supply chain risk management and continuity planning...
TRANSCRIPT
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Supply Chain Risk Management and Continuity Planning
E i Wi kEric WieczorekCaroline Kolman
Bio ‐ Caroline Kolman
• Licensed Professional Engineer (Industrial)• Improving supply chains for over 20 years, focused on healthcare industry for last 10– Strategic sourcing: Identifying and implementing efficiencies in the procure to pay cycle
– Technology solutions: SAP, Demand managementgy , g– Value analysis: Creating sustainable cost savings for healthcare providers
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Bio – Eric Wieczorek
• 10 years pharmaceutical manufacturing at B i t l M S ibbBristol Myers‐Squibb– Chemicals sourcing and procurement, RFP management, global contract negotiations, lean manufacturing
– Third party manufacturing management, sourcing quality management, make versus buy analysis
• Supply chain risks consulting
Agenda• The efficient supply chain – The risky supply chain • Anatomy of a supply chain disruption – Thailand floods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example
i i i l i– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
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Agenda• The efficient supply chain – The risky supply chain • Anatomy of a supply chain disruption – Thailand floods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example
i i i l i– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
The efficient supply chain• Supply Chain management has its roots in
manufacturing and the quality evolution– In the early 1900’s, Henry Ford developed the
assembly line system to focus on standardization and elimination of waste in the car manufacturing process
– In response to US manufacturers losing market share to Japan in the late 1970’s, Total Quality Management (TQM) was adopted to improve manufacturing performance
– In the 1990’s, General Electric (led by Jack Welch, CEO) adopted Six Sigma to improve quality and eliminate variance that caused defects
– Industries such as financial services, government, and , g ,healthcare begin to adopt these principles and techniques
• The successes achieved through the application of these techniques continues to fuel the demand for more efficiencies and cost savings
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Efficiencies and associated risks• By its very nature, the drive for a lean and efficient supply
chain creates risk, or the opportunity for disruption:
Supply Chain Component
Past Strategy New "Lean" Strategy Risk
Strategic Sourcing Utilize many sources/vendors to obtain raw materials and inputs
Reduce the number of vendors to reduce variability and increase volume for low cost
Dependence on one or few suppliers
Globalization Maintain a vertical Utilize low‐wage third Disruptions due to supply chain ‐ own or have significant influence on raw materials and inputs
world countries to reduce costs
violence/political unrest, natural disasters, etc.
Efficiencies and associated risksSupply Chain Component
Past Strategy New "Lean" Strategy Risk
Transportation Government regulated Carriers can charge Movement andTransportation Deregulation & Warehousing
Government regulated shipping and transportation inflated costs, limiting capabilities and offerings
Carriers can charge competitive rates to their customers; combining warehousing with transportation companies leads to 3rd party logistics (3PL) and greater
Movement and storage creates opportunities for delays, damage
goutsourcing for moving goods
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Efficiencies and associated risks
Supply Chain Component
Past Strategy New "Lean" Strategy Riskp
Information Technology Automation and electronic records/communication did not exist ‐ manual processes
Technology automates order filling and processing (procurement) through fulfillment, delivery and invoicing (payment)
System errors ("garbage in, garbage out"), downtime (power disruptions, system crashes, upgrades and patch applications)
The impact of supply chain disruptions• Defects• Delays / shut downs• Additional costs• Reduced perceived value• Reduced real value (suppliers, customers)• Fatalities (in extreme cases)
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Agenda• The efficient supply chain – The risky supply chain • Anatomy of a supply chain disruption – Thailand ato y o a supp y c a d s upt o a a dfloods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
Anatomy of a supply chain disruption• What is a supply chain disruption?• What are the key contributors in a supply chain disruption?
• Impact from supply disruptions?
