Supply Chain Risk Management Sessions @CSCMP 2010

Most of the time during the conference I was busy interviewing companies for my dissertation, but I also found time to listen to some of the sessions on SCRM.

SCRM Keynote

The first session on supply chain risk management was held by Garry Lynch (Marsh, author of “Single Point of Failure”) on Supply Chain Risk Management. The contents were: Challenges, Current State, Successful and unsuccsessful practices.
Sadly, I had to leave before the practice part, but the key strategies can be found in his book mentioned above.

Combining Research and Practice

The second session SCRM was on “Global Supply Chain Resilience”. The presentation was held by: Dow Chemical Company (Darrel Zavitz, Martin Fernandes), Ohio State University (Joseph Fiskel, Center for Resilience), US Air Force (Timothy Pettit). They described a research project on SC resilience and its execution.The first interesting point was their highlighting of the interrelation between sustainability and resilience, since the focus of resilience is on being able to work under changing/turbulent conditions and missing sustainable behavior may exactly lead to these conditions.

The speakers defined supply chain variability as consisting of supply risks, deliberate threats, market change and internal change. Resilience on the other hand is described as the capability to adapt to turbulent change.

On the above mentioned definition Fiskel and Pettit built a framework of resilience consisting of vulnerabilities, capabilities and a resulting zone of balanced resilience.
One underlying premise of the process described below is, that usually SC managers do not worry about the unforeseen but about the familiar, but the goal has to be adaptability to real uncertainty!
Together with Dow Chemical they developed a process of “Design for Resilience” which consists of:

• Supply Network Mapping
• SCRAM (SC Resilience Assessment and Management) Analysis (vulnerabilities and capabilities, where is improvement potential)
• Supply Network Simulation (stress testing the SC, weekly basis, the goal is to find clues how to improve resilience)
• Strategy selection (a weighing of increasing capabilities vs. cost has to be done, the suggestion was to use kind of a break even analysis for the probability of an adverse event)

Pettit and Fiskel also build a list of possible vulnerability / capability combinations using literature review, a survey and focus group interviews. They use method triangulation to increase the validity of the resulting listing.

All in all they presented a very business oriented modeling system (including a software using a systems dynamics model) to show effects of different scenarios on the supply chain. It is important to note they are not trying to predict future events, but focus on more general agility and resilience of the SC in case of a disruption.