(See: Supply Chain Visibility)
SCM BPO is the strategic outsourcing of one or more supply chain processes to an external service provider. The scope of SCM BPO includes supply chain planning (SCP) and analytics, direct material sourcing and procurement, manufacturing management, and logistics management.
The Resilient Enterprise was written by Dr. Yossi Sheffi and published in 2005. In The Resilient Enterprise, Dr. Sheffi makes the case for corporate resilience, asserting that resilience investments can be turned into competitive advantage. Through numerous case studies and stories, Dr. Sheffi explores high-impact/low-probability disruptions and the tools for companies to reduce the vulnerability of their supply chains.
Supply chain network design is an operational practice that relies on risk evaluation and mitigation at the network level, focusing on:
- Node locations
- Transportation routes
- Capacity thresholds
- Number of suppliers
Time-to-Recovery is the gap in time between when a disruptive event happens and when the company can restart normal production. It signifies the time for a supply chain tier to fully recover after a particular disruption. TTR includes: the duration of recovery efforts to restart production and delieveries at the disrupted supplier; the time taken to locate, qualify, buy, and use parts from an alternate source; the duration of reengineering processes to utilize other types of available components and capacities.Identifying the Time to Recovery for each node in a supply chain is a critical component in planning for unexpected disruptions. By inspecting supply chain nodes individually, one can calculate the financial impact of each node. Determining the TTR for each node requires a complete analysis of a product's Bill of Materials (BOM), multi-tier supplier data, and transportation routes. Comprehensive TTR intelligence reduces the overall risk for manufacturers and the businesses they supply.
Supply Chain Network Mapping is a process to create an end-to-end map that yields the connections, relationships, and dependencies between internal manufacturing and partner supplier sites. It is a critical factor in acheiving supply chain visibility by identifying the multiple sub-tiers of an end-to-end supply chain. Supply chain network mapping should document the factors that can affect operations such as:
- Supply chain partners with the highest spending levels affecting major value flows
- Dependencies and interdependencies (including utilities and other critical infrastructure)
- Single source suppliers
- Upstream and downstream partners
- Logistics, storage and transportation
- Labor suppliers
- Contractual and compliance requirements
- Sensitive internal information
Upstream is the direction in a supply chain opposite to the flow of materials. The furthest upstream point of a supply chain is the collection of raw materials and sourcing, whilst the furthest point downstream in a supply chain is the customer.
Supply Chain Resilience, or Supply Chain resiliency Management (SCrM), refers to the capability of a supply chain network and individual suppliers to recover quickly and cost-effectively from an event with minimal to no impact to the normal flow of supplies.
A category of risk metrics that describe, in terms of probability, the market risk of a trading portfolio over a given period of time. Rather than an expected value of loss, VaR is a conditional estimate of loss. Widely used by banks, securities firms and commodities merchants, VAR can also be used to evaluate and manage risk in the supply chain. VAR is the sum of the probability of disruptive events multiplied by the financial impact of the events for a specific process, supplier, product or customer. The calculation of VaR for different types of disruptions helps companies prioritize proactive risk mitagation efforts and reactive recovery efforts during crisis response.
Supply Chain Risk is the likelihood and consequence of an event, at any point in the end-to-end supply chain, to disrupt the normal flow of supplies and/or result in negative impacts to downstream channel product flows and supporting infrastructure and services. Supply chain risks can manifest in an innumerable amount of ways; however, for practical purposes, supply chain risks can be distilled into the following categories:
- Process-oriented risks at production sites
- Supplier-oriented risks at direct or indirect supplier sites
- Upstream and downstream transportation/logistics risks
- Operational risks at the agency, department, division, branch, unit or corporate level
- Regulatory risks (i.e. legislative, compliance, intellectual property, sovereign) at the country or regional level for multinational enterprises
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