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Page 1: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

SCOR® Risk Management Team Update

SCRLC Meeting19 May 2010

Page 2: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

Agenda

• SCOR® Risk Management Overview• Proposed Updates for SCOR® 10.0• Other SCC Risk Management Activities

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Page 3: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

CustomersSuppliers(And outsourceManufacturing)

Suppliers’ Environment

Customers’ Environment

Organization

Organization’s Environment

Customer Facing

Supplier Facing

Internal Facing

Global Environment

Relationship RiskSupplier Performance Risk

Human Resource Risk Supply chain disruption risk Supplier Environment Risk

Market Dynamics RiskDisaster Risk

Political / Country RiskSupplier Financial Risk

Regulatory Risk

Financial Risk Distribution RiskRelationship Risk

Market RiskBrand / Reputation Risk

Product Liability RiskEnvironmental Risk

Political/ Country Risk

Operational RiskTechnical RiskFinancial Risk

Legal / Regulatory RiskEnvironmental Risk

HR / Health and Safety Risk

Political/ Country Risk

Ideally, supply chain risk management addresses the entire supply chain.

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Page 4: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

SCOR® views the supply chain as built up of five distinct management processes.

DeliverMakeSource

Plan

Return

Enable

Sup

plie

r pr

oces

ses

Product DesignDCOR™

Custom

er processes

Supply Chain SCOR ®

Sales & SupportCCOR™

Product Management

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Page 5: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

ER.9ED.9EM.9ES.9EP.9Manage Supply Chain Risk

ES.10Manage Supplier Agreements

ER.8ED.8EM.8ES.8EP.8Manage Process Regulatory Compliance

EP.10Manage Financial Plan Alignment

ER.7ED.7EM.7ES.7EP.7Manage Process Configuration

ER.6ED.6EM.6ES.6EP.6Manage Integrated SC Transportation

ER.5ED.5EM.5ES.5EP.5Manage SC Capital Assets

ER.4ED.4EM.4ES.4EP.4Manage Process SC Inventory

ER.3ED.3EM.3ES.3EP.3Manage Process Data Collection

ER.2ED.2EM.2ES.2EP.2Manage Performance of Process

ER.1ED.1EM.1ES.1EP.1Manage Business Rules

Plan Make Deliver ReturnSource

SCOR® 9.0 Enable Processes

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Page 6: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

What’s new for SCOR® 10.0?

• Updated Best Practices reflecting team research, member feedback, and industry recognized practices

• Metrics Revisions to better reflect the role of SCRM in supply chain strategy and execution

• New Risk Research to help SCC members understand risk identification, quantification, mitigation, and response techniques.

• Updated Best Practices reflecting team research, member feedback, and industry recognized practices

• Metrics Revisions to better reflect the role of SCRM in supply chain strategy and execution

• New Risk Research to help SCC members understand risk identification, quantification, mitigation, and response techniques.

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Page 7: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

SCOR® 10.0 will have 13 Risk Best Practices

• Supply Chain Risk Management (SCRM)• Supply Chain Risk Identification• Supply Chain Risk Monitoring• Supply Chain Risk Assessment• Mitigate Source Risks• Crisis Communications Planning• Risk Management Programs Coordination with Partners• Supply chain business rules configured to mitigate risk• Supply chain information configured to minimize• Supply chain network configured to mitigate risk• Bowtie Risk Management Approach• Risk Program Monitoring• Network Prioritization for Risk Identification

Updated

New

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Page 8: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

Proposed Metrics Changes for SCOR® 10.0

• Value at Risk (VAR) moved from Cost to Agility– Level 1 (KPI) metric– Include option for non-

monetary impacts– Include option for confidence

intervals• Risk Mitigation Costs

enhanced– New definition– Level 2 metric

Add this diagram: Level 1 Level 2 Level 3

AG1.4 Supply Chain Value At Risk (VAR)

AG2.1 Value at Risk (VAR $) (Plan)

AG2.4 Value at Risk (VAR $) (Deliver)

AG2.3 Value at Risk (VAR $) (Make)

AG2.5 Value at Risk (VAR $) (Return)

AG2.2 Value at Risk (VAR $) (Source)

Expert Opinion

Time to Restore

Time to Detect

Time to reach Point of No Return

Time Factor

Historical Event Data

Add this diagram: Level 1 Level 2 Level 3

AG1.4 Supply Chain Value At Risk (VAR)

AG2.1 Value at Risk (VAR $) (Plan)

AG2.4 Value at Risk (VAR $) (Deliver)

AG2.3 Value at Risk (VAR $) (Make)

AG2.5 Value at Risk (VAR $) (Return)

AG2.2 Value at Risk (VAR $) (Source)

Expert Opinion

Time to Restore

Time to Detect

Time to reach Point of No Return

Time Factor

Historical Event Data

Proposed SCOR® 10.0 VAR Hierarchy

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Page 9: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

Risk Management Team Continued Research

• Updated research into metrics and best practices

• Participation with Supply Chain Risk Leadership Council

• Coordination with MIT on risk survey

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Page 10: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

Other Research Activities

• In depth interviews with SCRM leaders• Expansion into the DCOR® Model

• Continued coordination with SCRLC (joint event?)

Sup

plie

r pr

oces

ses

Product DesignDCOR™

Custom

er processes

Supply Chain SCOR ®

Sales & SupportCCOR™

Product Management

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Page 11: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

Risk Management Special Industry Group

• The Risk Management SIG will be a member managed group dedicated to furthering the research and application of risk management.

• Call for members planned in mid-2010• Charter will be to lead SCC risk management activities

– DCOR and CCOR inclusion– Future SCOR improvements– Research efforts– Training – Member outreach

• Structure will follow other SCC SIGs– Convergence– Aerospace and Defense– Oil and Gas

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Page 12: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

One Day SCOR SCRM Workshop

• Supply Chain Risk Management (SCRM) Fundamentals– Introduction to each SCRM component and how each can support the firm's supply

chain management – Discussion of SCRM process and all components – Presentation of several example projects and discussion of component use for each

specific project

• The SCOR Model and Risk management– Background, components, strategies and implementation

• Participants who complete this works will be able to– Understand the purpose and goals of SCRM within the context of their firm and supply

network – Develop a basic SCRM strategy and plan for their organization – Understand and articulate the business value of a SCRM program

• Prerequisite - Attendees must be conversant in the basic SCOR model in order to attend this workshop. The SCOR Framework training includes the required basics

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Page 13: SCOR® Risk Management Team Update SCRLC Meeting 19 May 2010.

SCOR® Risk Management Team Update

Taylor Wilkerson

[email protected]+1-703-917-7438

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