Supply chain risk management

from Wikipedia, the free encyclopedia
The subject of supply chain risk management is risks in complex and dynamic supplier and customer networks. (see Wieland / Wallenburg, 2011)

The term supply chain risk management (SCRM; English supply chain risk management ) names in the context of the supply chain management, the implementation of strategies for the management of both everyday and exception risks along the supply chain on the basis of a continuous risk assessment with the Objective to reduce vulnerability and ensure continuity. Supply chain risk management is typically divided into the phases of identification, assessment, control and monitoring.

Phases

identification

This identification phase of supply chain risk management refers to the identification of the causes of disruptions along the supply chain; Both everyday and exceptional risks should be identified along the supply chain . Risk objects are i. d. R. Suppliers , states and individual locations . In special cases, the means of transport (e.g. ships) are also monitored as additional risk objects ( transport risk ).

rating

The evaluation phase of supply chain risk management refers to the evaluation of the probability of occurrence and the extent of damage of a risk; However, these values ​​should not simply be multiplied with one another, since countermeasures must be completely different for everyday risks and exceptional risks.

control

The actual risk management takes place in the control phase of supply chain risk management. The control of exceptional risks is often done by insurance, the control of everyday risks can be done through changed processes, additional suppliers or a higher inventory.

monitoring

Many risks can only be managed if changes become apparent over time; the monitoring phase of the supply chain risk management is therefore particularly important.

Risks

Exogenous risks

Exogenous risks deal with the problems that take place outside of a system. If problems and risks arise outside the system, they take place outside the company and are therefore usually beyond the control of the company.

These exogenous risks primarily include legal risks. For example, if materials are delivered from another country, the legal basis of the respective country applies to this process. In the event of a legal dispute, the respective national regulations must be taken into account, which can affect the entire supply chain of a business. Import and export controls can also have negative effects due to new customs requirements. The quality of the product can suffer as a necessary component with particularly good quality is no longer so easy and can be obtained within the framework of the costs. Particular attention is paid here to the so-called “moral standards”. This means the arguments that we take for granted, such as child labor, minimum wages, social justice or health and environmental protection. While these moral standards are enshrined in law in our country, they do not apply in some other countries.

Nature and the environment also pose a further risk. These include, in particular, hurricanes, terrorism, earthquakes, tsunamis and epidemics. Occurring disruptions affect the whole company and especially the share prices and the possible profit analysis. Examples of this have often been observed recently. Supply chains are becoming increasingly vulnerable. And here, too, the product quality could suffer from the non-existent or destroyed raw materials.

External market risk is also one of the exogenous risks. If the economic situation of a country worsens, this could now have a negative effect on the purchasing behavior of customers, even if the company is doing well. Due to a crisis in the country z. B. supplier companies have difficulties, which affects their own production in the respective country or can even stop. This can not only lead to high losses in the entire supply chain, it can result in entire order losses.

Endogenous Risks

A high level of complexity in a supply chain, such as many different suppliers or a global composition, pose a serious risk. As a result, it can quickly become opaque. A large number of sub-suppliers can be causes of logistical difficulties and lead to time delays. For example, climatic fluctuations or possible vibrations during transport can endanger the quality of components. And this possible reduction in the quality of individual components in turn has a negative effect on the quality of the products.

The higher the proportion of manual production steps in the supply chain, the greater the risk of errors.

If components from single source suppliers flow into the production, the resulting dependency poses a risk. Failures, malfunctions and inadequate quality cannot easily be intercepted by other suppliers. In addition, the increasing specialization of companies is increasingly limiting the choice of alternatives.

The financial risks include the financial soundness of suppliers. Insolvency or a possible bankruptcy of a supplier can make it necessary to develop a new production process under enormous time pressure, which affects the quality.

If the supplier cannot guarantee that the quantity is accurate, it may be necessary to use less qualitative components. In the event of disruptions, large companies can claim back the financial damage, while smaller suppliers may not be able to cover them.

Another important point are the "critical events". In the context mentioned here, these include:

  • Changes in the company organization (change of owner or manager).
  • Change of supplier, and here in particular new suppliers whose reliability cannot yet be assessed, or to suppliers with little experience and qualifications.
  • The manufacture of new products and the introduction of new processes; Difficulties are often only recognized in the process.
  • If there are strong fluctuations in volume and demand, the availability of components cannot be sufficiently guaranteed.
  • A noticeably high staff turnover indicates internal difficulties. Information and know-how are lost when staff changes frequently. In the case of insufficient qualifications, this can have a direct impact on the quality, but it can also lead to agreement errors.

The importance of individual components for the end product is decisive for the risk assessment. This assessment can be determined, among other things, by means of an ABC risk assessment. Components that affect the safety of the product must not have any qualitative defects. The quality should be demonstrably ensured here. Components that can lead to functional failures are also a particular focus.

