalVA WholesalerTradewinds TradingTX


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UT Knoxville BUAD 331 - Chapter 8 & 10

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