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Articles in category: Risk Management
For the Dodd-Frank reporting year 2013 98% of suppliers filed with no sourcing determination. Didn't know or not telling? While we can't be certain why virtually all filers did not have meaningful sourcing declarations, we do know that supplier education & training can improve suppliers' response time and completion rates for conflict minerals due diligence.
Seven of the world's largest industry associations collaborated with Source Intelligence and Schulte Roth & Zabel LLP to launch a web-based training module within the Conflict Minerals Resource Center (CMRC). The training module is based on the best practices developed by leaders in these ...(Read Full Article)
The Dominican Republic, Venezuela and Kyrgyzstan are the countries most susceptible to supply chain disruption, according to a new global index.
Norway, Switzerland and Canada topped the list of nations most resistant to such disruption – one of the leading causes of business volatility – on the 2014 FM Global Resilience Index.
The online tool ranks the business resilience of 130 countries, and is designed to help businesses better assess and manage supply chain risk.(Read Full Article)
The 2014 FM Global Resilience Index released today finds Norway, Switzerland and Canada top the list of nations most resilient to supply chain disruption, one of the leading causes of business volatility. The first-of-its-kind Index, commissioned by FM Global, one of the world’s largest commercial property insurers, is an online, data-driven tool and repository ranking the business resilience of 130 countries. More than a year in development, the Index is designed to help executives better assess and manage supply chain risk.(Read Full Article)
Given the limited exposure many companies have to the extended supply chain, the gateway to learning more about lower tier vendors may rest with how much our tier-one suppliers know about their own supply base. In a recent article, Sourcing Journal Online published a list of “7 questions to ask to assess risk and ensure supply.” Many of these queries will individually say quite a bit about the level of risk our tier-one suppliers are building into OEM supply chains overall – or whether they’re reducing comparative risk exposure.Leave A Comment posted in Commentary by Jason Busch (Read Full Article)
Most supply chains move in one direction: New products move from manufacturing to a customer. Increasingly, those products are coming back into the supply chain, either as returns for repair under warranty work or to be remanufactured for reuse. In fact, new research from the nonprofit organization APICS Foundation, finds that remanufacturing serves a broad array of strategic interests for companies, provides considerable career advancement potential for individuals and has become instrumental in furthering sustainability initiatives.
“Remanufacturing was once considered a niche process,” says Jonathan Thatcher, director of research, APICS Foundation. “Today it is becoming a mainstream practice.”
The findings ...(Read Full Article)
Managing risk is never far from the minds of CPOs. Risk management frequently stands out in Procurement Leaders’ Procurement Intentions Reports as a major concern. The latest Report highlights operational risk as a major focus for CPOs this year.
Some external risks are obvious, such as supplier financial failure, infrastructure-damaging climate events, inadequate building codes or working practices in local or far-flung factories, or geopolitical upheaval, all of which can disrupt supply, and some of which can damage corporate image.
Many procurement transformations fail because purchasers underestimate the importance of change management.
That was the message from Blaine Hurley, senior director – sourcing excellence, global strategic sourcing at Whirlpool, who was speaking at the Institute for Supply Management annual conference in Las Vegas, US last week.
“Change management in a lot of people’s mind is just training your associates and informing them about the change that’s coming," Hurley said. "Change is difficult, don’t give anyone any illusion that it’s not, but not changing is failing.(Read Full Article)
Internal audit is a team of versatile members who assist an organization’s management to ensure controls are appropriately exercised, processes are followed, reporting is effective, and risks are mitigated. Their role makes them akin to a policing force within the organization. And the typical human behavior around cops extends to the office environment as well, and employees are wary of even talking freely when a person from internal audit is around.(Read Full Article)
“Negotiation has, for decades, been viewed as a zero-sum game, with the success for one party being at the expense of the other.”
Tim states in the article that the market trends are changing towards more collaborative and sustainable supplier relationships. Bottom line preassure, a shift in the purchase of direct materials and products moving towards a growing volume of services and solutions as well as the need for greater efficiency, speed and improved business judgment. Getting the lowest price although not ...(Read Full Article)
Supply chain risk has fallen slightly from its all-time peak last year but businesses must remain vigilant about the threats it poses, according to the first quarterly Risk Index published by CIPS.
In the first quarter of 2014, the Index – where risk is rated between one and 100 - recorded a score of 79.8, compared with 82.2 in the final quarter of 2013. This was attributed to improved economic prospects in the UK, US and Germany, and stability in the major exporting economies of the US and China preventing a major increase. The Index was at its highest in ...(Read Full Article)
THE latest Ernst & Young-Namibian Fraud & Corruption Landscape Survey shows that 79% of Namibian businesses view fraud and corruption as a big risk.
Executive management and risk management staff of 90 Namibian companies were surveyed for their views on fraud, bribery and corruption in Namibia and their efforts to mitigate these risks.(Read Full Article)
In 2013, 80% of supply chain leaders had a material supply chain disruption. It was not just one. The average company had three. Yet, in a study that we just completed, when asked about business pain, supply chain risk rates low. How come?
