Achieving Supply Chain Resilience

Managing the Known Unknowns

24 November 2010

Donald Rumsfeld, US Secretary of Defense

US Department of Defense news briefing, February 12th, 2002.

"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know."

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IV III

II I Known

Unknown

Knowns Unknowns

I

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Is your supply chain suffering from disruptions?

9/11

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Not all supply chain disruptions are the same

Imp

act

Predictability Low High

Low

High

Volcano

Eruptions

Financial

crisis

Port

Strike

Piracy

attacks

Supply chain disruptions are different in impact and predictability

Government

regulations

SARS

9/11

Accidents

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Supply chain disruptions have a direct impact on your company’s

financial performance

Free Cash Flow

Economic Profit

Return on Capital

Company value:

Impact Drivers

The trends to extend supply chains and make them leaner have increased the

vulnerability of these supply chains to volatility in transportation

How can you make your supply chain more resilient to the

challenges in the transportation market?

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“It is not the strongest of the species that survives, not the most intelligent, but

the one most responsive to change” (Charles Darwin).

Carrier

Selection

Network

Redesign

Transport

Management

Sourcing

Strategy

Location

Strategy

Route

Optimization

Mode

Optimization

Predictability

Management

Collaborative

Carrier

Solutions

Inventory

strategy

Risk

Management

Drivers

Disruption

Management

Something to think about …

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Peak oil: what are the consequences for your (extended) supply chains?

Sources: Futurist.com

ASPO-Ireland, Newsletter,

August 2007; U.S. Energy

Information Administration,

World Petroleum

Consumption, 2008; and

Management Information

Services, Inc., 2008

Global Oil Production and Consumption

1960-2050 (projected)

Global Oil Consumption versus discoveries

$50 or $180 Per Barrel Of Oil ?!?!

IV III

II I Known

Unknown

Knowns Unknowns

I

Thank You!

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