Managing Supply Chain Risk

Transcription

1 ManMohan S. Sodhi Christopher S. Tang Managing Supply Chain Risk ^J Springer

2 Contents Foreword Endorsements Acknowledgements ix xi xiii Part I Introduction Identifying, Assessing, Mitigating and Responding to Supply Chain Risk 1 Supply Chain Risk Management Introduction This Book The Supply Chain Management Context The Need for Supply Chain Risk Management Apprehension without Action Robust Strategies for Supply Chain Management Disciplinary Roots of Supply Chain Risk Management 10 2 Risk Identification Introduction A Conceptual View of Risk for Identification and Categorization A Butterfly Depiction of Supply Chain Risk Delays and Disruptions: "Normal" and "Abnormal" Risks Local-and-Global Drivers and Local-and-Global Consequences Risk Categorization Motivated by the Supply Chain Organization Supply Risks Process Risks Demand Risks Corporate-Level Risks Summary 32

3 xvi Contents 3 Risk Assessment Introduction What Risks to Assess How to Assess Risks Example of a Cross-Company Survey: What Risks and How to Assess Our Sample What Risks Were Assessed How We Assessed These Risks Discussion Summary 49 4 Mitigating Risks Introduction Risk Mitigation Strategies Building Reserves for Redundancy Tailoring Risk Management for any Given Company Conclusion 63 5 Response as a Mitigation Approach Introduction Examples of Disruptions and Their Impacts Dealing with Disruptions Time-Based Risk Management The 3-D Framework: Detect, Design, and Deploy Response Time and Impact Modeling Disruption Impact over Time Time-Based Risk Management in Practice Risk and Reward Considerations Conclusion 76 6 How do Global Manufacturing Companies Mitigate Supply Chain Risks Introduction Literature Review Motivation Methodology Samsung Electronics Conclusions 89 Part II Mitigation Approaches and Applications 7 Strategic Approaches for Mitigating Supply Chain Risks Introduction Robust Supply Chain Strategies Conclusion 107

4 Contents xvii 8 Tactical Approaches for Mitigating Supply Cham Risks: Financial and Operational Hedging Introduction Different Types of Financial Risks s Risks Associated with Input Material Costs Risks Associated with Labor Costs Ill Risks Associated with Foreign Currency Exchange Risks Associated with Supplier Defaults Financial Instruments for Managing Input Material Cost and Foreign Exchange Risks Financial Instruments for Reducing Supplier Default Risks Operational Planning for Managing Cost Risks and Supplier Default Risks Capability for In-Season Replenishment Flexibility for Switching Sourcing Locations Integrated Financial and Operational Hedging Conclusions Application Scenario Planning for Mitigating Supply Chain Restructuring Risk at a PVC Manufacturer Introduction One Company's Story: Restructuring A Post-Acquisition Supply Chain The Planning Spectrum Planning Processes and Optimization Use of Optimization for Strategic Supply-Chain Planning The Need for a Combined Process Scenarios and Scenario Planning Middle Ground Conclusion Application Mitigating Outsourcing-Related Risks Introduction Risk 1: Underestimating the Strategic Value of Procurement Risk 2: Underestimating the Strategic Value of Outsourcing Risk 3: Poor Understanding of Internal Capability and Cost Structure Risk 4: Outsourcing the Wrong Thing Risk 5: Underestimating the Importance of Incentive Alignment Risk 6: Outsourcing Operations without Considering the Supply Chain Risk 7: Outsourcing without the Right Contracts Risk 8: Not Being Prepared for Supply Disruptions 158 lo.loconclusion 159

5 xviii Contents 11 Application: Mitigating New Product Development Risks The Case of the Boeing 787 Dreamliner Introduction The 787 Dreamliner's Unconventional Supply Chain The Dreamliner's Supply Chain Risks What Boeing Did to Mitigate Risk What Might Boeing Have Done Differently to Mitigate Risk Conclusion Application: Managing Product Recalls the Case of Mattel, Inc Introduction Underlying Causes of Mattel's Product Recalls Mattel's Product Recall Management Process Challenges Pertaining to Product Recalls Opportunities Associated with Product Recalls Conclusion 191 Part III Review of Quantitative Models for Managing Supply Chain Risk 13 Risk Models for Supply Chain Management Introduction Supply Management Supply Network Design Supplier Relationships Supplier Selection Process Supplier Order Allocation Supply Contracts Robust Supply Management Strategies Demand Management Shifting Demand Across Time Shifting Demand Across Markets Shifting Demand Across Products Robust Demand Management Strategies Product Management Postponement Process Sequencing Robust Product Management Strategies Information Management Information Management Strategies for Managing Fashion Products Information Management Strategies for Managing Functional Products Robust Information Management Strategies Managerial Attitudes Conclusions 239

6 Contents xix 14 Modeling the Value of Flexibility : Introduction Supply-Cost Risk and the Value of Flexibility via Multiple Suppliers Supply-Commitment Risk: the Value of Flexibility via Flexible Supply Contracts Uniformly Distributed Market Shocks General Market Shocks Process risk: the Value of Flexibility via Flexible Manufacturing (Discrete) Uniformly Distributed Plant Capacity Normally Distributed Plant Capacity Demand Risk: the Value of Flexibility via Postponement Demand Risk: the Value of Flexibility via Responsive Pricing Conclusions Stochastic Programming for Supply Chain Planning Under Demand Uncertainty Introduction Motivation A Stochastic Program for Supply-Chain Planning A Stochastic Program for Asset Liability Management A Stochastic Program for Supply Chain Planning Comparison of SCP Model with the ALM Model Demand-Scenario Generation: An Example Risk Measures Consideration Modeling Choices Representation of Uncertainty Decision variables Time Periods and the Decision Horizon Objective function Constraints v Solution-Technique Choices Decomposition Aggregation Sampling Scenarios Conclusion 276 Part IV Perspectives and Topics for Future Research 16 Researchers' Perspectives on Supply-Chain Risk Research Introduction Growing Interest in Supply Chain Risk Motivation for This Study Methodology Step 1 Findings: Diversity in Scope and Research Tools Step 2 Findings: A Closer Look at the Definition Gap 292

7 xx Contents 16.7 Step 3 Findings: Three Gaps Addressing the Gaps Closing the Definition Gap Closing the Process Gap Closing the Methodology Gap Conclusion Conclusion and Future Research Introduction Identifying and Assessing Supply Chain Risk Mitigating and Responding to Supply Chain Risk The Nature of the Organization Managerial Impact Research Methods Final Thoughts 310 References 311