maximizing_supply_chain_transparency_sauditranstec_dec2014_swift
TRANSCRIPT
December 2, 2014 1
Saudi Transtec 10th December 2014
Dammam Kingdom of Saudi Arabia
Protecting Your Company by Maximizing Supply
Chain Transparency
December 2, 2014 2
Risk management
what does it mean?
December 2, 2014 3
The trade environment challenge: Supply chain blind spots
The less you see, the less you know.
The less you know, the greater the risk.
December 2, 2014 4
December 2, 2014 5
Newsworthy risks; Ethical “Disconnect”
Social issues Product recalls
Cargo theft and terrorism
Environmental issues
December 2, 2014 6
Analyze your risk… Risk Assessment
December 2, 2014 7
Let’s say we identify 5 Major Suppliers in 5 Cities in 3 High Risk Countries in this risk assessment …
December 2, 2014 8
…. and lets focus on the hypothetical 3 in China
December 2, 2014 9
You contact Intertek to work on scheduling audits of these 3 suppliers… Intertek Offices reach out ….
=
December 2, 2014 10
…. and those initial 3 suppliers, after working with Intertek…
December 2, 2014 11
…discover production is actually occurring in 9 locations…
…Harbin
…Tianjin
…Beijing
…Wuhan
…Chengdu
… Suzhou
December 2, 2014 12
This happens often…
40% … of Intertek Audit requests from global clients have
something wrong with the audit request entity… address, contact at production facility, etc.
December 2, 2014 13
We need to understand the difference…
SUPPLIER / VENDOR
PRODUCTION FACILITY This is where your risk lies
December 2, 2014 14
The dangerous reality:
Many companies do not know the full extent of their supply chain… up to
70% In a recent survey
?
December 2, 2014 15
Supplier Management is getting Heavily Regulated
1
5
• Increasing disclosure of non-financial due-diligence areas such as climate change (SEC)
• Disclosures on Human Trafficking & related labor issues (California Supply Chain Act SB657) & possible Federal Legislation
• Carbon data disclosure Act // UK Bribery Act
• Conflict Minerals Reporting • USA: Section 1502 of SEC Requirements • Australia due diligence guidelines • European Commission proposal for EU
December 2, 2014 16
Sustainability Investors are on the Rise
1
6
Co
mp
an
ies
Re
po
rtin
g E
SG
S
RI/
ES
G r
ela
ted
Fu
nd
s
2005 2006 2008 2007 2009 2010
300
600
900
1,200
1,500
700
1,600
2,500
3,400
4,300
+84%
2005 2006 2008 2007 2009 2010
+219%
•SCALE: UN PRI signatories (783); UNGC participants (8,474); GRI participants (1,000+); CDP respondents (2,456)
•HSBC, Barclays, Goldman, UBS, Merrill, Credit Suisse all managing ESG-related funds
•VALUE: DJSI $8 trillion; FTSE4Good; S&P Carbon, HKSE Sustainability Index
December 2, 2014 17
Exposure can have material consequences:
85 percent of companies with global supply chains had experienced at least one supply chain disruption in the previous 12 months.
1. Sudden demand change (53 percent)
2. Margin erosion (42 percent), such as due to a cost increase, lost
revenue, or unanticipated taxes/regulatory changes.
3. Physical product flow disruption (37 percent)
4. Product quality failure (28 percent)
5. Regulatory non-compliance and/or worker-safety failure (20 percent),
6. Social responsibility failure (18 percent).
One study suggests that companies have experienced 30% lower shareholder returns compared to their peers in the wake of a publicly-announced disruption.
December 2, 2014 18
Complexity of global supply chains and increased regulation create challenges:
Complex supply chain • Facilities • Vendors • Licensees • Wholesalers
Constantly changing facility locations and contact details
Traceability and accountability challenges
Supplier information that is time consuming and difficult to verify
A Holistic Solution is needed…
December 2, 2014 19
4 Essential pillars for Effective Supply Chain Management
1. Visibility
2. Flexibility
3. Collaboration
4. Control
December 2, 2014 20
Global Supplier Management The 4 steps for better visibility & control :
Collection and cleansing of supplier information
Business profile completion • Additional Modules
Verification services
Risk-based analysis
1
2
3
4
December 2, 2014 21
GSM Case Study 1: Chemicals, Netherlands
The challenge:
• Need to capture water and carbon foot printing within their top 250 suppliers.
