Executive Briefings

Supply Chain Digital Mapping with Risk Assessment

Back in 2013, Flextronics, a $30bn manufacturer and services organization, talked about its slant towards supply chain risk through constant improvement in supply chain visibility, agility and control. Flextronics defined visibility as "the ability of all members of a chain to see from one end of the pipeline to another" and control as "the ability to respond to disturbances in a timely manner with effective actions." - Gregory L. Schlegel CPIM, CSP, Jonah, Founder, The Supply Chain Risk Management Consortium, Executive in Residence and Adjunct Professor, Supply Chain Risk Management, Lehigh University

Supply Chain Digital Mapping with Risk Assessment

Caroline Dowling, Flextronics' president of Integrated Network Solutions said this: "Almost all supply chain organizations maintain a certain amount of visibility and control. However, successful organizations in the 21st Century need to be aware of where the vulnerabilities reside that create risk and how they can mitigate and manage those risks wherever possible."

Flextronics’ comprehensive approach to identifying, assessing, mitigating and managing risks within its global supply chain reinforces the thread our Risk Consortium has been saying for the last four years, which is, many firms have neglected to analyze their growing global supply chains and the discrete risks. Why? Basically because everyone’s supply chain has been lengthened, many have pruned their suppliers to reduce costs and many have secured new suppliers in very risky corners of the world. To mitigate these negative impacts and take a proactive approach to supply chain risk, the Risk Consortium continues to advocate digitally mapping the supply chain and superimposing risk across the new digital supply chain map.

Capturing the Data - Many new software solution companies are coming online with capabilities to capture all the pertinent data associated with a company’s supply chain from ERP and SCM systems. This capability expedites the process of initially mapping the nodes in the supply chain. The data is scrubbed and validated as these solution providers begin to produce the initial map of the global supply chain.

Geo-Coding of the Nodes - The Risk Consortium advocates the links and nodes approach. Links and nodes is a common approach when designing or modeling a supply chain network. Nodes are the entities within a supply chain, such as suppliers, distributors, customers, other channel members and the company’s facilities as well. All locations in the supply chain map are geo-coded specifying where the nodes are located around the globe. The “where-located” is the key to beginning a comprehensive journey towards supply chain risk management.

Connecting the Nodes - Don’t forget the demand chain. You must include the geographic location information of all nodes. Supplier corporate locations are different than shipping locations. Links between the nodes represent flows and are depicted by solid or dotted lines. The flows are indicative of revenue, profit, costs and volume information.

Superimposing Risk Across the Network - And when completed, we advocate superimposing risk assessments across all the nodes and links culminating in a new “Network Heat Map” displaying Red, Yellow and Green risk profiles, node to node, across the entire network.

The Outlook

In 2016, look for still more companies providing supply chain geo-coded network mapping with risk assessments utilizing techniques such as Time-to-Recover, Value-at-Risk and Risk Priority Numbering. Supply Chain Mapping is the first of four stages of our new 21st Century Supply Chain Maturity/Risk Model - “Visibility, Predictability, Resiliency and Sustainability.”

Caroline Dowling, Flextronics' president of Integrated Network Solutions said this: "Almost all supply chain organizations maintain a certain amount of visibility and control. However, successful organizations in the 21st Century need to be aware of where the vulnerabilities reside that create risk and how they can mitigate and manage those risks wherever possible."

Flextronics’ comprehensive approach to identifying, assessing, mitigating and managing risks within its global supply chain reinforces the thread our Risk Consortium has been saying for the last four years, which is, many firms have neglected to analyze their growing global supply chains and the discrete risks. Why? Basically because everyone’s supply chain has been lengthened, many have pruned their suppliers to reduce costs and many have secured new suppliers in very risky corners of the world. To mitigate these negative impacts and take a proactive approach to supply chain risk, the Risk Consortium continues to advocate digitally mapping the supply chain and superimposing risk across the new digital supply chain map.

Capturing the Data - Many new software solution companies are coming online with capabilities to capture all the pertinent data associated with a company’s supply chain from ERP and SCM systems. This capability expedites the process of initially mapping the nodes in the supply chain. The data is scrubbed and validated as these solution providers begin to produce the initial map of the global supply chain.

Geo-Coding of the Nodes - The Risk Consortium advocates the links and nodes approach. Links and nodes is a common approach when designing or modeling a supply chain network. Nodes are the entities within a supply chain, such as suppliers, distributors, customers, other channel members and the company’s facilities as well. All locations in the supply chain map are geo-coded specifying where the nodes are located around the globe. The “where-located” is the key to beginning a comprehensive journey towards supply chain risk management.

Connecting the Nodes - Don’t forget the demand chain. You must include the geographic location information of all nodes. Supplier corporate locations are different than shipping locations. Links between the nodes represent flows and are depicted by solid or dotted lines. The flows are indicative of revenue, profit, costs and volume information.

Superimposing Risk Across the Network - And when completed, we advocate superimposing risk assessments across all the nodes and links culminating in a new “Network Heat Map” displaying Red, Yellow and Green risk profiles, node to node, across the entire network.

The Outlook

In 2016, look for still more companies providing supply chain geo-coded network mapping with risk assessments utilizing techniques such as Time-to-Recover, Value-at-Risk and Risk Priority Numbering. Supply Chain Mapping is the first of four stages of our new 21st Century Supply Chain Maturity/Risk Model - “Visibility, Predictability, Resiliency and Sustainability.”

Supply Chain Digital Mapping with Risk Assessment