Supply Chain Risk Management

x • Contents

Concluding oughts ............................................................ 200

Summary of Key Points ....................................................200

Endnotes ...................................................................................201

Chapter 11 Using Big Data and Analytics to Manage Risk ............203

What Is Big Data and Predictive Analytics, Really?.......... 204

e Process of Successfully Leveraging Big Data for

Maximum Benet ................................................................... 207

Barriers and Challenges Moving Forward .......................... 209

Tools, Techniques, and Methodologies Supporting Big

Data ...........................................................................................210

How Early Adopter Companies Leverage Big Data ............ 213

Consumer Packaged Goods ..............................................214

Dell Computers ...................................................................214

Western Digital ...................................................................215

Harley Davidson .................................................................215

Raytheon .............................................................................. 216

European Electrical Utility ...............................................216

Schneider..............................................................................217

Concluding oughts .............................................................218

Summary of Key Points .....................................................219

Endnotes ...................................................................................219

Chapter 12 Emerging Risk Management Tools, Techniques, and

Approaches ..................................................................... 221

Become a Preferred Customer ...............................................221

Gaining Preferred Customer Status ................................ 223

Construct Supply Chain Heat Maps .................................... 225

Map the Supply Chain ........................................................... 226

Challenges When Mapping a Supply Chain .................. 226

Supply Chain Mapping Guidelines ................................. 227

Decluster the Clusters ............................................................ 229

Clustering Gone Wild ....................................................... 230

Create a Flexible Supply Chain .............................................. 231

Examples of Flexibility .......................................................232

Create a Risk War Room ........................................................237

Contents • xi

Manage Working Capital ...................................................... 238

Controlling Inventory through Perfect Record

Integrity................................................................................239

Eective Demand Estimation and Management .......... 240

Concluding oughts ............................................................ 242

Summary of Key Chapter Points ..................................... 242

Endnotes .................................................................................. 243

Chapter 13 Risk Measurement ..........................................................245

Risk Measurement Validity and Reliability ........................ 245

Validity and Bridge Safety Measures .............................. 247

Supplier Performance Measurement—Doing It Right ...... 248

Quantied Risk Indexes ........................................................ 250

A Risk Index Example ........................................................251

Country Risk Indexes ........................................................251

Using Total Cost Measures to Manage Risk ........................252

Types of Total Cost Models ...............................................253

Supplier Capacity Estimate Measures ................................. 258

Emerging Supply Chain Risk Metrics ................................. 260

Value at Risk ....................................................................... 260

Time- to- Recovery .............................................................. 260

Risk Exposure Index ..........................................................261

Supply Chain Key Performance Indicators .....................261

Concluding oughts ............................................................ 264

Summary of Key Points .................................................... 264

Endnotes .................................................................................. 265

Chapter 14 Learning from Risk Management Leaders ................... 267

Making Risk Management a Priority at Boston

Scientic ................................................................................... 267

Having the Right Tools ..................................................... 268

Navigating reats at Boeing ................................................ 269

Supplier Risk Assessment at IBM ..........................................271

IBM’s Risk Management Tool ...........................................272

Using Supply Chain Mapping to Manage Risk at Cisco ....274

Surviving a Near- Death Experience at Delphi ....................275

xii • Contents

Managing Strategic Risk through Collaborative Cost

Management .............................................................................276

A Collaborative Approach to Cost Management .......... 277

Learning about Risk the Hard Way at J. C. Penney ............279

Concluding oughts ............................................................ 280

Endnotes ...................................................................................281

Chapter 15 Future Directions in Supply Chain Risk Management ...283

Supply Chain Risk Management Predictions ..................... 283

An Evolving Risk Management Maturity Model ...............291

Supply Chain Risk Maturity Model ................................ 292

Visibility .............................................................................. 292

Predictability .......................................................................293

Resiliency .............................................................................293

Sustainability ...................................................................... 294

A Call to Action ...................................................................... 294

Establish the Risk Leadership Team ............................... 294

Establish Risk Crisis Teams...............................................295

Focus on the Risk- Management Enablers ...................... 296

Assess the Current State of Risk Management

Preparedness ...................................................................... 296

Perform Risk Assessments and Develop Risk

Management and Business Continuity Plans ................ 297

Gain Visibility across the Supply Chain ......................... 297

Benchmark Risk Management Practices against

Industry Leaders ................................................................ 298

Develop or Obtain the Tools, Techniques, and Risk

Protocols ............................................................................. 298

Concluding oughts ............................................................ 298

Endnotes .................................................................................. 299

Appendix: The Supply Chain Risk Assessment Tool ....................... 301

How You Might Utilize the Tool ...........................................301

Walking through the Questions- of- Discovery .................. 303

How to Access the Tool ......................................................... 303