It is new. It lacks a consistent definition and set of practices. Companies reward the urgent. Risk management requires a focus on the important. It requires leadership and orchestration. Teams don’t know what to do. The companies that are the most mature learned the hard way. They had a disruption.(Read Full Article)
Three more officials have been arrested in the South African Social Security Agency's ongoing fight against fraud and corruption. The officials, who are based at the KwaMhlanga local office in Mpumalanga, were arrested during a joint operation on Thursday for defrauding the agency of a total amount of R752 460.
The joint operation is between SASSA, the SA Police Service (SAPS) and the National Prosecution Authority.
The arrest of the officials follows a report by a member of the public on 8 January 2012, who informed the agency that two beneficiaries from Verena in Mpumalanga, were receiving fraudulent disability ...(Read Full Article)
Five elements of a resilient supply chain
Supply chain managers tend to rely heavily on data to support decision-making processes. Data proves helpful in planning for risk but is insufficient in light of the massive number of scenarios that could disrupt a supply chain. Developing a plan to deal with so many unknowns requires a slightly different set of priorities. There are five key elements that distinguish a resilient supply chain:
1. Prepared: Designing a supply chain that is prepared for a catastrophic disruption involves understanding the risks, maintaining deep visibility into the supply chain resources, and developing operational readiness ...(Read Full Article)
Banks around the world, consumed with meeting more stringent capital regulations, will miss a deadline to upgrade outdated software for ATMs and face additional costs to Microsoft to keep them secure.
The US software company first warned that it was planning to end support for Windows XP in 2007, but only a third of the world’s 2.2 million ATMs that use the system will have been upgraded to a new platform, such as Windows 7, by the deadline next month, according to NCR, one of the biggest ATM makers.(Read Full Article)
What the Age of the Consumer Means to Industrial Manufacturing: A Conversation with Simon Ellis, Part II
There is no question that consumer demand is now driving the consumer goods and retail industries. But how does it impact industrial manufacturing? To get some Expert Insights on this topic, Supply Chain Nation spoke with Simon Ellis, practice director, supply chain strategies, for IDC Manufacturing Insights. In Part I of this series, Ellis discussed how consumer demand and what IDC calls the third computing platform are impacting industrial manufacturers.(Read Full Article)
Facebook’s acquisition of WhatsApp for a reported $19 billion (£11.3 billion) shows how procurement can get involved in high-risk high value projects, such as IT systems and major capital expenditure. Here are three points to inform your thinking: • Cost, price and value. The acquisition price of $19 billion has very little to do with cost because WhatsApp employs about 55 people and charges 69p in the UK for an annual service – it’s free for the first year.(Read Full Article)
Supply chain disruption moved down the list to 16th place, after being included in the top 10 concerns in last year's annual Business Continuity Institute (BCI) Horizon Scan.
This is despite increasing supply chain complexity featuring within the top five emerging trends and the fact that 75 per cent of respondents experienced at least one supply chain disruption during the previous year.
Is this a symptom of short term memory loss, because the past year has been less significant than the previous two as far as natural disasters are concerned, or has risk management really improved?(Read Full Article)
Supply chain disruption, natural catastrophes, and fires or explosions are the risks that global insurance companies are most concerned about in the coming year.
The Allianz Risk Barometer 2014 found that 43 per cent of corporate insurance experts are worried about business interruption and supply chain risk. This is down slightly from last year’s 46 per cent. Natural catastrophes (storms, floods, earthquakes) are second on the business risks list.
Due to the complexity and inter-dependencies of these megatrends and the diversity of affected countries, markets and companies it’s difficult to assess the impact on procurement but leading procurement managers foresee major changes in a couple of focal areas within the next decade.(Read Full Article)
Supply chain management has been in the news lately, and not in a favorable way. Recently, Hitachi Consulting revealed that supply chains are not a major concern for many top executives who responded to its survey, a fact that is jarring to say the least, and hopefully not indicative of management sentiment generally.
Then, there were all the reports of the horrific Bangladesh factory collapse that killed 1,100 garment workers. Those reports included one about a clothing manufacturer who claimed no responsibility for the victims. Yes, the company is part of a consortium funding safety upgrades to Bangladesh factories ...(Read Full Article)
In an unusual move, the eThekwini Municipality intends to extend its contract with a liquidated company that has been operating the city’s parking meter system. This is according to papers before the Durban High Court in an application for extended powers brought by liquidators Johannes Muller and Hussan Goga, who are handling the affairs of Emtateni Logistics.
Judge Gregory Kruger granted an order which extends the liquidators’ powers and enables them to continue the contract with the city.(Read Full Article)
A methodology for properly classifying information risk is the first rule of designing an effective supplier assurance programme. It may sound obvious but in practice not many organisations do it. Fewer still do it well. But unless your programme is based on a clear understanding of the value of the information you have stored, along with your regulatory obligations, it is very easy to end up with a one-size-fits-all approach that treats every supplier the same.(Read Full Article)
Purchasers must monitor their suppliers and build strong relationships if they want to avoid risks in procurement.
That’s the message from Jaguar Land Rover’s director of purchasing Ian Harnett, who was speaking at the ‘Resilience, sustainability, integrity and emerging trends – managing supply risk in the 21st century’ event. Harnett explained that the company looks at risk management on a regular basis because it demonstrates “certain things that you cannot ignore”. He explained that as the company has grown significantly over the past years........
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