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Adapt to Survive Supply Chain Disruptions

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Information about Adapt to Survive Supply Chain Disruptions
Business & Mgmt

Published on March 7, 2014

Author: MarkMorley68

Source: slideshare.net

Description

This presentation provides an overview of how global supply chains, particularly across the manufacturing sector have been impacted by disruptions over the years. From Earthquakes, flooding and limited export of rare earth materials from China, companies are having to redesign their supply chains and B2B infrastructures to build extra resilience against future disruption. Updated March 2014
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Adapt to Survive Supply Chain Disruptions

Today’s Agenda  How Are Today’s Global Supply Chains Being Impacted?  Managing Business & Operational Risk  Minimising Supply Chain Risk Through Operational Changes  How Can B2B Help Minimise Supply Chain Risk? OpenText Confidential. ©2014 All Rights Reserved. 2

How Are Today’s Global Supply Chains Being Impacted?

Supply Chain Disruption is Becoming a Recurring Theme…. Today’s supply chains need to be highly resilient, scalable and flexible to meet the challenges of doing business during a period of significant disruption OpenText Confidential. ©2014 All Rights Reserved. 4

Icelandic Volcano - 2010 Much of Europe’s airspace was shutdown due to the spread of volcanic ash in the atmosphere. As a result, global air freight shipments were severely affected. OpenText Confidential. ©2014 All Rights Reserved. 5

Japanese Earthquake - 2011 Japan’s East coast was severely impacted by the earthquake, many factories and utility infrastructures were destroyed and logistics networks ground to a halt. OpenText Confidential. ©2014 All Rights Reserved. 6

Japanese Tsunami - 2011 The Japanese Tsunami caused more longer lasting damage to Japan’s infrastructure and as a result supply chains have been impacted for more than 12 months. OpenText Confidential. ©2014 All Rights Reserved. 7

Thailand Floods - 2011 Many high tech companies were impacted by the Thai floods, at one point it was estimated that up to 90% of the world’s supply of hard disks had been affected. OpenText Confidential. ©2014 All Rights Reserved. 8

Thailand Floods - 2011 Honda’s factory was severely affected by the floods and as a result millions of dollars worth of cars had to be written off. Honda has now rebuilt the plant. OpenText Confidential. ©2014 All Rights Reserved. 9

Somali Pirates - 2011 Somali pirates have hijacked oil tankers and container ships. Goods exported from the West coast of India have had to be re-routed around the problem areas. OpenText Confidential. ©2014 All Rights Reserved. 10

Sinking of the Rena Container Ship - 2012 Ocean freight is susceptible to disruption when a major container ship runs in to trouble. Most of the containerised cargo has to be written off. OpenText Confidential. ©2014 All Rights Reserved. 11

Sinking of MSC Napoli - 2007 BMW Customer Services – “Sorry Sir, we cannot seem to trace your new motorbike which was enroute from our factory in Germany!” OpenText Confidential. ©2014 All Rights Reserved. 12

Chinese Restriction on Export of Rare Earth Materials - 2011 China controls up to 90% of the world’s rare earth materials. Government export restrictions impacted the shipment of components across high tech supply chains. OpenText Confidential. ©2014 All Rights Reserved. 13

UK Strike by Fuel Tanker Drivers - 2012 UK businesses disrupted by ‘potential’ wildcat strikes by 2000 fuel tanker drivers. The retail and grocery industry is always first to feel the pain. OpenText Confidential. ©2014 All Rights Reserved. 14

Factory Explosion Causes Global Shortage of PA12 - 2012 Explosion at Evonik Industries factory in Germany causes global shortage of CDT, a key ingredient of PA12 which is widely used across the automotive industry. OpenText Confidential. ©2014 All Rights Reserved. 15

Managing Business and Operational Risk

Business & Operational Risk and their Domino Effect Source: Global Risk Report 2012 – World Economic Forum OpenText Confidential. ©2014 All Rights Reserved. 17

Example of Organisation Resilience Based on 18 Metrics OpenText Confidential. ©2014 All Rights Reserved. 18

Types of Supply Chain Risk Source: APICS 2011 Supply Chain Risk Report OpenText Confidential. ©2014 All Rights Reserved. 19

How Well Do You Know Your Supply Chain? Source: APICS 2011 Supply Chain Risk Report OpenText Confidential. ©2014 All Rights Reserved. 20

Davos - January 2013  Increasing supply chain related resilience is key to sustained economic growth and prosperity  Minimising supply chain disruptions and ensuring continued operations should be high on the agenda of every company CEO  Increased use of cloud based B2B solutions can significantly contribute towards this goal ‘Dynamic Resilience’ in a volatile world The ability to bounce back, stronger than ever, after having been knocked for six Jorn Madslien - BBC OpenText Confidential. ©2014 All Rights Reserved. 21

Minimizing Supply Chain Risk Through Operational Changes

Implement Operational Changes  Near Shoring  Establish a ‘Global Plant Floor’  Shift Production to New Locations  Map Out Supply Chains/Networks  Introduce Dual Sourcing Strategies  Implement Control Towers/Crisis Management Centres  Appoint a Business Continuity Manager OpenText Confidential. ©2014 All Rights Reserved. 23

Near Shoring  Started to appear in 2009  Initially introduced to help shorten logistics networks  Recent natural disasters are encouraging more companies to move production or sourcing nearer to home markets OpenText Confidential. ©2014 All Rights Reserved. 24