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What are supply chain risks? (examples ‐ short list)Highly visible/ Less controllable
Terrorism
Less visible/ More controllable
Legal/ contract relatedTerrorismNatural catastrophesWidespread labor stoppagePort closuresDiseases/ pandemicsForeign governments/ trade disruption
Legal/ contract relatedRegulatory/ compliancePlanning/ forecastingSourcing/ procurement / qualitySupplier interruption/ qualification / qualityCustomer service & satisfaction
Country/ political riskDomestic & international lawsOthers…
Inventory & obsolescenceTechnology/ systemsOthers…
Potentially insurable risk (given certain conditions)
Last 10 years of supply chain disruptions –related to natural events – selected few• 2011 Japan earthquake ($300BB economic losses, $25BB
insured)insured)• 2011 Thailand floods ($45BB economic losses, $10BB insured)• 2011 New Zealand earthquake ($13BB in losses)• 2010 Iceland volcano ash cloud ($200MM/ day, uninsured)• 2005 Hurricane Katrina ($62BB insured losses)• 2008 Hurricane Ike ($18.5BB insured losses)
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Recent or notorious isolated event supply disruption examples• Evonik plant Germany. Nylon 12 & Resins shortages impacts auto, sporting
and medical industries• A 10‐minute fire changes the industry for Nokia and Ericsson in March
2000‐ Ericsson is becomes SonyEricsson in October 2001• Airbus A380 disruption of 2005• Kellogg’s disruption in carton manufacturing plant (Labor issue)• Mattel 2009 and 2010, SARS/ avian flu outbreak affects third party
manufacturers• Dell supply chain glitches of 2007 (manufacturing quality)Dell supply chain glitches of 2007 (manufacturing quality)• Genzyme March 2011, 2 unrelated supply disruptions at separate
manufacturing plants create drug shortages for Fabrazyne and Thyrogen
The four stages of a supply chain disaster
Denial
“It’s not that
few days!”
“It’s not that bad! We”llbe back in
business in a few days!” Well, it’s How did that
happen? And the
Severity Blame
Resolution
Event
Denial
we thought!
actually worse than we thought!
happen? And the inevitable… Who is
responsible?
During that time a solution is being worked
on.Is a lesson learned?
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The Thailand floods supply disruption example in the flash memory industry – summary of press conferences and business leader quotes after the event
• Event takes place…• Reactions from flash memory manufacturer business leaders a few days after
– “there will be minor disruptions because of logistics issues. Aside from that business as usual thanks to inventory in the supply chain” (DENIAL….)
• A month later: Things get sorted out and the severity comes to light…– “The industry will see supply shortages caused by the destruction of the Work In
progress inventory (WIP) at the time of the event” (SEVERITY…)
• Short‐Term: More bad news…– “ The industry will face further shortages due to reduced production capacity as a result
of production assets destroyed, factories unable to restart due to power supplyof production assets destroyed, factories unable to restart due to power supply limitations, or lack of raw materials from their own suppliers” (SEVERITY & BLAME…)
• Long‐Term (6 months later): Hope is coming back but it is not done yet….– “ We will see further supply chain constraint while destroyed assets and factories get
repaired or replaced and new capacity comes online” (RESOLUTION…)
The Thailand floods supply disruption example in the flash memory industry – Continued
• During that time… what was going on?• Firms directly hit by supply disruption are frantically canceling orders and trying to• Firms directly hit by supply disruption are frantically canceling orders and trying to
book orders from alternate suppliers…• Problem: manufacturing capacity was already pretty scarce before the event.• Problem: qualifying and testing parts from new supplier is time and resource
consuming for most industry.• Problem: the alternate supplier identified are in the same region of Thailand;
impacted like any other supplier!• Problem: manufacturing yield and quality with new supplier is not the same as
with the incumbent supplier.• Problem: prices are also higher!
• What impact would a similar event have if it took place in Hong‐Kong?
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The Thailand floods supply disruption example – What happened there?
• Flash memory is a very competitive market• Low global manufacturing capacity available• High concentration of global supply base in one geographical area
• Extended/ complex supply chain• Low global inventory
The Thailand floods supply disruption example – How did we get there?
