Risk and Consequence: Tales from th

Risk and Consequence: Tales from the Industry
There are quite a few well-known case studies illustrating situations of supply chain risk and subsequent consequences. Here, we review a sample of them — emphasizing diversity both in terms of nature (operational or catastrophic) and consequence (financial and beyond).
A well-known example of supply chain risk management is no doubt the fire that destroyed an electronics component plant in New Mexico in 2000. This plant supplied both Nokia and Eriksson. Nokia reacted promptly, securing components from the market. Eriksson, on the other hand, was left with supply shortages which translated into direct lost sales estimated at $390M. The most significant consequence of this event may have been the subsequent loss of Eriksson’s market
share dominance to Nokia. The different reactions from similar players to a single event in time has become a key illustration point, showing the benefits of monitoring and managing risks in supply chains.
Supplier issues often lead to large and visible consequences because of their upstream position in the supply chain. In 1997, raw material and part shortages resulted in Boeing losing $2.6B. That same year, Toyota halted production for 20 days after single supplier location burned.
Transportation is one of the most critical supply chain functions, and has the potential to bring just-in-time supply chains to an abrupt halt when something unexpected happens. Several events illustrate this point. In 1997, a 15-day Teamsters’ strike severely affected the UPS Company, which at the time controlled 80% of all the package deliveries in the US. The strike subsequently crippled the logistics of numerous U.S. manufacturers. Similarly, the September 2002 shutdown of all the West Coast ports due to the dockworkers’ strike idled manufacturers and/or incurred high costs while parts were flown in.
Cross-border issues, from delays due to random inspections at customs to sudden border closure such as those that followed the 9/11 attacks, lurk constantly and create vulnerability in global supply chains. There are memorable images of trucks full of parts queued up for miles at the US-Canadian border on 9/11, starving the automotive production plants (and others) of materials needed for their just-in-time assembly. While it has long been recognized that reducing inventory buffers is an excellent means of cost savings in the short run, such strategies also place risk on operations when catastrophe hits.
Supply chain visibility, or rather a lack thereof, can further compound problems. During the summer of 2007, toy maker Mattel repeatedly made the headlines for a recall of toys containing significant amounts of lead in the paint. In one specific case, the culprit seemed to be a inventory buffers is an excellent means of cost savings in the short run, such
strategies also place risk on operations when catastrophe hits.
Supply chain visibility, or rather a lack thereof, can further compound problems. During the summer of 2007, toy maker Mattel repeatedly made the headlines for a recall of toys containing significant amounts of lead in the paint. In one specific case, the culprit seemed to be a sub-sub-contractor that decided to use paint from a non-authorized third-party supplier.
Information Technology systems, while sometimes invisible, often play a central role in coordinating the supply chain. While they may attempt to enable optimal transactions among the various supply chain actors, they also introduce significant global dependencies in the supply chain operations and can have dire consequences when unreliable. For example, a glitch in Nike’s demand planning software in early summer 2000 caused supply shortages for the popular Air Jordan footwear. As a result, Nike announced a $100 million sales loss.
There are notable examples of successful proactive risk management where potentially major supply chain weaknesses were identified prior to an event occurring, allowing time to develop appropriate action plans to remove or mitigate the risk factor.
In the first example, a tier one automotive supplier realized that all its suppliers providing one specific component were in financial trouble. They consequently engaged designers to develop an alternative to that component. A similar example involves an aerospace and aviation company, who discovered that two independent business units (helicopters and jets) relied on the same supplier for key material. They subsequently chose to diversify suppliers. In both cases, companies reduced their risk positions significantly.
While there may be many more successful examples of proactive risk management of supply chains, companies involved tend not to advertise such events, as this may place them in a vulnerable position with regards to suppliers and/or customers. However, the limited data points that we do have, point to collaborative activity with suppliers and customers as a way to reduce risk in the supply chain.sntractor that decided to use paint from a non-authorized third-party supplier.
Information Technology systems, while sometimes invisible, often play a central role in coordinating the supply chain. While they may attempt to enable optimal transactions among the various supply chain actors, they also introduce significant global dependencies in the supply chain operations and can have dire consequences when unreliable. For example, a glitch in Nike’s demand planning software in early summer 2000 caused supply shortages for the popular Air
Jordan footwear. As a result, Nike announced a $100 million sales loss.
There are notable examples of successful proactive risk management where
potentially major supply chain weaknesses were identified prior to an event
occurring, allowing time to develop appropriate action plans to remove or mitigate
the risk factor.
In the first example, a tier one automotive supplier realized that all its suppliers
providing one specific component were in financial trouble. They consequently
engaged designers to develop an alternative to that component. A similar example
involves an aerospace and aviation company, who discovered that two independent
business units (helicopters and jets) relied on the same supplier for key material.
They subsequently chose to diversify suppliers. In both cases, companies reduced
their risk positions significantly.10
While there may be many more successful examples of proactive risk management
of supply chains, companies involved tend not to advertise such events, as
this may place them in a vulnerable position with regards to suppliers and/or
customers. However, the limited data points that we do have, point to collaborative
activity with suppliers and customers as a way to reduce risk in the supply chain.

