DescriptionOver the past decade organizations have faced relentless customer demand for better value at less cost, individual customization, greater choice, faster delivery, higher quality, exceptional service, and more recently – increased environmental and social consciousness. The organization’s weapon of choice to address this increasing demand has been the supply chain. However, as the supply chain footprint changed (e.g. outsourcing, off-shoring and customer/vendor empowerment) so did the organization’s exposure to uncertainty. Organizations were taken by surprise since this exposure was unanticipated, complex and beyond their ability to manage. As customers become more demanding and change occurs at an even greater pace, supply chain risk continues to propagate like a parasite. Organizations and societies are at much greater risk of systemic failure because of the massive interdependency throughout global supply chains. The priority now is two-fold; play catch-up and address these massive gaps while deploying more intelligent and integrated strategies (i.e. social aware, instinctive, dynamic and predictive) for dealing with continuous change.
Single Point of Failure: The 10 Essential Laws of Supply Chain Risk Management uses analogies and dozens of case histories to describe the risk parasite that infects all supply chains while revealing methods to neutralize that parasite. The book addresses the questions: What are the "single points of failure"? How exposed are customers, investors, other stakeholders and ultimately the organization? What is the measurable impact (i.e. brand, financial, strategic, and non-compliance)? Who establishes the "risk paradigm"? How does the organization efficiently and effectively allocate precious resources - time, people, management attention, and capital? How is success measured? This book is both technically powerful and effectively realistic, based on today's complex global economy.
About the Author xi
Introduction Getting to the Truth 1
Chapter 1 The Laws of the Laws 9
Laws of the Laws
Risk Management Defined
Law of the Laws #1: Everyone, without Exception, Is Part of a Supply Chain
Law of the Laws #2: No Risk Strategy Is a Substitute for Bad Decisions and a Lack of Risk Consciousness
Law of the Laws #3: It’s All in the Details
Law of the Laws #4: People Always Operate from Self-Interest
Indirect and Secondary Impacts
What Can You Conclude?
Chapter 2 Law #1: If You Don’t Manage and Lead Change, You Have to Surrender to It 31
The Risk Wake - Up Call — Planned Change, Unplanned Consequences
We Can’t Change the Past, but . . . Can We Change the Future?
Can You See the Icebergs Ahead?
Chapter 3 Law #2: The Paradigm Should Destroy the Parasite: Begin by Defining the Paradigm, Not by Fighting the Parasite 61
The Paradigm in Action
Why Does the Organization Need to Identify a Supply Chain Risk Paradigm?
Beware! The Paradigm Can Shift without Notice
If the Shoe Fits
Chapter 4 Law #3: Manage Your Business DNA in a Petri Dish of Evolving Risk 87
Expanding the Risk Awareness Universe
Know Your Business—Know Your Surroundings
The Keys to Your Risk Kingdom
Your Operation’s Complete Footprint
Your Action Plan
Chapter 5 Law #4: In Supply Chain Risk Management, Demand Trumps Supply 115
Building Your Demand-Based Strategy
Market and Client Factors to Consider
Chapter 6 Law #5: Never Set Up Your Suppliers for Failure 143
Supply Chain Risk Management Program
Sourcing Strategies That Create More Risk, Not Less
Trust but Verify
Chapter 7 Law #6: Managing Production Risk Is a Dirty Job: Focus on Managing the Endless Risk of Manufactured Weakest Links 173
Going Global with the Production of Risk
A New Collaborative Effort
Why Is Production So Critical?
Part Two of the Double Whammy: Labor
Chapter 8 Law #7: The Logistics Risk Management Rule: Managing the Parts Does Not Equal Managing
the Whole 199
What Is Logistics Risk?
Cargo and Warehouse Theft
The Piracy Risk
What’s at Risk?
Single Points of Failure and Aggregate Risk
Supply Chains Don’t Survive on Product Flows Alone; Information Flows Are Essential
In the End It’s All about the Priorities and Economics
Chapter 9 Law #8: Mitigation: If Supply Chain Risk Management Isn’t Part of the Solution, It Will Become the Problem 225
Now What Do I Do?
Enter the Risk Intelligent Supply Chain
Economic Change—A Catalyst for Redefining
At Time of Disruption
What Is Risk Mitigation?
Chapter 10 Law #9: Financing: The Best Policy Is Knowing What’s in Your Policy 249
Insurance and Its Role in Supply Chain
Background on Insurance in the Supply Chain Risk Area
Current Insurance Solutions and Their Limitations
Introducing Supply Chain Insurance: Approach and Challenges
Corporate Customer Benefits Arising from Supply Chain Insurance
What Does the Future Hold?
A View from the Insurer’s Side
Chapter 11 Law #10: Manage the Risk as You Manage Your Own: Your Supply Chains Are All
Interdependent but Unique 279
Questioning Old Assumptions
Personal Laws of the Laws