Yearly Archives: 2010

The impact of supply chain glitches

Revised on: 2015-09-03

The other day I wrote about supply chains and disasters. Today I will deal with something that is much less catastrophic and write about supply chains and glitches. However, to the shareholders, a supply chain glitch may be just as disastrous (pun intended) as a supply chain disaster. In The effect of supply chain glitches on shareholder wealth from 2003, Kevin B Hendricks and Vinod R Singhal investigate the shareholder wealth effects of supply chain glitches that resulted in production or shipment delays, using a sample of 519 announcements made during 1989-2000. Here they find that glitch announcements on average decrease shareholder value by near 11%. How did they arrive at this value?

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London Olympics and Business Continuity

Revised on: 2015-09-12

Are UK businesses, and in particular London businesses, unprepared for the London Olympics in 2012? A recent report by Deloitte would suggest so. Over two-thirds of large companies in the UK expect the London 2012 Olympic and Paralympic Games to have virtually no impact on their ability to operate “business as usual”. Only 24% of London companies expect a medium level of disruption with just 16% planning for a high level of impact during the Games. They do realize that this event is a bit larger than the average Saturday football match, don’t they?

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The impact of supply chain disasters

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Revised on: 2015-09-28

Disasters. The result: Damaged infrastructure. End result: Disrupted supply chains. But how do disasters really impact supply chains? What is the supply chain risk of disasters? While the damage done by windstorms and floods may be different from that of an earthquake, do they also impact supply chains differently, and does it even differ by industry or sector? Is it different upstream or downstream the supply chain? According to what Nesih Altay and Andres Ramirez wrote in their very recent article Impact of disasters on firms in different sectors: Implications for supply chains, the kind of disaster and the place a company has in the supply chain matters considerably. Interestingly, so they say, upstream partners enjoy a positive impact, while downstream partners have to plan for the opposite.

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In memoriam David Kaye

Revised on: 2015-09-26

Sad news. I don’t always keep up with the subjects of my reviews, and today I was very saddened to learn that David Kaye passed away more than a year ago. David Kaye was the author of Managing Risk and Resilience in the Supply Chain, a book I reviewed on this blog some 18 months ago. David Kaye was a leading author, lecturer, examiner and workshop leader on risk management and business continuity subjects. He guided a diverse range of companies and public sector organisations on risk related issues around the world. His book was a great inspiration to me when I read it and it will continue to be so in the future.

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It’s already happening…in Norway?

Revised on: 2015-09-12

The food supply chain. Did you know that 25% of the world’s food supply are lost because of spoilage during transportation? That’s what IBM claims in a commercial about how IBM is helping to build a smarter planet: “On a smarter planet, we can use tracking technology to track and trace our food as it makes its way through the supply chain from the farm to our table. IBM is helping companies all over the world monitor our food’s temperature, pinpoint contaminations faster, prevent spoilage, and ensure the safety of the food we eat. It’s already happening in places like Canada, Norway, and Vietnam.” My own Norway mentioned by IBM? I’ve got to see this…

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Toy stories: lessons to be learned

Revised on: 2015-09-08

Christmas. Toys. Two things that belong together. But it isn’t always a happy story. Not only do seasons play a big role in supply and demand, so do fads; what is popular today may not be so anymore tomorrow, and as if that wasn’t enough to cope with, product safety issues are probably keeping more CEOs up at night than the unpredictability of sales figures. The year 2007 will be particularly remembered as the year the toy industry was shaken by a seemingly endless stream of recalls. Way ahead of this, in 2001, M Eric Johnson wrote Learning From Toys: Lessons in Managing Supply Chain Risk from the Toy Industry. Here he shows that how the toy industry handles supply chain risk is applicable to many other industries as well.

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Control or laissez-faire?