• Low cost country sourcing• Global sourcing… Yes but one supplier for each component
• Lean/ Just‐In‐Time• Wall Street – inventory hinders company performance yet inventory is one way toperformance, yet inventory is one way to mitigate risk that also hinders company performance
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The Thailand floods supply disruption example – What could have been done about it?
• Recognize and monitor manufacturing capacity shortages• Recognize end‐to‐end supply chain lead‐times and plan inventory g pp y p y
accordingly• Recognize that the world supply is geographically concentrated• Negotiate supply contracts for emergency manufacturing capacity
allocation• Maintain supplier relationships with multiple supply sources• Qualify & test supplier components before an event happens• Transform LEAN manufacturing to “risk adjusted LEAN” supply chain• Transform LEAN manufacturing to “risk‐adjusted LEAN” supply chain
management
That’s Business
Planning! (BCP)
That’s Business Continuity
Planning! (BCP)
Supply chain disruption response scenarios
Event Start
Detection
Mitigation Strategy
Early Delayed
Planin
place
No responseplanned
Planin
place
No responseplanned
Organizational PerformanceRecovery
FastEfficientLow cost
FastInefficientHigher cost
SlowEfficient
Higher cost
SlowInefficientHigh cost
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The disruption recovery curve – The benefits of continuity planning
ce
Event start
Had no event happened!
gani
zatio
nal p
erfo
rman
reco
very
Delayed response/ No mitigation strategy
Lucky!
Org
Time elapsed
Worst Case Scenario!
Detection Response Mitigation strategy
For illustration purposes only – not to scale
The disruption recovery curve – The benefits of continuity planning
nce
Event start
Had no event happened!
gani
zatio
nal p
erfo
rman
reco
very
Delayed response/ No mitigation strategy
Delayed response/ mitigation strategy
Late Detection
Org
Time elapsed
For illustration purposes only – not to scale
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The disruption recovery curve – The benefits of continuity planning
nce
Event start
Had no event happened!
Early Detection
gani
zatio
nal p
erfo
rman
reco
very
Delayed response/ No mitigation strategy
Rapid response/ mitigation strategy
Early Detection
Org
Time elapsed
Worst Case Scenario!
For illustration purposes only – not to scale
The disruption recovery curve – The benefits of continuity planning
e
Event start
Had no event happened!
aniz
atio
nal p
erfo
rman
cere
cove
ry
Delayed response/ No mitigation strategy
Value of detecting & planning for disruption.
BCP!
Org
a
Time elapsed
Worst Case Scenario!
For illustration purposes only – not to scale
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Buying the umbrella before it rains
Business continuity planning (BCP) aims to help:• Ensure the survival of the organization• Ensure the survival of the organization.• Protect corporate assets and control financial loss.• Minimize the loss of customers.• Facilitate the resumption of operations.• Improve the ability to salvage damaged equipment and
operations.• Provide for the safety of personnel and the public before,
during, and after a disaster.
Myths and realityMyth Reality
Our people know the business and will know what to do in the event of a disaster.
When a disaster occurs, it is no longer business as usual. People have to think in t f h t i i t t t k i thterms of what is important to keeping the business running.
We have insurance to cover our losses. Insurance is a part of your protection, but may not fully compensate you for things like loss of customers, loss of market share, set backs indevelopment or release of a new product in the market.
We don’t have time to develop a Business Time spent developing and maintaining a Continuity Plan. Business Continuity Plan is an investment in
the company.
