Download - Bcm in the supply chain
BCM IN THE SUPPLY CHAINRupert Johnston
Format
• Acknowledgements.• Reasons Why.• Understanding the Supply Chain; Who and
What are Critical?• Strategies and Responses.
REASONS WHY
Why bother?• 72% of respondents
experienced disruption in supply chain.
• Top 3 causes were…• Top 3 impacts were…• 18% take supplier’s BCM for
granted; most check paperwork not capability.
• 20% experienced reputational damage due to disruption elsewhere in the supply chain.
The Disruptive Economy
A global marketplace exposed to interconnected & complex risks…
Eyjafjallajokull• Kenya: 10M flowers
discarded, veg fed to cattle• Japan: Nissan shuts down• Europe: Fish, veg, fruit &
cheese rot.• N America: BMW slow
down in production.• Highest level of air travel
disruption since WWII
WHO OWNED THE SUPPLY CHAIN RISK?
Why bother ?
• Supply chains are business ‘arteries’.• Ensure operations continue.• Increase organisation resilience.• Restore what's critical to an acceptable level,
in an agreed timeframe.• Enables you to increase influence on risks that
aren't yours, but could be lethal.
Why bother?
BS25999
PD25222
SCCM is important to organisations of all types and sizes, particularly as organisations seek to lower cost and enhance efficiency. Driving out inventory, time and other forms of waste means that goods, services, information and money are moving faster, which in turn means that the impact of an interruption in the supply chain will be felt sooner and more often. An increasing and significant proportion of costs lie within the supply chain for many, presenting both a risk and an opportunity. Poor supply chain managment can destroy value and jeopardise brand and reputation.
APPLYING BCM TO THE SUPPLY CHAIN (SCCM)
Supply Chains & Value Networks
• Supply Chain: “The network of organisations that are involved, through upstream and downstream relationships, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer.”
• Value Network: “A set of inter organisational links and relationships that are necessary to create a product or service.”
• Internal and external
BCM Lifecycle
Understand the organisation
Determine BCM
Strategy
Develop & implement
BCM response
Exercise, maintain &
review
BCM Programme
Management
• Internal• External• Services & utilities• Suppliers • Type of relationship
Map the Network
• Single points of failure• Choke points• Sole suppliers
Identify Red Flags
• For each of your business’s ‘critical functions’ find the partners on the map.
• Assess the risks and impacts.
BIA
• Options, strategies and response
Determine Mitigation &
Recovery Measures
• Assurance and maintenanceMaintain
Mapping for BCMMap entire value network, internal and external, upstream and downstream, including all touch points:• Manufacturing• Suppliers (incl
Utilities)• Service Providers • Warehouses• Transportation,
shipping & logistics
• Distribution Services • Service Centers • Supporting
Technology• Wholesalers • Customers• Information flows (DR
strategies)
Dig Deep
• Who supplies your suppliers and outsourcers; who do they rely on?
• How familiar are you with the risks and issues at Tiers 2 & 3?
• Downstream issues.• Value stream issues.• Red Flags.
Red Flags• Single points of failure• Niche suppliers• Choke points• Sole supplier• Failing business health• No BCM System in place
Consider your 3 key goods or service suppliers; any red flags?
What or Who is Critical?
• Relate existing BIA to plot key suppliers on Value Stream Map
• How does this relate to cost / value creation?• Where are the profit pools?• Any implications?
So What?
Based on this…• Who is critical?• What risks do they face?• How are they managing these?• What do you require from them / they from
you, in continuity terms (MSLs / RTOs)?• What next…?
4 Broad Options
• Accept the risk• Enhance your resilience / reduce dependency• Develop recovery strategies independent of
suppliers• Work together to improve resilience
BCM Strategies & Response
• Focus…• Select low-risk suppliers / have multiple sources for
critical supplies• From different geographical locations / identify
alternate suppliers• Make sure they are responsive at short notice• Increase your inventory levels / ask supplier to
maintain an inventory of your critical supplies• Purchase the supplier • Contracts & enforcement
BCM Strategies & Response
• Partnering arrangements • Visit exercises.• Exercise together; enhance plans and comms.• Examine systems and capability, not just plans.• Embed BCM into the relationships across the
whole network – introduce an ‘SCCM Programme’
• Continue to seek assurance
After the Fact…Following reputational damage and an increase in operating costs at your company due to a significant disruption to your supply chain, which was beyond your direct control, you are asked the following:• When did you become aware of the threat that caused this
disruption?• If you didn’t know about this threat, why not?• If you did know, what did you do about it?• If you didn’t do anything, why not?
As it stands today, are your answers credible?
QUESTIONS
21
“Everything an organisation needs to plan for, respond to and recover from significant business incidents and disruptions.”
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