The Chartered Institute of Procurement & Supply (CIPS) has launched a free online tool to support procurement and supply management professionals and those with an interest in buying to develop resilience in their own supply chains.
A CIPS survey in 2016 of 900 professionals revealed a growing awareness that unmitigated risk can have disastrous consequences for companies in terms of revenue and impact on margins.
Of those surveyed, 46% ‘sometimes’ have mitigation strategies in place and yet 52% expected the same level of service from their suppliers in the event of a disruption.
The Risk and Resilience Online Assessment Tool helps procurement professionals to identify where specific risk exists in their supply chains in seven key areas:
- Geographical. Restrictions on commodities or trade tariffs can have devastating effects on supply chains along with environmental concerns and reputational damage.
- Functional. Poorly conceived strategies and poor systems controls can make critical parts of the supply chain high risk.
- Performance. Suppliers may be engaging in bad working practices or failing to provide the right product, at the right time, to the right place.
- Technical. An inadequate level of internal security surrounding IT systems could lead to cyber risk and loss of customer, or partner data and loss of revenue.
- Governmental. Actions from governments could influence the movement of goods, with sanctions and embargoes and could affect reputation if found to be supportive of human rights abuses.
- Ethical. Dents in customer confidence will affect revenue streams and reputation, disaffected workforces can produced delayed, poor-quality goods.
- Legal. Breach of laws and statutes will cause delays and issues in supply chains. Diligence is required to ensure suppliers and contractors are also compliant.
Earlier this month, Clarkson University’s Global Supply Chain Management (GSCM) program presented its 17th annual Executive Seminar, delivering state-of-the-art education to corporate professionals.
“We are pleased that our executive seminar continues to attract supply chain professionals from several highly respected global companies,” said Professor Farzad Mahmoodi, the Joel Goldschein ’57 Endowed Chair in Global Supply Chain Management and director of the program. “It’s a strong endorsement of the quality of our faculty and the relevance of our curriculum.”
The annual, four-day, on-campus program attracted participants from Amazon, Toyota, Stanley Black & Decker, Xerox, Lockheed Martin, Verizon, Corning, Raymond Corporation, Entegris, Par Technology and Indium.
The participants came to Clarkson from 12 states: California, Colorado, Connecticut, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York and Ohio.
In addition to lectures by faculty experts, the seminar utilized a highly interactive format that employs team and hands-on activities, including simulations and negotiations exercises. Participants also benefited from networking opportunities with industry professionals and Clarkson faculty.
As the reliance of The Defense Department and its major contractors on vast global supply chains to provide the systems and weapons the DOD needs to perform its mission increases, so too does the risk. These potential risks come in many forms: the financial failure of a critical supplier; a supplier in violation of labor or environmental standards; or foreign infiltration into critical systems. The government is pushing contractors to provide more information about their supply chains, and this analysis will walk you through the supply chain of DOD’s (and the federal government’s) largest contractor, Lockheed Martin Corp., and uses it as an example of how Bloomberg can help you identify and report on potential risk areas.
It is possible to identify 350 of Lockheed’s suppliers by using the supply chain function SPLC on the Bloomberg Professional Service. Bloomberg’s entire supply chain database contains more than 1 million customer/supplier relationships. The same data also shows that some of these companies are highly reliant on Lockheed as a customer. Quickstep Holdings Ltd., a manufacturer of composite materials based in Australia, receives an estimated 70 percent of its revenue from Lockheed. Any change in Lockheed’s fortunes could have downstream effects on highly dependent suppliers like Quickstep.
For the Pentagon, Honeywell International Inc. is a much more critical supplier than Quickstep. Honeywell is a top 10 supplier to Lockheed as well as the other big five defense contractors: Boeing Co., General Dynamics Corp., Northrop Grumman, and Raytheon Co. Many defense programs could be disrupted, and alternative products and suppliers might be difficult to find if Honeywell’s goods and services were suddenly compromised.
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It’s been written that a career in supply chain management can be like climbing a mountain.