Kết quả (Việt) 1:

Rủi ro và hệ quả: Tales từ ngành công nghiệpCó những nghiên cứu trường hợp nổi tiếng khá một vài, minh họa những tình huống cấp chuỗi rủi ro và hậu quả tiếp theo. Ở đây, chúng tôi xem xét một mẫu của họ — nhấn mạnh đa dạng cả về thiên nhiên (hoạt động hoặc thảm họa) và hậu quả (tài chính và hơn thế nữa).Một ví dụ nổi tiếng của quản lý rủi ro chuỗi cung cấp không có nghi ngờ là ngọn lửa mà phá hủy một thành phần điện tử thực vật ở New Mexico vào năm 2000. Nhà máy này cung cấp cả Nokia và Eriksson. Nokia đã phản ứng nhanh chóng, bảo vệ các thành phần từ các thị trường. Eriksson, mặt khác, đã được trái với tình trạng thiếu nguồn cung cấp dịch vào trực tiếp bán hàng bị mất ước tính khoảng $390 M. Hệ quả quan trọng nhất của sự kiện này có thể đã là mất thị trường của Eriksson, tiếp theochia sẻ sự thống trị tới Nokia. Các phản ứng khác nhau từ người chơi tương tự như với một sự kiện duy nhất trong thời gian đã trở thành một điểm quan trọng tác giả, Đang hiển thị các lợi ích của giám sát và quản lý rủi ro trong chuỗi cung ứng.Vấn đề nhà cung cấp thường dẫn đến hậu quả lớn và có thể nhìn thấy vì vị trí của họ ở thượng nguồn trong chuỗi cung ứng. Năm 1997, nguyên liệu và phần thiếu kết quả trong Boeing mất $2 .6B. Cùng năm đó, các Toyota ngừng sản xuất cho 20 ngày sau khi vị trí nhà cung cấp duy nhất đốt cháy.Transportation is one of the most critical supply chain functions, and has the potential to bring just-in-time supply chains to an abrupt halt when something unexpected happens. Several events illustrate this point. In 1997, a 15-day Teamsters’ strike severely affected the UPS Company, which at the time controlled 80% of all the package deliveries in the US. The strike subsequently crippled the logistics of numerous U.S. manufacturers. Similarly, the September 2002 shutdown of all the West Coast ports due to the dockworkers’ strike idled manufacturers and/or incurred high costs while parts were flown in. Cross-border issues, from delays due to random inspections at customs to sudden border closure such as those that followed the 9/11 attacks, lurk constantly and create vulnerability in global supply chains. There are memorable images of trucks full of parts queued up for miles at the US-Canadian border on 9/11, starving the automotive production plants (and others) of materials needed for their just-in-time assembly. While it has long been recognized that reducing inventory buffers is an excellent means of cost savings in the short run, such strategies also place risk on operations when catastrophe hits.Supply chain visibility, or rather a lack thereof, can further compound problems. During the summer of 2007, toy maker Mattel repeatedly made the headlines for a recall of toys containing significant amounts of lead in the paint. In one specific case, the culprit seemed to be a inventory buffers is an excellent means of cost savings in the short run, suchstrategies also place risk on operations when catastrophe hits.Supply chain visibility, or rather a lack thereof, can further compound problems. During the summer of 2007, toy maker Mattel repeatedly made the headlines for a recall of toys containing significant amounts of lead in the paint. In one specific case, the culprit seemed to be a sub-sub-contractor that decided to use paint from a non-authorized third-party supplier.Information Technology systems, while sometimes invisible, often play a central role in coordinating the supply chain. While they may attempt to enable optimal transactions among the various supply chain actors, they also introduce significant global dependencies in the supply chain operations and can have dire consequences when unreliable. For example, a glitch in Nike’s demand planning software in early summer 2000 caused supply shortages for the popular Air Jordan footwear. As a result, Nike announced a $100 million sales loss.There are notable examples of successful proactive risk management where potentially major supply chain weaknesses were identified prior to an event occurring, allowing time to develop appropriate action plans to remove or mitigate the risk factor.In the first example, a tier one automotive supplier realized that all its suppliers providing one specific component were in financial trouble. They consequently engaged designers to develop an alternative to that component. A similar example involves an aerospace and aviation company, who discovered that two independent business units (helicopters and jets) relied on the same supplier for key material. They subsequently chose to diversify suppliers. In both cases, companies reduced their risk positions significantly.While there may be many more successful examples of proactive risk management of supply chains, companies involved tend not to advertise such events, as this may place them in a vulnerable position with regards to suppliers and/or customers. However, the limited data points that we do have, point to collaborative activity with suppliers and customers as a way to reduce risk in the supply chain.sntractor that decided to use paint from a non-authorized third-party supplier.Information Technology systems, while sometimes invisible, often play a central role in coordinating the supply chain. While they may attempt to enable optimal transactions among the various supply chain actors, they also introduce significant global dependencies in the supply chain operations and can have dire consequences when unreliable. For example, a glitch in Nike’s demand planning software in early summer 2000 caused supply shortages for the popular AirJordan footwear. As a result, Nike announced a $100 million sales loss.There are notable examples of successful proactive risk management wherepotentially major supply chain weaknesses were identified prior to an eventoccurring, allowing time to develop appropriate action plans to remove or mitigatethe risk factor.In the first example, a tier one automotive supplier realized that all its suppliersproviding one specific component were in financial trouble. They consequentlyengaged designers to develop an alternative to that component. A similar exampleinvolves an aerospace and aviation company, who discovered that two independentbusiness units (helicopters and jets) relied on the same supplier for key material.They subsequently chose to diversify suppliers. In both cases, companies reducedtheir risk positions significantly.10While there may be many more successful examples of proactive risk managementof supply chains, companies involved tend not to advertise such events, asthis may place them in a vulnerable position with regards to suppliers and/orcustomers. However, the limited data points that we do have, point to collaborativeactivity with suppliers and customers as a way to reduce risk in the supply chain.