Posts categorized as 'Supply chain risk management'

Plant-location decisions and potential supply chain risk

MelissaClow

Automotive PlantThis guest post comes to us from Jim Fulcher, Blogger on the Supply Chain Expert Community.

Last week, Toyota and Mazda signed an agreement to enter a business and capital alliance to further strength their partnership. The outcome is expected to either significantly impact an existing automotive supplier network or prompt manufacturers and suppliers to move or begin operations.

Specifically, the companies agreed to establish a joint-venture plant which produces vehicles in the U.S., jointly develop technologies for electric vehicles, jointly develop connected-car technology, collaborate on advanced safety technologies, and expand complementary products. As might be expected, it’s news of the joint-venture plant that is attracting attention, especially since the companies announced the plant would have an estimated annual production capacity of approximately 300,000 units, will require a total investment of approximately 1.6 billion U.S. dollars, and will create up to 4,000 jobs.

At the new plant, Mazda expects to produce cross-over models which Mazda will introduce to the North American market, and Toyota plans to produce the Corolla for the North American market. By producing vehicles in the U.S., Mazda aims to build a production structure to further grow in North America, allowing the company to more quickly respond to its customers’ needs depending on the region and model. By further increasing its production capacity in the U.S., Toyota will be better positioned to respond to the growing North American market.

Read the full story

Supply chain risk management in 2017

BillDuBois

Financial crisis. Check. Environmental catastrophes. Check. What’s next? Is this the year of political disruption?

Supply chain risk managementWorking in supply chain is like starring in a Rocky movie. You keep getting knocked down and you have to keep getting back up.

You don’t need to go back any further than a decade to understand the many challenges supply chains have endured over the years. Interestingly enough, the first episode of Breaking Bad that aired in 2008 reflected what it was like being in supply chain risk management at the time: “Hey, a science teacher is cooking meth, how much worse could it get?”

If you were a fan of the series, you were on the edge of your seat amazed at the plot’s crazy twists and turns. My guess is people who didn’t see the show were the supply chain practitioners too busy trying to ride the storm of the 2008 financial crash.

Supply chains had to deal with squeezing margins and dramatically cut costs, which included significant downsizing. Doing more with less wasn’t an option; it was a necessity. Maybe the one good thing to come out of it was some companies figured out how they could survive with lower inventories. Some suppliers weren’t so lucky. In 2009, I’m sure most we’re thinking, “How much worse could it get?”

Well, it got a lot worse.

Read the full story

Three Supply Chain Risks that Will Get You Thinking Bimodal

AlexaCheater

Supply Chain RiskIn a world where everything is changing, staying in one place is the fastest way to find yourself falling further behind. The same is true when it comes to your supply chain. Remaining stationary in your processes, relying on inefficient technology, and refusing to keep pace is how successful companies find themselves lagging behind the competition.

It’s not just about who does it better anymore. It’s about doing things differently. That’s when breakthroughs happen. Unfortunately, many companies are still looking at their supply chains with a lens focused solely on efficiency and the bottom line. That strategy alone won’t yield long-term success. There has to be the opportunity for innovation, as well. It’s what drives new products and pushes companies into new markets.

Hence the industry’s latest buzzword – bimodal. Most often credited with coining the term ‘bimodal supply chain’, research firm Gartner describes it as a supply chain made up of two distinct modes. Mode one is about cost-saving measures and efficiency and appeals to a need for predictability, accuracy and reliability. It’s focused on maintaining the status quo and managing day-to-day operations.

Mode two is all about experimentation and driving revolutionary changes in how supply chains adapt to new risks and opportunities.

Read the full story

Supply Chain Risk Management: Could You Face a Category 4 Supply Chain Disaster?

JoeCannata

Supply chain risk managementWith Hurricane Matthew, the most powerful storm to threaten the Atlantic Coast in over 10 years that has already brought severe damage to Haiti, the Bahamas and several Southeastern U.S. states, obvious disruptions to supply chains and supply chain risk management were a given. Many of the states affected contained key ports and supply destinations, as well as transportation and logistics hubs. These ports accounted for 18.3% of U.S. container import shipments and 49.8% of east coast and Gulf of Mexico imports in September, according to an article from the Business Information Industry Association.

  • Starting with Miami, this port primarily handles containerized cargo with small amounts of breakbulk, vehicles and industrial equipment. It is the largest container port in the state of Florida and ninth in the United States.
  • Going up the coast in Jacksonville, FL, there is a huge port that receives the second-most automobiles in the US along with all types of cargo.
  • Heading further north along the coast is Savannah, GA, home to the largest single container terminal in the United States. In 2015, the Port of Savannah moved 8.2% of total U.S. containerized loaded cargo volume and more than 18% of the East Coast container trade.
  • A little more northward up the coast is the port of Charleston, SC. In 2016, this port handled 1.1 million containers, moved 1.2 million tons of non-containerized cargo and had the most productive crane moves in the U.S.