Individual components have different effects on production in the event of disruptions. The stronger these effects are, the more important the component is to be classified. The risk of downtime in production should be kept as low as possible.

Minimizing risk

In order to keep the risks of the supply chain and thus the effects on product quality as low as possible, various preventive measures can be taken. For a successful quality and risk management, suppliers and manufacturers should work closely together. Suppliers should already be involved in product development. This is the only way to successfully minimize risks and ensure and increase quality in the long term.

Transparency, trust and reliability of both contractual partners contribute to minimizing risk. Test plans and acceptance criteria, for example based on specific checklists, create clear benchmarks for the quality requirements. Traceability should be ensured. Framework agreements limit the risks for manufacturers and suppliers. Processes should be structured precisely so that there are no inconsistencies. If defects in individual components can no longer be detected in the subsequent process, quality checks must be carried out in advance. Regular audits also enable quality assurance in ongoing production.

Supplier management

Well-organized supplier management plays a key role in minimizing risk. Experience and qualifications, as well as the equipment for individual components, represent a decisive criterion for the classification as a competent project partner in order to guarantee impeccable quality. Certificates and evidence of the quality level can be requested. Experience from previous cooperation and possibly customer reviews flow into the overall assessment. In particular, adherence to deadlines, adherence to quantities, flexibility and a high quality standard with a suitable price-performance ratio are decisive criteria. In addition, there are logistical factors relating to the supplier's location and transport options for uncomplicated process integration. The cooperation behavior in the event of complaints and response times should be taken into account. The payment options can also be decisive. In order to successfully minimize risk, supplier management should also be extended to include sub-suppliers. Certifications can be helpful here.

development

A number of extensive studies and surveys can be used to predict future trends in the handling of risk management in relation to the supply chain. New problems could also be identified. An increase in risk occurs due to the increasingly complex supply chains. This is particularly due to the accumulated outsourcing. The increase in suppliers from many different countries ( globalization ) also makes simple and direct contact between the supplier and the manufacturing company more difficult. Another problem is the difference in the skill level of employees in the lower activity areas of the supply chain. These problems can also affect the quality of a product.

The increasing use of outsourcing , cooperation and single sourcing could thus be described as future trends.

Almost 40% of companies complain about the poor quality of components from their suppliers. This is mainly due to the weaknesses in the management of the huge supplier network. The requirements have also changed; suppliers must be informed by the company of the changes required in parallel, quickly and precisely. In conclusion, it can be said that the supply chain is closely related to the quality of a product.

References

See also

literature

  • M. Schröder (2019): Structured improvement of the supply chain risk management, Springer Gabler Verlag, Wiesbaden: ISBN 978-3-658-26772-8
  • Andreas Norrman, Ulf Jansson: Ericsson's proactive supply chain risk management approach after a serious sub-supplier accident. (Eng.) In: International Journal of Physical Distribution & Logistics Management , 2004, Vol. 34, No. 5, ISSN  0960-0035 , pp. 434-456.
  • MQ - Management and Quality / The magazine for integrated management systems, edition Germany, organ of TÜV Cert, TÜV Media, Cologne, ISSN 1862-2623.
  • Procurement, Part III B in: Tilo Pfeifer, Robert Schmitt (editor) Masing Handbook Quality Management, Carl Hanser Fachbuchverlag Munich Vienna, 6th revised edition (2014), ISBN 978-3-446-43431-8
  • M. Essig, E. Hofmann, W. Stölzle (2013): Supply Chain Management. ISBN 3800634783
  • R. Vahrenkamp (2007): Risk management in supply chains: averting dangers, seizing opportunities, generating success, Erich Schmidt Verlag GmbH, ISBN 9783503100415

Web links

supporting documents

  1. ↑ a b c d e f cf. Andreas Wieland, Carl Marcus Wallenburg: Supply chain management in stormy times. University Press of the TU, Berlin 2011, ISBN 978-3-7983-2304-9 .
  2. ↑ Andreas Wieland / Carl Marcus Wallenburg, Dealing with supply chain risks: Linking risk management practices and strategies to performance , in: International Journal of Physical Distribution & Logistics Management, 2012, 42 (10): in the English original: "the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity "
  3. ↑ logistics today. Retrieved December 26, 2016 .
  4. ↑ risk methods. Retrieved December 27, 2016 .
  5. ^ Study by PwC. Accessed December 30, 2016 (German).
  6. ^ Study by PwC. Accessed December 30, 2016 (German).
  7. ^ Study by PwC. Accessed December 30, 2016 (German).
  8. ↑ Supply chain: How to reduce risks. Retrieved December 30, 2016 .
  9. ^ Study by PwC. Accessed December 30, 2016 (German).
  10. ↑ logistics today. Retrieved December 27, 2016 .
  11. ↑ Globalization Risk of the long supply chain. Retrieved December 26, 2016 .