Revised on: 2015-09-09

Maintaining a company’s competitive advantage depends on managing and controlling a global supply chain that is perhaps never static, and one major supply chain risk is that supply networks are constantly changing. Supply chains, once established, have become increasingly unpredictable in today’s global and highly dynamic business environment. No sooner have you mapped your supply chain end-to-end and devised a strategy for how to manage it, the chain changes on you – new and better suppliers emerge and new relationship configurations pop up. Perhaps not controlling, but letting things happen and letting supply networks emerge is the best management strategy? According to Supply networks and complex adaptive systems: control versus emergence by Thomas Choi, Kevin Dooley and Manus Rungtusanatham supply chain managers must appropriately balance how much to control and how much to let emerge.

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Supply Chain Risk Management Forum

Revised on: 2015-09-12

Is your supply chain risk keeping you up at night? Maybe it’s time to learn how risk management can improve business performance? For that you may want to consider attending the Supply Chain Risk Management Forum in Toronto, Canada on March 29, 2011. The conference is a follow-up on last year’s successful Strategic Supply Chain Management Forum, and in response to the positive feedback and suggestions of attendees and sponsors, this year’s one-day event is focused specifically on a current critical supply chain issue: supply chain risk.

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Adaptation versus Transformation

Revised on: 2015-09-12

Many businesses believe themselves to be nested in a stable environment and are confounded when things suddenly change, and the world today no longer is the same world it was yesterday. Adapt or transform, that is the question, and in Adaptive Fit Versus Robust Transformation: How Organizations Respond to Environmental Change, written by Cynthia Lengnick-Hall and Tammy Beck in 2005, both options are explored. While adaptation may work temporarily, transformation and building a resiliency capacity is what works best in the long run. What is it about resilience that is so important, and most importantly, why?

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German Autos at risk? Perhaps not.

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Revised on: 2015-09-22

The German automotive industry. Volkswagen, Mercedes, Porsche, Audi, BMW. The embodiment of craftsmanship, functionality and reliability. Cars that work and an industry that knows how to make it work. But how about supply chain risk management? Does that work equally well? That is what Jörn-Henrik Thun and Daniel Hoenig set out to investigate in daptive Fit Versus Robust Transformation: How Organizations Respond to Environmental Change. Interestingly, the results show that the group using reactive supply chain risk management seems to do better in terms of disruptions resilience or the reduction of the bullwhip effect, whereas the group pursuing preventive supply chain risk management seems to do better as to flexibility or safety stocks.

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Supply Chain Logistics Risk in Germany

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Revised on: 2015-09-12

What are the most common supply chain and logistics risks that businesses and logistics providers have to deal with? Here is a study that provides the most complete answer to that question that I have seen to date. Risikomanagement in der Supply Chain – Status Quo und Herausforderungen aus Industrie-, Handels- und Dienstleisterperspektive by Hans-Christian Pfohl, Philipp Gallus and Holger Köhler is a meticulous study from Germany that speaks for itself in describing which risks that have which probability and which impact among businesses and among logistics providers. Note that I use supply chain and logistics risks. That is because this study separates business risks from logistics providers risk, and that is a novel approach I haven’t seen too often.

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CALL for Papers: NOFOMA 2011

Revised on: 2015-09-12

NOFOMA is the network of Nordic researchers within the field of Logistics and Supply Chain Management and each year they host a conference on the latest research in logistics and supply chain management. NOFOMA 2011 will be hosted in Harstad, Norway, June 9-10, 2011. It may be a bit early, but the deadline for paper submission is only some two months away. While supply chain risk issues are not mentioned as a particular topic in the call for papers, I am sure that logistics risks and related subjects will be covered nonetheless. I have many times considered submitting a paper, and maybe this time, since the conference is on home turf, I should really do it. So, what are the hot trends for logistics and supply chain management research in 2011?

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Six levels of risk management

Revised on: 2015-09-10

In spite of all efforts to design safer systems, we still witness severe, large-scale accidents. A basic question is: Do we actually have adequate models of accident causation in the present dynamic society? That was the question asked by Jens Rasmussen in 1997 when he wrote Risk management in a dynamic society: a modelling problem. Here he argues that risk management includes several levels ranging from legislators, over managers and work planners, to system operators. Should supply chain risk management follow suit?