Read the full story

Supply Chain Risk Management in the Spotlight: Lessons from Hanjin Shipping’s bankruptcy

Dr. MadhavDurbha

Supply chain risk management in the spotlight

Supply Chain Risk ManagementA few days ago, the world’s seventh largest container shipping company by volume, Hanjin Shipping, filed for bankruptcy protection. A lot of the products being shipped by Hanjin are headed to U.S. and European retailers (toys, electronics, clothing, furniture, etc) getting ready for the holiday season. However, many ports are not allowing these ships to dock due to the risk of creditors seizing the ships, and any such event will cause congestion in the ports.

According to sources, Stevedores are demanding advance payment in cash. As Hanjin is fighting to prevent seizure by creditors, several ships remain marooned in the sea. A contact of mine with firsthand knowledge of the matter commented that it is a nightmare to claim containers from a bankrupt shipper. In short, it is a mess!

Such risks are on the rise. Companies are spending more on outsourced products and services than in the past. There is a constant push to free up working capital by leaning down on the inventories. Lead times are in weeks and months in cases where manufacturing is outsourced to firms on the other side of the earth. Linear supply chains as we know them are turning into supply networks with more players and parties than ever before. To understand the geopolitical risks, all you need to do is to turn on network news. Given all this, one would think that supply chain risk management is more prominent now. However, a 2014 report by University of Tennessee on managing risk in global supply chains points out that 90% of the firms surveyed do not quantify risk when outsourcing production!

Read the full story

Design for the Supply Chain Pt 9: Thorough Down to the Last Detail

JonathanLofton

Design for the Supply Chain Can you believe we’re rapidly approaching the end of this series (Design for the Supply Chain) already!?! This week we’re talking about the meticulousness of the supply chain management solution.

Principle #8: Good design “Is thorough down to the last detail”

“Nothing must be arbitrary or left to chance. Care and accuracy in the design process show respect towards the consumer.” – ‘Dieter Rams: ten principles for good design’

My first reaction to this was to say something about Apple and Steve Jobs (A Story About Steve Jobs And Attention To Detail), but I figured you’ve probably already heard those stories before. So I started reflecting instead on how best to pay attention to detail. “Nothing left to chance” means to me there’s a clear checklist of things that are carefully considered when establishing (or refining) the supply chain. This checklist would ensure the attention to detail goes beyond the vision of a single individual, or even trusting in corporate culture—both inevitably change over time. It would be systemic, a part of the structure of the company, and wouldn’t change without a conscience decision and a serious amount of thought.

Read the full story

Confessions of a 50-Year-Old Hacker

JohnWesterveld

Hackathon judgesLast week was the Kinaxis solutions development hackathon. In a hackathon, people form up into groups and within a one-week time frame, identify a market need, develop an approach to addressing that need – in many cases prototype solutions – then present those ideas to a leadership team. This year was extra fun because we used a “Shark Tank” (or “Dragons Den” for us Canadians) approach (without the snarkiness that makes the TV version so popular).

As I sat and watched the presentations, I was blown away by the depth of supply chain knowledge and the amount of creativity on display. I wouldn’t be surprised if one or more of the ideas eventually becomes another of the features that make RapidResponse great.

Our team put together some ideas around supply chain risk management. We addressed supply chain risk in two ways; the leading indicators that show when you are at risk, and a simulation to see how well your supply chain can respond to a major event. The leading indicators range from single sourcing risk to global supply risk, with a number of other factors included as well. Each of these metrics help you identify where you could potentially be at risk.

The other part of our project was based on a concept I wrote about a year ago or so; the Chaos Monkey. The concept here is to go beyond the typical metrics and indexes and to prove how resilient your supply chain is to an actual disruption.

Read the full story

Can One Broken Bridge Cripple Your Supply Chain?

AlexaCheater

Nipigon River Bridge

That’s the question I’m asking after one very important, and now very broken, bridge in Northern Ontario failed to stand up to the rigors of a cold Canadian winter earlier this month. The newly built Nipigon River Bridge is a vital part of the Trans-Canada Highway system, the main roadway linking Canada’s east and west coasts. And on Sunday, January 10 it was completely shut down, bottlenecking traffic and forcing commercial shippers to detour several hours out of their way and through the United States since there’s no other way around.

According to news reports parts of the bridge buckled, causing a grinding halt to the passing of the approximately 1,330 commercial vehicles, carrying more than $100 million worth of goods, that cross over it every single day. Thankfully, no one was injured when it happened.

While one lane of the bridge has since re-opened, allowing at least a trickle of traffic to flow across, larger transport vehicles are still being detoured, and the cost to the businesses impacted by this logistics nightmare is mounting. One federal politician is calling it a “wake-up call” adding this is a serious choke point to the Canadian economy. I’d add it’s yet another reminder to businesses to make sure their supply chains can handle the unexpected.

Would your supply chain be able to respond and recover quickly and efficiently if potentially hundreds of large shipments failed to reach their destinations on time? Is an unanticipated delay like this part of your supply chain risk plan? If not, perhaps it should be.

Read the full story