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Limitations of insurance• 3 types of supply chain disruption insurance
– Property business interruption insurance (also called Time Element) may include Contingent Business Interruption (CBI)include Contingent Business Interruption (CBI)
Direct Damage is a pre‐requisite (owned or supplier location); narrow coverageUsually limited to 12 monthsOnly named suppliers or owned locations or limited coverageExpensive if located in natural catastrophe areas (i.e. earthquake, flood, storm); high deductible
– Trade disruption insurance/ Supplier risk insuranceBroader risk coverage, indirect risks (although some risks are not covered) but typically low limits ($100MM)typically low limits ($100MM)Sold per supplier, expensive
– Political risk insuranceConfiscation of assets, lost income, currency inconvertibility
What is the insurance industry saying?• After the Japan earthquake and suffering close t $40BB i t t l i d l ito $40BB in total insured losses insurance companies are reacting:– Munich Re/ Swiss Re: […] customers that they have 18 months from
January 1, 2012 to deliver far greater transparency on supply chains [...]and suppliers […]or else coverage will be limited or even excluded. (Commercial Risk Europe‐ January 2012)
– Lloyds – reviewing its contingent business y g ginterruption exposure
– Reduction in CBI coverage. CBI used to be a “throw‐in”, now it will cost policyholders.
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Why plan?• Can be the difference between survival or death of the organization (more
than 50% of organizations do not resume business after a major disaster‐International Risk Management Institute (IRMI) 2006
• To remain competitive• To satisfy the company’s mission, its shareholders and customers• Insurance is not THE answer!• Minimize the severity of a disruption (financial losses, regulatory fines,
long term loss of customers, etc.)• Minimize legal liability as a result of an accidentMinimize legal liability as a result of an accident• Maintain the reputation of the organization
“Dollarization” is key to BCP
• Can you demonstrate ($) the cost of not l i f ti it ?planning for continuity?
• What would be the cost of a plan versus the cost of a loss?
• Are there risks the organization must plan for and others it can “deal with”?and others it can deal with ?
• Which risk should we address first?
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Can you demonstrate ($) the cost of not planning for continuity?• A large Pharma client uncovers and “dollarizes” the value of a key third party manufacturer (TPM) to itsvalue of a key third party manufacturer (TPM) to its #1 selling product
• A catastrophic loss at its TPM means the potential to be out of business for at least 3 years
• Dollarization ($)= 3 years sales + continuing expenses interdependent plant inefficiencies andexpenses, interdependent plant inefficiencies, and payroll to retain key employees, etc…
What would be the cost of a plan versus the cost of a loss?• A large California Tech client hired us to
th i b i i t ti l i iprepare their business interruption claim in Thailand
• 30 days out of business = over $15MM loss• $500K per day!• Cost of a plan? A fraction of $500K• Cost of a plan? A fraction of $500K• If the plan reduces a loss by at least one day the ROI is over 100%
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Are there risks the organization must plan for and others it can “deal with”?
• A large Pharma client identifies a bottleneck in its manufacturing process at a location in earthquake prone g p q parea.
• A laser manufactured (24 months normal lead time, 18 expedited) in Germany is key to its entire franchise. Several $ billions at risk. Cost of an additional laser is $2million.
• Contract packaging TPMs are also identified as
Plan
Contract packaging TPMs are also identified as bottlenecks in the chain.
• Packaging can be moved (30 days) to another suppliers easily by filing a CB30 with FDA.