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CPM 2010 East in NYC

Revised on: 2015-09-12

Behind this perhaps cryptic title (for some, but not for others, especially those in the BCM industry) is the Contingency Planning & Management Conference (CPM 2010 East) that is coming up November 3-4 in New York City. It offers a 2-day, 4-track advanced-level program taught by expert faculty in small, classroom settings. Joseph Bruno, Commissioner of the NYC Office of Emergency Management, will also be this year’s keynote speaker. I won’t be going there myself, but if you’ve never attended before and are interested in attending, through my contacts I am pleased to offer a special registration code that will save you $100 off the full conference rate.

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Organizing Resilience

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Revised on: 2015-09-10

Resilience. A word that his been in the media perhaps more than ever before these days. I am of course thinking about the rescue of the Chilean miners and how it was possible for them to survive and emerge almost unaffected (as many of them seemed to be) after being trapped underground for 69 days. How is it possible that they adjusted and almost thrived in their adversity? Resilience is the answer. Resilience is what distinguishes those who fail from those who succeed, say Kathleen Sutcliffe and Timothy Vogus in Organizing for Resilience, a book chapter they wrote in 2003. Here they provide insights into why resilience is not something remarkable or extraordinary, but rather a result of an organizational learning process.

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Book Review: Security Risk Management – Body of Knowledge

Revised on: 2015-09-12

A Wiley book rarely lets you down, and this one doesn’t either. With a refreshing Australian touch, distinctively unlike many American books on the same subject, this 445-page heavy-weight of a book has it all. Security Risk Management – Body of Knowledge, written by Julian Talbot and Miles Jakeman, is a vast and practically all-encompassing repository of knowledge, filled with accepted best practices, innovations and research in the evolving field of security risk management. This book does not have a narrow scope, it is wide open, and it extends towards business continuity, resilience and even supply chain management.

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A new and better way of classifying and managing risks?

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Revised on: 2015-11-12

Risk. The probability of an event occurring and the consequences of the event occurring. That is how most of us would classify and compare risks in a scientific manner. Does it have to be like that or is there a different, or perhaps even a better way? Maybe there is. Ten years ago, Andreas Klinke and Ortwin Renn set out to do just that, in Precautionary principle and discursive strategies: classifying and managing risks. Here they developed an integral risk concept based on eight criteria for classifying and managing risk. A novel approach, but what happened to it?

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The world we live in: Risk Society

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Revised on: 2015-09-11

We live in a world that is full of risk, risks that we to a large degree have created ourselves, and where naturally occuring risk hardly exists anymore. That is a risk society. With that at the back of his mind, Jan Hovden of the Norwegian University of Science and Technology, NTNU, developed a framework that incorporates risk and vulnerability, that includes safety hazards and security threats and that adds both a micro and a macro perspective. It is a framework that fully accounts for most if not all of the risks that we have to face to a larger or lesser extent. Why is this framework not used more often?

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Single, sole, dual, multiple sourcing?

Revised on: 2015-09-22

Old classics never die. While some papers are written, published and quickly forgotten (because no one cites them), other papers stand the test of time and survive as classic or seminal papers. A risk/benefit analysis of sourcing strategies: Single vs. multiple sourcing, written by Mark Treleven and Sharon Schweikhart in 1988 is perhaps not the most cited paper since its inception more than 20 years ago (Scopus only comes up with 31 citations), but it is a paper that is cited in the supply chain risk literature until this day, and for a good reason, as it was among the first papers to examine the costs and benefits of single versus multiple sourcing strategies.

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Can your business take a blow?

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Revised on: 2015-10-06

Are you prepared for whatever mishaps your business throws at you? If you’re not, you better start learning Dutch and you will be able to find out how you can better your resilience. Why? Because today’s post is based on a Dutch book I found the other day. Published in 2009, and written by Bart Lammers, Walther Ploos van Amstel and Pascal Eijkelenbergh, Risicomanagement en Logistiek translates as “Risk Management and Logistics” and is a short and succinct handbook that I wish will be translated into English soon. Why? Because this book contains an excellent new framework for logistics resilience and how to achieve it. I’ve done my best in translating the essential parts, but I could still use some help from my Dutch readers.

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