Adapt to Survive Supply Chain Disruptions

Transcription

1 Adapt to Survive Supply Chain Disruptions Mark Morley, Industry Marketing Director

2 Today s Agenda How Are Today s Global Supply Chains Being Impacted? Managing Business & Operational Risk Minimising Supply Chain Risk Through Operational Changes How Can B2B Help Minimise Supply Chain Risk? Slide 2

3 How Are Today s Global Supply Chains Being Impacted? Slide 3

4 Supply Chain Disruption is Becoming a Recurring Theme. Today s supply chains need to be highly resilient, scalable and flexible to meet the challenges of doing business during a period of significant disruption Slide 4

5 Icelandic Volcano Much of Europe s airspace was shutdown due to the spread of volcanic ash in the atmosphere. As a result, global air freight shipments were severely affected. Slide 5

6 Japanese Earthquake Japan s East coast was severely impacted by the earthquake, many factories and utility infrastructures were destroyed and logistics networks ground to a halt. Slide 6

7 Japanese Tsunami The Japanese Tsunami caused more longer lasting damage to Japan s infrastructure and as a result supply chains have been impacted for more than 12 months. Slide 7

8 Thailand Floods Many high tech companies were impacted by the Thai floods, at one point it was estimated that up to 90% of the world s supply of hard disks had been affected. Slide 8

9 Thailand Floods Honda s factory was severely affected by the floods and as a result millions of dollars worth of cars had to be written off. Honda is now re building the plant. Slide 9

10 Somali Pirates Somali pirates have hijacked oil tankers and container ships. Goods exported from the West coast of India have had to be re routed around the problem areas. Slide 10

11 Sinking of the Rena Container Ship Ocean freight is susceptible to disruption when a major container ship runs in to trouble. Most of the containerised cargo has to be written off. Slide 11

12 Sinking of MSC Napoli BMW Customer Services Sorry Sir, we cannot seem to trace your new motorbike which was enroute from our factory in Germany! Slide 12

13 Chinese Restriction on Export of Rare Earth Materials China controls up to 90% of the world s rare earth materials. Government export restrictions impacted the shipment of components across high tech supply chains. Slide 13

14 UK Strike by Fuel Tanker Drivers UK businesses disrupted by potential wildcat strikes by 2000 fuel tanker drivers. The retail and grocery industry is always first to feel the pain. Slide 14

15 Factory Explosion Causes Global Shortage of Nylon Explosion at Evonik Industries factory in Germany causes global shortage of CDT, a key ingredient of PA12 which is widely used across the automotive industry. Slide 15

16 Managing Business and Operational Risk Slide 16

17 Business & Operational Risk and their Domino Effect Source: Global Risk Report 2012 World Economic Forum Slide 17

18 Example of Organisation Resilience Based on 18 Metrics Slide 18

19 Types of Supply Chain Risk Source: APICS 2011 Supply Chain Risk Report Slide 19

20 How Well Do You Know Your Supply Chain? Source: APICS 2011 Supply Chain Risk Report Slide 20

21 Minimising Supply Chain Risk Though Operational Changes Slide 21

22 Implement Operational Changes Near Shoring Establish a Global Plant Floor Shift Production to New Locations Map Out Supply Chains/Networks Introduce Dual Sourcing Strategies Implement Control Towers/Crisis Management Centres Appoint a Business Continuity Manager Slide 22

23 Near Shoring Started to appear in 2009 Initially introduced to help shorten logistics networks Recent natural disasters are encouraging more companies to move production or sourcing nearer to home markets Slide 23

24 Caterpillar Moves Production Back to North America Slide 24

25 Establish a Global Plant Floor Some manufacturers have been quick to establish alternative production locations These new locations help to spread the risk so that if one plant goes offline, production can continue at an alternative location Slide 25