Caterpillar Moves Production Back to North America OpenText Confidential. ©2014 All Rights Reserved. 25

Establish a ‘Global Plant Floor’  Some manufacturers have been quick to establish alternative production locations  These new locations help to spread the risk so that if one plant goes offline, production can continue at an alternative location OpenText Confidential. ©2014 All Rights Reserved. 26

Honda Moves Design and Production of NSX Supercar to North America OpenText Confidential. ©2014 All Rights Reserved. 27

Shifting Production to a New Location  Following the Japanese Earthquake, other countries started to encourage companies to relocate research/production  Many governments saw this as a good opportunity to encourage inward investment  Significant investment in new infrastructure/technology parks OpenText Confidential. ©2014 All Rights Reserved. 28

Taiwan Emerges As Alternative Location for Japanese Manufacturers OpenText Confidential. ©2014 All Rights Reserved. 29

Mapping Out Supply Chains  Many manufacturers have started to map out their entire supply chains  Helps to locate weaknesses in the supply chain and identify key suppliers  Once mapped out, contact info and supply chain relationships need to be maintained OpenText Confidential. ©2014 All Rights Reserved. 30

Researcher Spends 3 Years Mapping Out Suppliers For Centre Console OpenText Confidential. ©2014 All Rights Reserved. 31

Dual Sourcing Strategies  Disruption across supply chains has led to alternative suppliers needing to be identified quickly  Identifying alternative source of components/parts helps to minimise production disruption  Manufacturers are also likely to start increasing buffer stocks OpenText Confidential. ©2014 All Rights Reserved. 32

Implementing Control Towers/Crisis Management Centres  Many manufacturing companies have implemented control towers to monitor end-to-end visibility of global shipments  Recent natural disasters have led to control towers doubling up as crisis management centres OpenText Confidential. ©2014 All Rights Reserved. 33

Appoint a Business Continuity Manager  Increasing demand for Business Continuity Managers  Also known as ‘Masters of Disaster’  Central point of contact during a period of disruption  Increased regulatory compliance requires more thorough business continuity plans  Being unprepared is ‘bad for business’ OpenText Confidential. ©2014 All Rights Reserved. 34

Companies are Investing in Significant Changes to Their Business Business/Operational Changes Information Management Changes  Near Shoring Production  Improve Data Backup/Recovery  Establish a ‘Global Plant Floor’  Improve Contact Management  Leverage Dual Sourcing  Increase Supplier collaboration  Implement Control Towers  Develop Supply Chain Maps  Improve Business Continuity  Review Mass Communications Cloud based environments allow companies to introduce these changes with ease… OpenText Confidential. ©2014 All Rights Reserved. 35

How can B2B Help to Minimize Risk?

How Can B2B Help to Minimise Disruption Across Manufacturing Supply Flexibility Chains? • Provide business continuity by ensuring data is accessible from more than one location • Allow critical business documents to be backed up and retrieved Flexibility Visibility • Provide a real time view of global shipments through one common platform Reduce Cloud B2B Disruptions Integration Through Provides Communication Increased • Should disruption occur then alternative inventory locations can be identified quickly Visibility Communication • Provides a way to quickly determine postdisruption condition of TP community • Offers real time monitoring and follow up of supply chain related communications OpenText Confidential. ©2014 All Rights Reserved. 37

Using Community Management Tools to Increase Organisational Resilience Information Management & Communication OpenText Confidential. ©2014 All Rights Reserved. 38

Community Management – Strengthens Information Management How do you currently manage the contact information across your trading partner community?, is your business ready to respond to the disruption or change? Key Requirements: Centralised B2B Contact Directory  Self Service Access  Registration OpenText Confidential. ©2014 All Rights Reserved. 39

Community Management – Improves Command and Control How long would it take to assess the condition of your supply chain following a crisis / natural disaster?, How quickly could you identify an alternative supplier? Key Requirements: Mass Broadcast Communication  Secure Surveys & Web Forms  Real-Time Visibility & Follow Up OpenText Confidential. ©2014 All Rights Reserved. 40

Community Management – Minimises Supply Chain Risk Do you have the IT infrastructure in place to assess, manage and mitigate supply chain risk? Key Requirements: Risk Surveys & Assessments  Scoring & Weighting  Mitigation & Corrective Action Workflow  Trading Partner Risk Database OpenText Confidential. ©2014 All Rights Reserved. 41

OpenText GXS Active Community Improving Communication During a Period of Disruption Your Enterprise Systems Your People B2B Operations Line of Business Automation Validation Visibility & Control CONTRACT MANUFACTURERS  Sourcing & Procurement  Supply Chain Compliance  Corporate Partner Mgmt. Community Information Management Compliance, CSR & Risk SUPPLIERS Unified Communications Relationship & Performance On-boarding & Self-service DISTRIBUTORS CUSTOMERS Registration Workflow INSURERS Collaborative Dispute & Issue Management FINANCIAL INSTITUTIONS CARRIERS & 3PLS OpenText Confidential. ©2014 All Rights Reserved. 42

On-boarding and Compliance – North America Multiple acquisitions in recent years had led to a need to automate interactions with their vendor community. Comcast implemented a community management tool to:  Improve the way in which contact information was managed across 100,000 trading partners held within Oracle  Automate the registration process for up to 100 vendors per day OpenText Confidential. ©2014 All Rights Reserved. 43

Thank You! Is Your Supply Chain Prepared? OpenText Confidential. ©2014 All Rights Reserved. 44

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