Supply Chain Risk & Vulnerabilities Analysis
Are you fighting today’s battles with yesterday’s thinking?
Today, companies face critical decisions regarding emerging supply chain issues, challenges, and strategies across a wide variety of industries. For most companies, the supply chain accounts for over 80% of the company’s assets and over 75% of its employees. Yet, most were built incrementally over many years, and in very different economic and business conditions.
Supply chain failure is the most common failure a company faces in a disaster, as well as in a company’s growth plans. Avoiding supply chain failure is key to competing successfully.
One Chief Supply Chain Officer put it succinctly and painfully:
“We spend $200 million in capital annually with an operating budget of over $2 billion. We have over 70% of the employees and 75% of the capital assets of the company, yet we do not have the tools or frameworks needed to address the new challenges we face. The old stuff really is not very helpful. We are working hard on the issues, but I am not confident we have the perspectives or insights we need. What could we save if 10% of our decisions were better and fit with each other into a cohesive long term strategy? It’s got to be worth millions!”
How Do Top Companies Approach Supply Chain Challenges?
Firestorm leaders have conducted a multiyear global assessment of how top performing companies are approaching their specific supply chain challenges and opportunities. Firestorm’s key findings to date have allowed development of unique frameworks and practical applications companies can leverage to improve their supply chain design and management practices while reducing risk. Together, these action plans enhance shareholder value and create corporate strategic advantage.
The Core Realizations Driving Firestorm’s Work
- Executives are generally approaching supply chain decisions, and investments with simple, dated, variable cost-based tools and thinking. Unfortunately, today’s emerging supply chain world is very different:
- Cost drivers are more varied, customer service requirements are much greater
- Sales demand is more uncertain
- Supply chain networks are subject to dramatically higher risks
- The operating complexity, customer demands, and global reach of many supply chains vastly exceed the ability of current frameworks to address key design decisions;
- As design and operating complexities continue to grow (and the trade-offs and impacts of decisions across and outside the supply chain become more difficult) the historic tools, principles, and decision frameworks increasingly give precisely wrong answers, or no answers at all;
- Companies need better insights, models and frameworks for managing more diverse risks, selecting long term partners and suppliers, leveraging outsourcing and third party offerings, making technology investment decisions, and developing the global supply chain management skills needed for the future;
- There is a compelling need to develop “next generation” supply chain strategies, tools and thinking.
We Empower Companies To:
- Identify opportunities to make breakthroughs in supply chain performance.
- Align supply chain structures and operations explicitly with business and market strategies.
- Analyze supply chain external and internal risks and critical vulnerabilities.
- Identify and prioritize suppliers’ threats, and generate a Preaction Index™ Rating for each.
- Evaluate business resiliency threats across the supply chain and provide actionable plans to optimize supply chain efficiency, metrics, and customer service performance.
- Drive return on investment and share holdervalue by increasing asset productivity and capital deployment.
The Firestorm Approach
Firestorm has developed practical insights, frameworks and approaches to help companies in a variety of industries address the new supply chain challenges they face. Firestorm has and continues to:
- Explore the current and emerging supply chain issues in targeted industries
- Develop concepts, tools, software and information companies need to build and manage effective supply chain strategies
- Define approaches for collaborating effectively with supply chain suppliers and partners in evolving an extended supply system.
Key Questions Supply Chain Leaders Ask:
- How can changing risks, conflicts, uncertainties and trade-offs be managed over time?
- How can agility and resilience be designed into the supply chain and at what cost?
- What risks and vulnerabilities do you face at each step in the supply chain?
- What are the major sources of risk at each step in the chain and are they predictable?
- How can you design your supply chain structure to minimize risks you cannot manage?
- What is the cycle time of each step in the supply chain and what are the drivers?
- What are the variations in lead time, what drives them and can they be managed?
- How fast can the supply chain respond to changes and at what costs?
- How can the conflicts, constraints and capacity limits of growth plans be managed?
- Can the supply base handle the growth demands and at what cost?
- How and where is complexity impacting the supply chain?
- What design alternatives can reduce the impact of complexity, its growth or both?