• Essential for managing preferred supplier relationships and reporting needs for Dow Jones Sustainability Index, and maintaining innovation in their business
• Education Key, but also Score, analyze, benchmark in one place
• Outsourcing Key
December 2, 2014 22
GSM Case Study 1: Chemicals, Netherlands
The Solution:
• Online website based system with 24/7 access
• Option: invite all suppliers onto the system & automate communication to them, supported by in country Intertek
• Customized questionnaire to ask key information designed by Intertek Environmental team
• Scoring based on business needs
• Reporting options to see results defined by their reporting needs
• Risk Reporting: Strengths & Weaknesses for supplier guidance
December 2, 2014 23
Carbon Footprint Report – example
December 2, 2014 24
GSM Case Study 2: Automotive, Germany
The challenge:
• Wanted a risk screening platform for new suppliers and management of current suppliers with regards to sustainability needs
• Important to have multiple modules depending on supplier type for relevance
• Important to be used in compliance management decisions
• Suitable to share with other clients
December 2, 2014 25
GSM Case Study 2: Automotive, Germany
The Solution:
• Designed multiple modules within the sustainability area to meet different supplier types
• Scoring made relevant and similar within each module to ensure comparability
• Results designed to make clear where the supplier has compliance issues to ensure clear next steps
• Incentivization steps explained to all suppliers during on-boarding to encourage completion
• Option: show improvement during the year & adjust scoring
December 2, 2014 26
Automotive Example Report
December 2, 2014 27
1. The less you see, the less you know;
The less you know, the greater the risk
2. Do you know who your suppliers really are?
3. Effective Supply Chain Management reduces unforeseen risks
4. Information Management and Enforcement is essential
Conclusions
December 2, 2014 28
Thank you for your attention
www.intertek.com 29
Who is Intertek?
Intertek provides quality and safety services that not only
help customers provide quality products and services but
also adds value to their business.
We deliver these services through our global network and as
a result have developed an unrivalled reputation for fast
execution of work.
www.intertek.com 30
Our Mission
Our mission is to add value for our customers by
helping them achieve their desired level of quality and
safety for their products, assets and processes; to
protect their brands and enable their success in the
global marketplace.
www.intertek.com 31
Our Heritage
Caleb Brett founds a marine surveying business
1885
Thomas Edison establishes what is later renamed as the Electrical Testing Laboratories (ETL)
1896
Virginius Daniel Moody establishes Moody Engineering for construction and electrical engineering projects
1911
Intertek and Moody International join forces
2011
Intertek Today: Valued Quality. Delivered.
Today
Caleb Brett founds a marine surveying business
1885
Thomas Edison establishes what is later renamed as the Electrical Testing Laboratories (ETL)
1896
Virginius Daniel Moody establishes Moody Engineering for construction and electrical engineering projects
1911
Intertek and Moody International join forces
2011
Intertek Today: Valued Quality. Delivered.
Today
www.intertek.com 32
Our Organisation
Our Global Business Lines
Agricultural Services
Cargo & Analytical Assessment
Government and Trade Services
Minerals
Business Assurance
Exploration & Production
Industry Services
Life Sciences (Food; Chemicals & Pharmaceuticals)
Tradegood
Building Products
Electrical/Wireless
Toys & Hardlines
Product Intelligence
Softlines
Transportation Technologies
Our Services
Testing
Inspection
Certification
Auditing
Outsourcing
Advisory
Training
Quality Assurance
www.intertek.com 33
An Extensive Global Network
• FTSE 100 company in the
Support Services sector
• Market capitalisation at £4.7
billion
• Revenue generation of over
£2bn in 2013
100 More than
countries
1,000 More than
laboratories
and offices
36,000 people
www.intertek.com 34
Our Customer Focus
Why are we important to our customers?
Because we facilitate their success through…
Speed to Market To cut lead times and costs without cutting corners on safety while gaining competitive advantages
Reducing Risk To reduce and avoid financial, operational and environmental risks to their activities
Brand Protection Protecting our clients’ corporate reputation and brand value
Focused Resources Enabling customers to free up valuable resources to allocate to core services, improving productivity and efficiency
www.intertek.com 35
Our strategic portfolio
RETAIL & MANUFACTURED
PRODUCTS COMMODITIES
& MATERIALS
INDUSTRY
ASSETS
Consumers
Business Assurance
Energy
Chemicals & Pharma
Minerals
Food & Agri
www.intertek.com 36
R&D Performance Performance
Issues/Returns/
Recalls
Certification -Compliance
(Tech, Env, Social)
Production Distribution
End user
Supply/ Value Chain
Strategic Support for the Supply/ Value Chain
Training
Advisory
Certification
Auditing
Inspection Outsourcing
Quality
Assurance
Testing
CSR
www.intertek.com 37
Some of Our Clients
www.intertek.com 38
Valued Quality. Delivered.