Supply Chain Risk And What About Ethics?

Report
Supply Chain Risk
And What About Ethics?
Lee Buddress, Ph.D., C.P.M.
Robert G. Gleason Professor and Director
Supply and Logistics Program
Portland State University
Supply Chain Risk
 Events
or actions that result in a
transaction or project differing from
budget or plan
 Events or actions that prevent delivery
to customers as promised
Order Winning Characteristics

Design
 Lead Time
 Cost
 Quality/Durability
 Service

What Risks Most Impact


Ability to Serve Customers
Profitability
Supply Management Objectives
 Continuity
of Supply
 Least Total Cost of Ownership
 Create Competitive Advantage
 Sustainable
 What
Risks Interfere With These
Objectives
Supply Chain Risks
 Big,
Expensive Risks with Low
Probability
 Medium Risks with Medium Probability
 Smaller Risks with High Probability
External Risks
Supply Chain Risk
Classification
 External
Risks
 Governmental
 Infrastructure
 Supplier
 Logistical
 Price
 Terrorism
 Natural
Disasters
 Accidents
External Risks: Governmental
 Export
Policies
 Intellectual Property Protection
 Protective Tariffs and Duties
 Regulatory Changes
 Taxes
 Currency Fluctuations
 Political Unrest
External Risks: Infrastructure
 Roads
 Railroads
 Ports
 River
 Sea
 Airports
 Congestion
 Domestic
Infrastructure
External Risks: Suppliers

Operational



Equipment
Facilities
Management
 Financial
 Cultural/Language
 Labor
 Scalability

Quality
 Lead Times
 Monopoly/Oligopoly
 Technology



Communication
Operational
Sustainability
 Social Responsibility
External Risks: Logistics
 Supplier
Selection
 Transportation Equipment
 On Time
 Freight Damage
 Leakage/Shrinkage
External Risks: Price
 Trends
 Volatility
External Risks
 Terrorism
 Physical
Harm
 Personnel
 Cyber Attacks/Hacking
 Natural
Disasters
 Earthquakes,
Tsunamis
 Weather Related

Lightening Strikes
 Accidents
Key External Risks
 Labor
Issues
 Quality
 Timing
 Supplier Selection Process
 Total
Cost Analysis
Things to Watch
 East
& Gulf Coast Longshore Contract
 West Coast Longshore Grain Contract
 Ongoing Row Over Refer Plug-ins
 Port
Subsidizes Shipping Firms
 Carriers Add $150 per Container
 UPS/Teamsters
Contract Negotiations
 New Panama Canal
 EU/ Airline Row Over Carbon Emissions
 Carrier Capacity Constraints
Internal Risks
Supply Chain Risk
Classification
 Internal
Risks
 Policies
 Resources
 Operational
Internal Risks: Policies

Outsourcing
 Low Bid
 Freight Terms
 Managing




Reverse Logistics
Excess Inventory
Repairs
Sustainability/Social
Responsibility

No Standardization



Equipment
Procedures
No Formal Strategies
 Not Having Policies
Internal Risks: Resources
 Labor
 Finances
 Equipment
 Technology
 Automation
 Communication
 Enterprise
Internal Risks: Operational
 Personnel
 Numbers,
 Demand
Expertise
Management
 Customer
 Supplier
 Forecasting
 Project
Management
 Specifications
Order Winning Characteristics

Design
 Lead Time
 Cost
 Quality/Durability
 Service

What Risks Most Impact


Ability to Serve Customers
Profitability
Risk Prevention/Remediation

Safety Stock
 Safety Lead Time
 Additional Suppliers
 Geographic
Dispersion
 Ts and Cs
 Business Continuity



Ours
Suppliers
Training

ISO 31000 2009
 Supply Chain
Mapping
 Forecasting
 Project
Management
 Review Supplier
Selection Process
 Supplier Visits
 Daily Diligence
Key Risk Management Activity
 How
Suppliers Are Chosen
 Supplier Visits
 Supplier Mapping
 Forecasting
 Daily Diligence
Risk and Ethics
Ethics
 More
than Gifts and Gratuities
 Cialdini’s
Influence
 Appearances
Unethical Sales Practices

Commercial Bribery
 False Shortages
 False Price Breaks
 Market Allocation
 False Delivery Promises
 Quotation vs. Invoice
 False Representation
 Counterfeit
 Back Door Selling
Unethical Purchasing
Practices

Shopping Bids
 Shopping Ideas
 Samples
 Favoritism
 Payment Terms
 Contract Quantities
 Conflict of Interest
International Ethics Issues


Cultural Issues
Reciprocity
Foreign Corrupt Practices Act
 Illegal
to Make Payments Influencing
Purchase Decisions
 Exempts “Processing Payments”
 Accounting Requirements
 Applies
to ALL Publicly Traded Companies
Risk and Ethics
 Risks
to the Organization
 Customer
Loss
 Reputation
 Personal
Risks
 Job
 Reputation
 Personal
Liability
Columbia River Bar
http://www.youtube.com/embed/ByGSMme
nPDM?rel=0
Questions, Comments,
Observations, Conclusions,
Arguments?

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