SCOR® Risk Management Team Update
SCRLC Meeting19 May 2010
Agenda
• SCOR® Risk Management Overview• Proposed Updates for SCOR® 10.0• Other SCC Risk Management Activities
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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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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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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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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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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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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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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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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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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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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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