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Enhancing Supply Chain Security: Leadership and Risk Management

Discover the complexities of supply chain security, importance of risk assessment, and the impact of effective leadership. Learn how to identify and manage risks for a successful and secure supply chain management.

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Enhancing Supply Chain Security: Leadership and Risk Management

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  1. Supply Chain Security Joseph L. Walden Colonel, US Army, Retired Supply Chain Research Institute

  2. Supply Chain Security “We have proved to our management that good security is good business.”— Ann Lister of Texas Instruments

  3. Supply Chain Security Supply Chains are inherently complex, dynamic, and fluid, characterized by uncertainty, ambiguity, and friction. These characteristics cloud the operating environment: they create risks

  4. Agenda • What is Supply Chain Security • Is it Important? • Is it a Problem? • Risk Assessment/Risk Management • Leadership and Security • Conclusions/Questions

  5. Supply Chain Security “If you do things the way you’ve always done them, you’ll get the same things you’ve always got.” -Darrell Waltrip NASCAR Driver This is not your Dad’s Supply Chain!

  6. Important? • September 11, 2001 - $2 billion per day lost • Longshoremen Strike – 300-500 ships backed up • Potential loss of attack to major port - $20 billion estimate

  7. Problem? • Terrorism • Obsolescence • Pilferage • Information Breach • Proprietary Data – Camera Phones; Thumb Drives • RFID Data Security • 66% of Inbound US Sealift Containers arrive at 20 Major Ports • >58 % of all inbound US containers come through New York/New Jersey, Los Angeles, Long Beach • ~44% through Los Angeles/Long Beach in 2003 • Lengthening of Supply Chains – coupled with Globalization SCRI 12/19/2019

  8. Recent Headlines • “Container Security – Expansion of Key Customs Programs Will Require Greater Attention to Critical Success Factors” • “Security and Risk Strategy Become Integrated” – Top Trends for 2006, CIO Magazine, January 2006 • “Computer Security Becomes More Critical” CIO Magazine, January 2006

  9. Recent Headlines • “Supply Chain Security Poses Opportunities, Obstacles” E-Week, Sep 23, 2005 • “Supply Chain Risks Threaten the World’s Biggest Companies” Logistics Today – “Financial executives at some of the world’s biggest companies believe supply chain risks post the top threat to companies revenues.”

  10. Purpose of Risk Assessment Identify those areas of the supply chain that are vulnerable to interruptions of support flow. • People • Processes • Technologies • External events

  11. Risk Assessment The identification and of hazards assessment of hazards to determine risk to include the probability and the resulting severity.

  12. Risk Assessment/Management Steps • Identify the hazards. • Assess hazards to determine risks. • Develop controls and make risk decisions. • Implement controls. • Supervise and evaluate.

  13. How do you identify your Supply Chain Risks? • You have to know your processes • Process maps • Understanding processes • Understanding where risks are • Internal Risks • External Risks

  14. What are your Hazards? • Theft • Pilferage • Competition • Information Systems • Cell Phones • Thumb Drives • Camera Phones • Disgruntled Employees • Lack of Training

  15. Risk Management • Identify the hazards. • Assess hazards to determine risks. • Develop controls and make risk decisions. • Implement controls. • Supervise and evaluate.

  16. What is Risk Management? • Identify Risks • Assess Risks • Control Risks • Balance Risk Cost/Operational Benefits

  17. Risk Management Does Not: • Does not take away the leader’s/manager’s initiative or decision making ability • Eliminate risk or establish a climate of zero defects • Allow the leader/manager to violate any laws

  18. Risk Management Programs • Mitigate Risk • Eliminate Risk • Consequences of Risk or Mitigation – probability and severity • Courses of Action Analysis – Feasible, Suitable, Acceptable? • Manage Risk not react to Risk!

  19. New Problem? • “There were no ‘secure’ rear areas.”General Joseph Heiser on Vietnam Logistics • Sun Tzu – Chapter 1, The Art of War

  20. Supply Chain Security • Supply Chain Security must protect the path from the supplier to the customer. • End to End Security • End to End Visibility – RFID • Information Security • Personal Daily Obligation • Operational Security • Security and Velocity

  21. The Leadership Connection • Training • Visibility • Compliance • Assessment • Risk Management • Know the system → absolute!

  22. RISK MGMT ASSESSMENT/ TRAINING Leadership and Security SC SECURITY PURPOSE/ MOTIVATION VISION/ DIRECTION LEADERSHIP

  23. Conclusion • Risk Assessment • Risk Management • Operational Security • Supply Chain Success • Leadership is the foundation!

  24. Supply Chain Security Final Thought “If master small things, Anything becomes possible” - Mr. Miyagi “The Next Karate Kid”

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