Deal with
Which risk should we address first?• “Dollarized” risk is a function of ($) severity and likelihood of
occurrence.occurrence.• Distinguish between assessment & quantification
High Spend/ Low Risk
High Spend/ High Risk
Low Spend suppliers
generally not captured by
i k
Spend
Page 36
Risk
Low Spend/ Low Risk
Low Spend/ High Risk
Supplier Risk Heat Map (example)
risk assessments
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Agenda• The efficient supply chain – The risky supply chain • Anatomy of a supply chain disruption – Thailand a o y o a supp y c a d s up o a a dfloods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
Drug manufacturer supply chain example
Dosage DistributionPackagingBulk Drug
TPM Spain
Pen
Syringe
Puerto Rico
U.S. market
TPM, Germany Location 1
TPM, Germany Location 2
Boston, MA DC, USA
TPM Germany
Other marketsBack Up plant, Ireland
TPM UK DC, France
Owned location
Supplier location
Legend:
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Drug manufacturer supply chain example
Dosage DistributionPackagingBulk Drug
TPM Spain
Pen
Syringe
Puerto Rico
U.S. market
TPM, Germany Location 1
TPM, Germany Location 2
Boston, MA DC, USA
TPM Germany
Other marketsBack Up plant, Ireland
TPM UK DC, France
Owned location
Supplier location
Legend:
Drug manufacturer supply chain example
Dosage DistributionPackagingBulk Drug
• Spain TPM ramps up production 20%, 60‐day lead time
• Ireland can provide 50%
TPM Spain
Pen
Syringe
Puerto Rico
U.S. market
TPM, Germany Location 1
TPM, Germany Location 2
Boston, MA DC, USA
TPM Germany
• Ireland can provide 50% of total world demand, 6 months lead time
• Tax impact from manufacturing out of Puerto Rico versus Ireland/ Spain ($200MM)
Other marketsBack Up plant, Ireland
TPM UK DC, France
Owned location
Supplier location
Legend:
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Drug manufacturer supply chain example
Dosage DistributionPackagingBulk Drug
• Contract penalties at TPMs
• $10MM
TPM Spain
Pen
Syringe
Puerto Rico
U.S. market
TPM, Germany Location 1
TPM, Germany Location 2
Boston, MA DC, USA
TPM Germany• Manufacturing slow down
Other marketsBack Up plant, Ireland
TPM UK DC, France
Owned location
Supplier location
Legend:
down.• 60 % volumes from
Puerto Rico• Interdependency total
$60MM
Drug manufacturer supply chain example
Dosage DistributionPackagingBulk Drug
TPM Spain
Pen
Syringe
Puerto Rico
U.S. market
TPM, Germany Location 1
TPM, Germany Location 2
Boston, MA DC, USA
TPM Germany
• 3 Months Finished Inventory
12 Months to restart Puerto Rico
Other marketsBack Up plant, Ireland
TPM UK DC, France
Owned location
Supplier location
Legend:
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Dollarization – Puerto Rico plant loss
$2BB
MM
$1.4BB
$600
M
$500
MM
$900MM
$910MM
$970MM
$200
MM
$1.17BB
$500
MM
$670MM
$675MM $675MM
Value at risk(VaR)
MitigationStrategy
Cost($5MM)
Spain TPMRamp up 20%
Production(60 Days)
Contract Penalties($10MM)
MitigatedVaR
Ireland50% capacity6 months to come online
ExpensesContinuing
Boston & DC($60MM)
Taximpact
($200MM)
Inventory($500MM)
Dollarization – Puerto Rico Plant loss
$2BB
MM
$1.4BB
$600
M
$500
MM
$900MM
$910MM
$970MM
$200
MM
$1.17BB
$500
MM
$670MM
$675MM $675MM
Value at risk(VaR)
MitigationStrategy
Cost($5MM)
Spain TPMRamp up 20%
Production(60 Days)
Contract Penalties($10MM)
MitigatedVaR
Ireland50% capacity6 months to come online
ExpensesContinuing
Boston & DC($60MM)
Taximpact
($200MM)
Inventory($500MM)
Actions taken by the business continuity plan….
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Scenario planning dashboard–Puerto Rico location exampleScenario Exposure
($MM)Time to Recovery
Probability VaR($MM)
comments
Windstorm $675 12 months
20% $135 Total Plantshutdown!
