Supply Chain Risk And What About Ethics?

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Transcript Supply Chain Risk And What About Ethics?

Supply Chain Risk And What About Ethics?

Lee Buddress, Ph.D., C.P.M.

Robert G. Gleason Professor and Director Supply and Logistics Program Portland State University

Supply Chain Risk  Events or actions that result in a transaction or project differing from budget or plan  Events or actions that prevent delivery to customers as promised

Order Winning Characteristics  Design  Lead Time  Cost  Quality/Durability  Service  What Risks Most Impact  Ability to Serve Customers  Profitability

Supply Management Objectives  Continuity of Supply  Least Total Cost of Ownership  Create Competitive Advantage  Sustainable  What Risks Interfere With These Objectives

Supply Chain Risks  Big, Expensive Risks with Low Probability  Medium Risks with Medium Probability  Smaller Risks with High Probability

External Risks

Supply Chain Risk Classification  External Risks  Governmental  Infrastructure  Supplier  Logistical  Price  Terrorism  Natural Disasters  Accidents

External Risks: Governmental  Export Policies  Intellectual Property Protection  Protective Tariffs and Duties  Regulatory Changes  Taxes  Currency Fluctuations  Political Unrest

External Risks: Infrastructure  Roads  Railroads  Ports  River  Sea  Airports  Congestion  Domestic Infrastructure

External Risks: Suppliers  Operational  Equipment  Facilities  Management  Financial  Cultural/Language  Labor  Scalability  Quality  Lead Times  Monopoly/Oligopoly  Technology  Communication  Operational  Sustainability  Social Responsibility

External Risks: Logistics  Supplier Selection  Transportation Equipment  On Time  Freight Damage  Leakage/Shrinkage

External Risks: Price  Trends  Volatility

External Risks  Terrorism  Physical Harm  Personnel  Cyber Attacks/Hacking  Natural Disasters  Earthquakes, Tsunamis  Weather Related  Lightening Strikes  Accidents

Key External Risks  Labor Issues  Quality  Timing  Supplier Selection Process  Total Cost Analysis

Things to Watch  East & Gulf Coast Longshore Contract  West Coast Longshore Grain Contract  Ongoing Row Over Refer Plug-ins  Port Subsidizes Shipping Firms  Carriers Add $150 per Container  UPS/Teamsters Contract Negotiations  New Panama Canal  EU/ Airline Row Over Carbon Emissions  Carrier Capacity Constraints

Internal Risks

Supply Chain Risk Classification  Internal Risks  Policies  Resources  Operational

Internal Risks: Policies  Outsourcing  Low Bid  Freight Terms  Managing  Reverse Logistics  Excess Inventory  Repairs  Sustainability/Social Responsibility  No Standardization  Equipment  Procedures  No Formal Strategies  Not Having Policies

Internal Risks: Resources  Labor  Finances  Equipment  Technology  Automation  Communication  Enterprise

Internal Risks: Operational  Personnel  Numbers, Expertise  Demand Management  Customer  Supplier  Forecasting  Project Management  Specifications

Order Winning Characteristics  Design  Lead Time  Cost  Quality/Durability  Service  What Risks Most Impact  Ability to Serve Customers  Profitability

Risk Prevention/Remediation  Safety Stock  Safety Lead Time  Additional Suppliers  Geographic Dispersion  Ts and Cs  Business Continuity  Ours  Suppliers  Training  ISO 31000 2009  Supply Chain Mapping  Forecasting  Project Management  Review Supplier Selection Process  Supplier Visits  Daily Diligence

Key Risk Management Activity  How Suppliers Are Chosen  Supplier Visits  Supplier Mapping  Forecasting  Daily Diligence

Risk and Ethics

Ethics  More than Gifts and Gratuities  Cialdini’s Influence  Appearances

Unethical Sales Practices  Commercial Bribery  False Shortages  False Price Breaks  Market Allocation  False Delivery Promises  Quotation vs. Invoice  False Representation  Counterfeit  Back Door Selling

Unethical Purchasing Practices  Shopping Bids  Shopping Ideas  Samples  Favoritism  Payment Terms  Contract Quantities  Conflict of Interest International Ethics Issues  Cultural Issues  Reciprocity

Foreign Corrupt Practices Act  Illegal to Make Payments Influencing Purchase Decisions  Exempts “Processing Payments”  Accounting Requirements  Applies to ALL Publicly Traded Companies

Risk and Ethics  Risks to the Organization  Customer Loss  Reputation  Personal Risks  Job  Reputation  Personal Liability

Columbia River Bar http://www.youtube.com/embed/ByGSMme nPDM?rel=0

Questions, Comments, Observations, Conclusions, Arguments?