While there is often a map for the path forward in professions like accounting, medicine and the law, in supply chain management – as with mountaineering – there are any number of paths that can reach the summit.
Those were among the findings from a research series conducted for the Council of Supply Chain Management Professionals (CSCMP) and published in the July/August 2015 issue of Supply Chain Management Review, and reinforced by research conducted by McKinsey & Company and Kuhne Logistics University.
The latter, for instance, found that while many supply chain management executives had experience in logistics, procurement and sales/marketing, “… a surprising number of supply chain executives are appointed without any previous exposure to SCM…in our sample, supply chain executives spent 88% of their previous career span outside the SCM function.”
Are those findings consistent with readers of Supply Chain Management Review and members of APICS Supply Chain Council? And, if so, who is today’s supply chain manager? And, how did he – or she – navigate to their position on the mountain?
Did they start out in the supply chain going back to their college days, or, as in the McKinsey study, did they come into the profession from other parts of the organization?
Moreover, what are their duties today and how do they see the job changing?
Read more at A Portrait of the Supply Chain Manager
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Corporate Performance Management (CPM) activities time-consuming and labour-intensive, usually because they rely on spreadsheets, old data and outdated manual processes. With financial controls growing increasingly tighter, CPM must be performed effectively. Recently there has been talk of needing Finance and Supply Chain integration to achieve increased corporate performance with them now being key business partners.
The Corporate Performance Management Summit will take place on January 27 & 28, in Miami. Over the two days, the summit will gather over 120+ Finance & Supply Chain professionals to discuss the challenges related to internal performance management and external decision-making. There will be 25+ industry expert keynote speakers, interactive workshops with industry pioneers and over 8 hours of networking opportunities to take advantage of.
Ever considered how to execute performance management initiatives? How to manage external factors in performance management? Or even the role of the CFO in corporate strategy? The summit will explore hot topics such as these, as well as explicitly covering how CFOs can drive strategic performance through acquisitions and harness data to drive decision making. A key component to this summit will also be face-to-face communication and the opportunity to learn from your peers in a truly open environment. ‘The creation of a thought-sharing and interactive setting was always a key aspect for me when creating this summit,’ said Aaron Fraser, International Events Director. ‘I wanted to cultivate a forum for cross-pollination of ideas and advice for those involved in corporate performance management”.
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At JDA’s Focus event, Rich Beck, the Sr. Vice President of Global Operations at PepsiCo, gave the keynote on the second day of the conference. Rich said that their supply chain goals included “digitizing the value chain” (JDA was a key solution provider in this area) and “sustainability.”
I’ve been covering supply chain management for twenty years. Last year, I spent 20 percent of my time on the road. And I hear many, many supply chain speeches. I can count on a few fingers of one hand the number of supply chain executives I have heard say sustainability was one of their major goals.
That will change. 72% of the companies included in The S&P 500 Index® publish sustainability reports, up from just under 20% in 2011. Over time, companies’ sustainability efforts become more mature and corporate sustainability goals filter down and become key supply chain goals as well. And these are not incompatible goals. At PepsiCo supply chain sustainability includes “reducing their inputs while optimizing outputs;” but really, that has always have been a goal for supply chain organizations.
The CDP, formerly the Carbon Disclosure Project, is the best known of the organizations that are helping (or pressuring, depending on your point of view), companies to do better. Thousands of companies work with the CDP to measure, disclose, manage and share environmental information.
The CDP scores companies on their performance. “A high performance score signals that a company is measuring, verifying and managing its carbon footprint, for example by setting and meeting carbon reduction targets and implementing programs to reduce emissions in both its direct operations and (the extended) supply chain.” Companies score higher if they are focused not just on internal emissions, but the emissions caused in their extended value chain. This causes a ripple effect as big companies with sustainability goals request their suppliers to also reduce their emissions.
What is your opinion towards “sustainability”? Do you think it is a priority? Share your thoughts with us in the comment box below.