5-supply risk assessment process

8/2/2019 5-Supply Risk Assessment Process

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Supply Risk Assessment

Process


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Performance

CAUSES(Categories ofPredictive Measures)

DISRUPTIONEVENTS

CONSEQUENCES(Impacts)

Human Resources

Supply ChainDisruption

Financial Health

Environmental

Relationship

Quality, Delivery,

Service Problems

Supplier Union Strike,Ownership Change,Workforce Disruption

Supplier LockedTier II Stoppage

Supplier Bankruptcy(or financial distress)

Disasters (Weather,Earthquake, Terrorists)

Misalignment ofInterests

Finished GoodsShipments Stopped

Locate and Ramp UpBack up Supplier

Emergency Buyand Shipments

Reputation

Market Share Loss

EFFECTSRevenueLosses

andRecoveryExpenses

OTHERIMPACTSForegoneIncome

Emergency Reworkand

Rushed FG Shipments

Recall forQuality Issues

Sudden Loss ofSupplier

Copyright 2007 DRK Research and Consulting LLC

SupplierAttributes

Situational

Factors

The Supply Risk Model


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s

s

s

s

s

s

s

SCNetwork

Organizer

Interactions and Relationship

Supplier Attributes

Supplier Environment

Supply Chain Network/Commodity Category

Supply Risk Assessment - Units of Analysis

Copyright 2007 Supply Chain Redesign, LLC

Performance

Human Resources

Supply ChainDisruption

Financial Health

Relationship

Environmental

The customers reputation

with suppliers is also acritical factor.

Geographic, market,transportation, etc.


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Week 0 Week 1-2 Week 3-4 Week 5-6 Week 7 Week 7 Week 8

Data

Collection

Follow up

Preparation Analyze Mitigate

Report

4.0Analyze

SurveyDataCollection

Validate6.0

Mitigate

Supplier Information Set UpInternal Information Set Up

Report

Note:

Cycle Time 6-8 weeks

1 Category = 30 suppliers

- Manual Process

- IT Enabled Process

- Combination

Assessment

Team

1.0 Kick off

2.0 Preparation

5.0 Report

Kick Off

Review

Team

Provide Set upinformation

Category Managerand Suppliers

Set up SurveyInternal Data

3.0 Data Collection

Survey Review& EventProbability

Subject Matter Expertsand Suppliers

Review/ValidatePreliminaryData

Category Managerand Risk Manager

ID and BeginMitigation

Category Managerand Risk Manager

Supply Chain Risk AssessmentProcess


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Risk Wheel

DiagnosticAnalytical


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Supplier Risk Wheel: Supplier Example

Delivery Risks1 Planned capacity decrease2 Relatively low number ofproduction employees assigned tocompany parts3 Inventory status information isnot shared with company4 Medium to low ability to satisfydemand fluctuations with 5 weeknotice

Service Risk1 Low number of engineersassigned to company parts

Quality Risk1 Relatively low number ofproduction employees in theprocess for company2 Six month supplier rating ismedium3 Medium likelihood of qualityproblems affecting company

Union Strike Risk

1 Highly unionized productionfacilities

Disaster Risk

1 Transportation mode androute may cause disruption


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Exercise Teams

1 2

3 4

5 6

Commodity TeamsRisk ManagementSupplier ImprovementStrategic Sourcing

Supplier TeamsSupplier 1Supplier 2Supplier 3Supplier 4Supplier 5

Supplier 6Supplier 7

www.neurasurvey.comUser: supplier 1Password: freightliner

www.neuratool.comUser: freightlinerPassword: freightliner
http://www.neurasurvey.com/http://www.neuratool.com/http://www.neuratool.com/http://www.neurasurvey.com/


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Finished Product


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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 $100,000Supplier 2 $7,000,000 $3,000,000Supplier 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 $1,000,000Supplier 8 $1,316,054 0.9% $101,804 0.1%Kas Co $7,652,221 5.3% $1,674,475 1.2%Suplier 9Kurz 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%

Portfolio View


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Agenda

Time Topic How Outcomes

1:45 2:15 Asses the supply network - each team will complete their partof the supply network riskassessment.

Completed assessment of thesupply network

2:15 2:30 Break2:30 3:30 Develop Reports and analyze

the data- each team will build their reportsand analyze the data using the

SCRD model

Participants are able to explainhow they used the SCRD

model components to describea measure supply chain risk.

2:30 3:30 Diagnose the network andidentify mitigation actions.

- breakout exercise diagnosing theresults of the assessment andbuilding mitigation action plans.

Participants are able to explainhow they used the SCRDmodel components to diagnosea supply chain network

3:30 4:00 Report out and wrap up - each team presents theirresults.

- Q and A

Participants are able to explainhow they used the SCRDmodel components to diagnose

a supply chain network obtainfeedback

4:00 Adjourn

5-supply risk assessment process

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