Mitigation of Supply Risk Using Big Data Analysis

Transcription

1 Mitigation of Supply Risk Using Big Data Analysis Presented by: Mateusz Borowiecki, CEO - OptiBuy

2 Quick Facts 56% Of Supply Chain executives do not have access to real time reporting 50% Of Supply Chain executives have limited knowledge of risk and compliance issues 13% Do not have complete end-to-end visibility of supply chain Key Facts and Figures 80% Of all cyber breaches occur in the supply chain 59% Claims commodity price volatility as major risk concern 9 Feb % are concerned about quality issues and regulatory issues from supply base Sources: 1) Supply Chain Risk Management: Overview for ALM Intelligence, KPMG ) Integrating Cybersecurity into Supply Chain Risk Management, National Institute for Standards (NIST), 2016

3 Types of Risks Risks Strategic Risk Tactical / Operational Risk Political / Geographic Risk Management Drives Effectiveness 9 Feb 2011 Management Drives Efficiency Management Drives Continuity

4 Risks Strategic Risk High Profit impact Leverage components (your bonus depends on them) Strategic components (everybody has an opinion how to organize them better) Low profit impact Non-critical components (nobody cares as long as they are there) Bottleneck components (troubles ahead) 9 Feb 2011 Low supply risk / Multiple suppliers / simple to buy HIgh supply risk / SIngle supplier / difficult to buy

5 Case 1 Packing Metal Strip - Problem Issues Single supplier delivering single product Occasional quality issues Increasing price

6 Case 1 Packing Metal Strip - Solution Solution Changing specification and replacing the metal strip with the plastic strip Much wider choice of suppliers Became part of the portfolio of the main packaging supplier Bonus: price reduction of >50%

7 Case 2 Legacy Programming Technology - Problem Problem One of the key IT system of an insurance company was based on the legacy Oracle Forms software stack Constant issues in finding good developers Ever rising prices of development (400 EUR/Manday)

8 Case 2 Legacy Programming Technology - Solution Solution After deep TCO analysis of system s life cycle, rewriting of system using widely available Java technology was decided Cost of development decreased to EUR/day System was added to the portfolio on one of the two main IT suppliers of the client

9 Case 3 Maintenance Services - Problem Problem Machines on the shop-floor were undergoing small amendments across the years Most modifications were made by external specialist service firms Little documentation was existing Production department was relying on multiple small service suppliers that could charge any fee they request

10 Case 3 Maintenance Services - Solution Solution General maintenance provider was selected The first step was to make reverse documentation of each machine [huge work ] Standardized hourly rates for maintenance services were agreed Keeping documentation updated was part of SLA The provider became a strategic partner of production and maintenance departments

11 Spend Risks Tactical / Operational Risk Operational Tactical Spot Buy Not sourced Strategic RFQs No category management RFX/Auctions Catalogues Defined category management Management Tactical Time Supply Planner Operational Shop Floor Procurement Personnel Activity Frequency Days-months Hours-days Big Data Benefits - Trend Detection - Predictive Analytics - Business Planning - Tracking activities to plan - Exception Detection - Notification & Resolution - Shop Floor Control - Supplier collaboration

12 Example - IBM IBM s approach to contain risks in supply encompassed strategic, tactical and operational initiatives as presented in the pyramid Strategic Sourcing Strategic Global Sourcing Aggregate Sourcing Value Engineering Supplier Relations Management Tax Chain Tactical Skill Upgrading Outsourcing e-procurement Operational

13 Level of Engagement in Global Strategy Risks Political / Geographic Risk Strategic Global Sourcing International procurement as a part of strategic sourcing Demand driven international sourcing Local Supplier Market Sources: 1): Monczka & Trent (1991) 1900 Time 2010

14 Example Apple Supplier Base Sources: 1) Apple

15 Small Big Potential Advantage Potential benefits vs Sourcing Risk Russia Ukraine Vietnam Romania Brazil Turkey China Slovenia Poland Italy Thailand India Portugal Czech Rep. Germany Taiwan Korea USA Japan Risks - Economic: Currency fluctuation, fuel crisis - Social: Language barrier, corruption, crime - Political: Instable government, war, terrorism - Ecological: Natural disasters - Supplier performance: Poor or decreased quality, long-time for delivery, cost increase - Others: Example protection of intellectual property Big Sourcing Risk Small

16 Global Risks Landscape Weighted Average Score (where 7 = maximum) Sources: 1) World Economic Forum Global Risks (2015)

17 Example Sony

18 Contact Data Mateusz Borowiecki CEO / Founder Tel: OptiBuy Sp. z o.o. ul. Jana Kazimierza Warszawa, Polska mateusz.borowiecki@optibuy.com