26 Honda Moves Design and Production of NSX Supercar to North America Slide 26

27 Shifting Production to a New Location Following the Japanese Earthquake, other countries started to encourage companies to relocate research/production Many governments saw this as a good opportunity to encourage inward investment Significant investment in new infrastructure/technology parks Slide 27

28 Taiwan Emerges As Alternative Location for Japanese Manufacturers Slide 28

29 Mapping Out Supply Chains Many manufacturers have started to map out their entire supply chains Helps to locate weaknesses in the supply chain and identify key suppliers Once mapped out, contact info and supply chain relationships need to be maintained Slide 29

30 Researcher Spends 3 Years Mapping Out Suppliers For Centre Console Slide 30

31 Dual Sourcing Strategies Disruption across supply chains has led to alternative suppliers needing to be identified quickly Identifying alternative source of components/parts helps to minimise production disruption Manufacturers are also likely to start increasing buffer stocks Slide 31

32 Implementing Control Towers/Crisis Management Centres Many manufacturing companies have implemented control towers to monitor end-to-end visibility of global shipments Recent natural disasters have led to control towers doubling up as crisis management centres Slide 32

33 Appoint a Business Continuity Manager Increasing demand for Business Continuity Managers Also known as Masters of Disaster! Central point of contact during a period of disruption Increased regulatory compliance requires more thorough business continuity plans Being unprepared is bad for business Slide 33

34 How to Minimise Supply Chain Risk Improve management of contact information Increase day to day interaction and collaboration with suppliers Understand the structure of your supply chain Review mass communication procedures Near Shoring, Global Plant Floor, Shift Production, Map Supply Chains, Dual Sourcing, Control Towers, Business Continuity Management Introduce crisis management process Slide 34

35 How Can B2B Help Minimise Supply Chain Risk? Slide 35

36 How Can B2B Help to Minimise Supply Chain Risk? Provides Scalability & Flexibility Offers End to End Visibility Provides Information Management & Communications Slide 36

37 Using Community Management Tools to Increase Organisational Resilience Information Management & Communication Slide 37

38 Community Management Strengthens Information Management How do you currently manage the contact information across your trading partner community?, is your business ready to respond to the disruption or change? Key Requirements:- Centralised B2B Contact Directory Self Service Access Registration Workflow Slide 38

39 Community Management Improves Command and Control How long would it take to assess the condition of your supply chain following a crisis / natural disaster?, How quickly could you identify an alternative supplier? Key Requirements:- Mass Broadcast Communication Secure Surveys & Web Forms Real-Time Visibility & Follow Up Slide 39

40 Community Management Minimises Supply Chain Risk Do you have the IT infrastructure in place to assess, manage and mitigate supply chain risk? Key Requirements:- Risk Surveys & Assessments Scoring & Weighting Mitigation & Corrective Action Workflow Trading Partner Risk Database Slide 40

41 GXS RollStream Helping to Increase Supply Chain Resilience Your Enterprise Systems Your People CONTRACT MANUFACTURERS SUPPLIERS Community Information Management DISTRIBUTORS Relationship & Performance Onboarding & Self service CUSTOMERS Registration Workflow CARRIERS & 3PLS Collaborative Dispute & Issue Management B2B Operations Automation Validation Visibility & Control Compliance, CSR & Risk Unified Communications FINANCIAL INSTITUTIONS Line of Business Sourcing & Procurement Supply Chain Compliance Corporate Partner Mgmt. INSURERS Slide 41

42 On-boarding and Compliance North America Multiple acquisitions in recent years had led to a need to automate interactions with their vendor community. Implemented a community management tool to: Improve the way in which contact information was managed across 100,000 trading partners held within Oracle Automate the registration process for up to 100 vendors per day Slide 42

43 Thank You! Is Your Supply Chain Prepared? May 25, 2012 Slide 43

44 Thank You for Your Participation TM For More Information GXS web sites Phones US: EMEA: US: , option 3 EMEA: +44 (0) Slide 44