SCM 14: Supply Chain Risk and Security

supply chain security system response

- basic: physical/personnel security - reactive: larger security organization - proactive: director of security - advanced: customer/supplier collaboration, learning from the past

security in-transit

- cargo theft is a big problem - challenges: insurance limits, hours of service rules, driver shortages - adopt progressive security programs at the point of departure - use active monitoring in transit including partnerships with law enforcement - penalties for cargo theft need to be strengthened

security mgmt collaboration

- contractual requirements - standards of care - use of law enforcement

risk management

- coordinated set of activities and methods used to direct an org to control risks - process includes identifying, assessing, prioritizing, tracking and monitoring risk areas and developing/implementing risk mitigation plans

mitigating supply chain risks

- holding/increasing safety stocks --> can be costly, may be used as a stopgap alternative - identify, qualify and est, backup suppliers and logistics services --> can create ill will with current suppliers, takes time to build relationships, may be used as either emergency sourcing/multi-sourcing - diversifying the supply base - share info between supply chain partners - develop a formal risk mgmt program

supply chain security

- involves reducing the risk and impact of intentionally created disruptions in supply chain operations - application of policies, procedures and technology to: ~protect assets, etc. from theft, damage or terrorism ~prevent the introduction of unauthorized contraband, etc. ~protect customers, the public, and brand equity

risk

- probability of damage, liability, loss, or other negative occurrence that is cause by either an internal/external vulnerability - may be mitigated or avoided through preemptive action

supply chain risk facts

- supplier failure is seen as the #1 threat - top 3 disruptions: weather, unplanned IT/telecommunication outages, failure of service provision

supply chain resiliency

- the ability to withstand and recover from an incident - resilient supply chains are proactive in preventing/responding to security incidents and and quickly rebuild/reestablish alt. means of operations

supply chain risk management

- the coordination of activities to direct and control an enterprise's end-to-end supply chain with regard to supply chain risks - should be collaborative --> communication and transparency is critical - actively manage vulnerabilities - risks aren't static --> must be continually managed

supply chain risk

- the likelihood and consequence of damage, liability, loss, or other negative events at any point in the end-to-end supply chain, from sources of raw materials to the end use by customers

supply chain risk and challenges

risks: - forecasts are inaccurate - suppliers don't always deliver on time - supply can get rejected, damaged, etc - natural disasters happen challenges: - economic pressures - globalization and geopolitics - regulatory, quality, compliance, and reliability - environmental pressures - market volatility - formal risk mgmt approach can provide a competitive advantage