1. No category

Supply Risk Assessment
Process
The Supply Risk Model
CAUSES
DISRUPTION
EVENTS
(Categories of
Predictive Measures)
Misalignment of
Interests
Relationship
Quality, Delivery,
Service Problems
Supplier Attributes
Performance
Human Resources
Supplier Union Strike,
Ownership Change,
Workforce Disruption
Situational
Factors
Supply Chain
Disruption
Financial Health
Environmental
Supplier Locked
Tier II Stoppage
Supplier Bankruptcy
(or financial distress)
Disasters (Weather,
Earthquake, Terrorists)
CONSEQUENCES
(Impacts)
Sudden Loss of
Supplier
Finished Goods
Shipments Stopped
Recall for
Quality Issues
Locate and Ramp Up
Back up Supplier
Emergency Buy
and Shipments
Emergency Rework
and
Rushed FG Shipments
Reputation
Market Share Loss
Copyright© 2007 DRK Research and Consulting LLC
EFFECTS
Revenue
Losses
and
Recovery
Expenses
OTHER
IMPACTS
Foregone
Income
Supply Risk Assessment - Units of Analysis
Supply Chain Network/Commodity Category
Interactions and Relationship
s
Performance
Relationship
s
The customer’s reputation
with suppliers is also a
critical factor.
s
Supplier Environment
SC
Network
Organizer
s
s
Environmental
Geographic, market,
transportation, etc.
s
Supplier Attributes
Human Resources
s
Supply Chain
Disruption
Financial Health
Copyright© 2007 Supply Chain Redesign, LLC
Supply Chain Risk Assessment
Process
Week 0
Week 1-2
Week 3-4
Week 5-6
Week 7
Week 8
Week 7
1.0 Kick off
Note:
Cycle Time – 6-8 weeks
1 Category = 30 suppliers
2.0 Preparation
Supplier Information Set Up
Internal Information Set Up
Assessment Team
Follow up
- Manual Process
- IT Enabled Process
3.0 Data Collection
- Combination
Set up Survey
Internal Data
Survey
Data
Collection
4.0
Analyze
5.0 Report
Review Team
Validate
Provide Set up
information
Category Manager
and Suppliers
Kick Off
Review/
Validate
Preliminary
Data
Survey Review
& Event
Probability
Subject Matter Experts
and Suppliers
Preparation
Data
Collection
Report
ID and Begin
Mitigation
Category Manager
and Risk Manager
Analyze
6.0
Mitigate
Report
Category Manager
and Risk Manager
Mitigate
Risk Wheel
Diagnostic
Analytical
Supplier Risk Wheel: Supplier Example
Union Strike Risk
1 Highly unionized production
facilities
Disaster Risk
1 Transportation mode and
route may cause disruption
Service Risk
1 Low number of engineers
assigned to company parts
Delivery Risks
1 Planned capacity decrease
2 Relatively low number of
production employees assigned to
company parts
3 Inventory status information is
not shared with company
4 Medium to low ability to satisfy
demand fluctuations with 5 week
notice
Quality Risk
1 Relatively low number of
production employees in the
process for company
2 Six month supplier rating is
medium
3 Medium likelihood of quality
problems affecting company
Exercise Teams
Commodity Teams
Risk Management
Supplier Improvement
Strategic Sourcing
www.neuratool.com
User: freightliner
Password: freightliner
1
2
3
4
5
6
Supplier Teams
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Supplier 7
www.neurasurvey.com
User: supplier 1
Password: freightliner
Finished Product
Portfolio View
FTL Revenue Impact by Supplier
Spend Analysis
Supplier
Revenue Impacted (000's)
Percent of Total
2005 Spend
Percent of Total
AD Plastics
$2,879,762
2.0% $710,626
0.5%
Supplier 1
$2,800,000
$100,000
Supplier 2
$7,000,000
$3,000,000
Supplier 3
$3,000,000
$5,000,000
Supplier 4
$6,000,000
$2,000,000
C Products
$4,766,938
3.3% $605,000
0.0%
DK Company
$6,241,090
4.3% $2,832,093
2.0%
Supplier 5
$1,316,054
0.9% $9,004,424
6.2%
Supplier 6
$625,258
0.4% $20,658
0.0%
Con Co
$8,209,295
5.7% $54,933,867
38.1%
Doug Co.
$8,738,330
6.1% $1,121,308
0.9%
End Co.
$6,612,661
4.6% $440,086
0.3%
Guard Co.
$2,879,762
2.0% $924,432
0.6%
Supplier 7
$8,000,000
$1,000,000
Supplier 8
$1,316,054
0.9% $101,804
0.1%
Kas Co
$7,652,221
5.3% $1,674,475
1.2%
Suplier 9
Kurz Co.
$1,149,406
0.8% $5,579
0.0%
Lac Co.
$4,992,914
3.5% $10,338,144
7.2%
Lomg Co.
Ma Co.
$7,686,293
5.3% $7,531,394
5.2%
Mer Co
$6,314,461
4.4% $2,025,549
1.4%
Norm Co.
$625,258
0.4% $22,854
0.0%
Ny Co.
$1,596,634
1.1% $232
0.0%
Ol Co.
$4,815,657
3.3% $1,652
0.0%
On Co.
$8,095,335
5.6% $2,141,434
1.5%
Pa Co.
$32,926
0.0% $4,739
0.0%
Plas Co.
$2,086,710
1.4% $1,824,515
1.3%
Pol Co.
$5,296,607
3.7% $3,214,140
2.2%
Pur Co.
$32,926
2.2% $116,661
7.7%
Rev Co
$625,258
0.4% $21,777
0.0%
So Co
$523,002
34.5% $40,840
2.7%
South Co.
$625,258
0.4% $66,671
0.0%
SP Co
$1,515,599
1.1% $159,597
0.1%
Su Co.
$1,563,708
1.1% $249,647
0.2%
Sur Co.
$1,563,708
92.3% $109,621
6.5%
Tru Co
$1,693,629
1.2% $179,242
0.1%
Vis Co
$1,563,708
1.1% $7,080,074
4.9%
Wi Co
$2,831,653
2.0% $176,284
0.1%
Plas Eng Co.
Wil Co
$8,848,539
6.1% $11,000,000
7.6%
Wil Therm Co
$523,002
0.4% $31,303
0.0%
Wil IMP Co.
$1,563,708
1.1% $34,916
0.0%
$144,203,324
209%
$129,845,639
99%
Agenda
Time
1:45 – 2:15
Topic
Asses the supply network
2:15 – 2:30
2:30 – 3:30
Break
Develop Reports and analyze
the data
2:30 – 3:30
Diagnose the network and
identify mitigation actions.
3:30 – 4:00
Report out and wrap up
-
How
- each team will complete their part
of the supply network risk
assessment.
Outcomes
Completed assessment of the
supply network
- each team will build their reports
and analyze the data using the
SCRD model
Participants are able to explain
how they used the SCRD
model components to describe
a measure supply chain risk.
Participants are able to explain
how they used the SCRD
model components to diagnose
a supply chain network
Participants are able to explain
how they used the SCRD
model components to diagnose
a supply chain network obtain
feedback
- breakout exercise diagnosing the
results of the assessment and
building mitigation action plans.
-
4:00
Adjourn
each team presents their
results.
Q and A