Supply Chain Risk: The elephant in the room?

The growth and extension of trade beyond a local or regional area into a truly global phenomenon in the last few decades has necessitated a similar expansion of the global supply chain. Even now, in the sluggish environment of drastically reduced trade volumes around the world in the wake of the recession, most supply chain networks have a truly extended and multinational character. Component suppliers, for example, are often on the other side of the world from the point of assembly or distribution of final product. While this can present many supply chain advantages in terms of cost or availability, as well as access to new markets, it also represents an increased risk of catastrophic disruption of supply – whether from natural disaster such as tsunamis, floods and tornadoes or other extreme weather conditions, to criminal and military activity. The management of the risks to supply chains has therefore become a pressing challenge for supply chain planners in the past few years, one which they are sometimes ill-equipped to deal with. The fledgling discipline of supply chain risk management forms a focus at this year’s benchmark SAPICS Conference 2014. A presentation by American professionals Nancy Wendorf, Senior Product Manager with General Dynamics C4, and her colleague Vera Peller, Senior Procurement Manager, focuses on ‘Counterintelligence Warfare Strategies for Supply Chain Integrity’. The discussion addresses the risk management issues inherent in espionage, infiltration, counterfeiting, conspiracies, fraud, black and grey markets, phishing and other scams. The presentation tackles the following topics: •The Top Ten reasons for ‘warfare’ attacks on supply chains •Vulnerabilities of a supply chain that allow counterfeiting •Benchmarking top corporate strategies for successful avoidance •Various country specific cases of counterintelligence tactics •Exposing the biggest offenders in their quest to win •Counterintelligence measures that combat criminal offenders •Potential liability from the proliferation of counterfeit parts •Complying with government regulations and international standards •Future predictions of world proliferation vs. the regulator’s fight The presentation not only addresses the avoidance and detection of counterfeit parts but will delve much deeper into the true threat, rationale and psychological/cultural behavior involved in the supply chain attacks. In a presentation that is sure to strike a chord in the African market, various case studies will be presented with astonishing statistics that paint an overwhelming picture of criminal activity in the world of global supply chains. Legal precedence will be cited in criminal case law involving supply chains. Examples will be given where, unbelievably, suppliers of a part were held legally responsible when the part caused property damage and personal injury. A counterfeit parts prevention programme guide will be provided as a work product takeaway that includes supplier assessment checklists along with ready-made policies for company supply chain employees, suppliers and distributors involved in your products. Another presentation on the key topic of risk comes from Gregory L. Schlegel, also from the United States. Schlegel is the founding member of The Supply Chain Risk Management Consortium and a popular previous speaker at the SAPICS Conference. His introductory session, entitled ‘Supply Chain Risk Management – what is it and why should we care?’ explores the basics of SCRM, talks about the financial impacts of an ever increasing amount of supply chain disruptions and discusses why it’s extremely important that executives in operations/supply chain management become aware of this new body of knowledge that can mitigate and manage uncertainty, complexity and risk across the entire global value chain. The international supply chain industry body to which SAPICS belongs, APICS in the US, has recently embraced Supply Chain Risk Management as a critical success factor of supply chain excellence and has developed a first-of-its-kind certification in SCRM. Schlegel’s talk will also profile the certificate and offer a Q&A on the new discipline of SCRM. For more information on the 36th Annual SAPICS Conference & Exhibition, being held at Sun City from 1 to 3 June 2014, please visit www.sapics.org.za