Fire $250 12 Months
10% $25 Partial plant shut down
Earthquake $675 12 Months
1% $6.75 unlikelyMonths
Manufacturing Quality
$2BB 6 Months 5% $50 Transfermanufacturing
Agenda• The efficient supply chain – The risky supply chain • Anatomy of a supply chain disruption – Thailand a o y o a supp y c a d s up o a a dfloods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
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Health Care ProviderSupply Chain Example
Health care provider exampleThe healthcare supply chain
Medical Supplies
Hospital Patient
Non ClinicalSupplies
Pharmaceuticals
Cli i l S i
ManufacturersandDistributors
Clinical Services
Non Clinical Services
ServiceProviders
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• ProductsClinical supplies (surgical medical surgical laboratory)
Health care provider example Critical components of the healthcare supply chain
– Clinical supplies (surgical, medical‐surgical, laboratory)– Pharmaceuticals– Non clinical supplies (facilities, environmental, food/nutrition)
• Services– Repairs & maintenance (clinical, non clinical)Repairs & maintenance (clinical, non clinical)– Environmental/housekeeping– Food service
Health care provider exampleWhat are the risks for healthcare providers?
Natural catastrophes & Medical malpractice abuse care
External Operational
Natural catastrophes & accidental destruction of assetsDiseases/ pandemicsTerrorism/violenceOthers…
Medical malpractice, abuse, care accountabilityRegulatory/ compliance/ medical records protectionSourcing/ procurement / qualitySupplier interruption/ qualityDrug shortages/ recallsCustomer service & satisfactionTechnology/ systems/ patient privacy/ medical records protection (HIPAA violations)Others…
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Health care provider exampleDrug shortages• Although the FDA takes great efforts, within its legal authority, to address
and prevent drug shortages, they still occur for many reasons:– manufacturing and quality problems, – delays– discontinuations
• FDA actions:– Communicate the issue and to help restore availability– Work with other firms who manufacture the same drug, asking them
to increase production if possibleto increase production, if possible– Many companies voluntarily provide shortage information that FDA
posts on its website
Health care provider exampleDrug shortages – Planning and preparedness
Hospitals and health care providers have few options in drug shortage situations:• Ensure the hospital/system has a team or specific person assigned to
monitor, advise, and/or recommend actions associated with the current drug shortage issue.
• Utilize drug shortage monitoring tools and daily updates for existing shortages and ones to anticipate (Some of the shortages have lead time, while others happen literally overnight)
• Utilize P&T Committee to regularly review drug protocols and usage; investigate alternatives and review/approve as appropriate
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Health care provider exampleOther disruption examples
• Product recalls • Procedure for product removal and
• Disaster recovery planning
removal and documentation
• Backup supplies in close proximity
• Alternative sources/suppliers
• Teaming with neighboring hospitals for demand surges
Agenda• The efficient supply chain – The risky supply chain • Anatomy of a supply chain disruption – Thailand a o y o a supp y c a d s up o a a dfloods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
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Business ContinuityPlanning
Managing the risks: What is business continuity planning?The process of:• Preparing for• Mitigating• Responding to and• Recovering from a crisis.
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What is business continuity?For the business continuity manager:• The plans:
– Crisis • Scope:
– Management• Threats:
– Natural hazardsmanagement
– Disaster recovery– Contingency plan
– Production/ sales/ supply chain
– Finance/ accounting
– Human resource– Customer service
R&D
– Man‐made– Accidental– Technological– Utilities failures– Regulatory
– R&D– IT– Marketing– Legal
Source: IRMI practical risk management – Topic D-18
The business continuity plans…
• Crisis management plan (emergency): actions taken immediately before during and after a catastrophicimmediately before during and after a catastrophic event that preserves lives, safeguard property and reduce loss of resources
• Disaster recovery: actions take to recover from a disaster and to resume business functions
• Contingency plans: actions taken to address the loss• Contingency plans: actions taken to address the loss of a specific key process , asset or resource
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What is business continuity?For the supply chain manager:• The plans:
– Crisis management• Scope:
– Management• Threats:
Natural hazardsDisaster recoveryContingency plan
Production/ sales/ supply chain
– Finance/ accounting
– Human resource– Customer service
R&D
Man‐madeAccidentalTechnologicalUtilities failuresRegulatory
– R&D– IT– Marketing– Legal
Source: IRMI practical risk management – Topic D-18
The supply chain BCP processThreat analysis
• Identify risks throughout the supply chain function•Identify mitigation strategies, processes, equipment, locations, suppliers, customers
ValueAt
risk analysis
•Quantify threat financial impacts•Assess likelihood of threats•Prioritize results
Continuation strategies
•Develop a risk register/ catalog•Establish a response plans, checklists•Evaluate cost/benefits
Emergency•Establish protocol for plan activation•Develop communication plans(suppliers, customers,Emergency
responseDevelop communication plans(suppliers, customers, internal)
•Establish response teams based on threat
Testing & education
•Team members role•Test plans with suppliers, customers, plant staff•Review periodically
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Additional strategies for improved supply chain disruption recovery• Early detection & reaction
» Knowing where the threat is and which suppliers/ customers might be affectedK i t k f i l th t d l t d k i h» Keeping track of regional weather event development and knowing where your suppliers are located
• Visibility & predictability» Gaining knowledge about procured components and their raw materials sources
impact to your product or services» Collaborating with suppliers and customers before and after an event» Building supply contract in order to understand what parameters will govern a
relationship in case of a crisis
• Resiliency and sustainability» Multi‐sourcing, alternate suppliers, alternate processes, equipment, alternate
logistics routes, carriers» Build flexibility in product design,» Know your supplier / customers BCP, participate in collaborative emergency
response trainings
Free resources for BCP
• www.contingencyplanning.com• Department of Homeland Security: www.ready.gov
• Disaster Recovery Journal: www.drj.com
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Agenda• The efficient supply chain – the risky supply chain • Anatomy of a supply chain disruption – Thailand a o y o a supp y c a d s up o a a dfloods
• Supply chain risk quantification and business continuity planning
– Manufacturing example– Healthcare example– Business continuity planning
• Best practices in supply chain risks management• Questions and answers (10 min)
Elements of organizational supply chain risk management maturity
VISIBILITY PREDICTABILITY SUSTAINABILITYRESILIENCY
TOOLS
TECHNIQUES
•Assessment HEAT MAP •Supply Chain Network Map•VaR, Value-at-Risk Metric
•BCP Planning•Disruption/Insurance•SCRM Mitigation Tactics•SCRM Case Studies
•ISO SCRM Standards
•Predictive Analytics Engines•Scenario Planning•Probabilistic Modeling•War Room Exercise
•ERM, Enterprise-Wide Risk Management Framework•Financial Risk Quantification•Supplier Risk Analysis
•Standards InstitutionalizedS
•Real-time Global Risk Alert Dashboards•Web-based ERM Program Management Maturity•Scenario Risk Response Plans
•Formal BCP Process•Scenario/Risk Response Planning•Global Risk Register•Supplier collaboration Program
•Active/Effective SCRM-A /Miti t /M
•Predictive Analytic Engines•Global Risk/Threat Service•Real-time Risk Dashboards•ERM Web-based Tool•SRM Tool
•Real Time Risk Monitoring•New SCRM Metrics •Scenario/Risk Response Plans embedded in S&OP
•Ongoing SCRM Organization
Supply Chain Risk Management Maturity Model
COMPLIANCEGOVERNANCE
•SCRM Workshops•Knowledge Transfer
•Supplier Collaboration/Compliance•Embedded ERM in S&OP
Assess/Mitigate/Manage•Standards of Compliance in S&OP•Embedded ERM/SRM/Metrics
•Collaborative risk management and compliance•Formal SRM Program•Bi-Annual Risk Assessments
Avg. Companies
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Conclusion
• SCRM and BCP is a journey not a race…• Eisenhower once said “Plans are nothing, Planning is everything”… you will come up with the plans but you must start the planning process.
• OrOr…
Caroline Kolman Eric WieczorekCaroline KolmanManaging Director, Healthcare Supply Chain
Tel: 412-378-8701
Email: [email protected]
Eric WieczorekAssociate Director, Supply Chain Risk Analysis
Tel: 609-620-7855
Email: [email protected]