Achieving Supply Chain Resilience
Managing the Known Unknowns
24 November 2010
Donald Rumsfeld, US Secretary of Defense
US Department of Defense news briefing, February 12th, 2002.
"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know."
November 2010 3PL summit: Supply Chain Resilience 2
IV III
II I Known
Unknown
Knowns Unknowns
I
November 2010 3PL summit: Supply Chain Resilience 3
Is your supply chain suffering from disruptions?
9/11
November 2010 3PL summit: Supply Chain Resilience 4
Not all supply chain disruptions are the same
Imp
act
Predictability Low High
Low
High
Volcano
Eruptions
Financial
crisis
Port
Strike
Piracy
attacks
Supply chain disruptions are different in impact and predictability
Government
regulations
SARS
9/11
Accidents
November 2010 3PL summit: Supply Chain Resilience 5
Supply chain disruptions have a direct impact on your company’s
financial performance
Free Cash Flow
Economic Profit
Return on Capital
Company value:
Impact Drivers
The trends to extend supply chains and make them leaner have increased the
vulnerability of these supply chains to volatility in transportation
How can you make your supply chain more resilient to the
challenges in the transportation market?
November 2010 3PL summit: Supply Chain Resilience 6
“It is not the strongest of the species that survives, not the most intelligent, but
the one most responsive to change” (Charles Darwin).
Carrier
Selection
Network
Redesign
Transport
Management
Sourcing
Strategy
Location
Strategy
Route
Optimization
Mode
Optimization
Predictability
Management
Collaborative
Carrier
Solutions
Inventory
strategy
Risk
Management
Drivers
Disruption
Management
Something to think about …
November 2010 3PL summit: Supply Chain Resilience 7
Peak oil: what are the consequences for your (extended) supply chains?
Sources: Futurist.com
ASPO-Ireland, Newsletter,
August 2007; U.S. Energy
Information Administration,
World Petroleum
Consumption, 2008; and
Management Information
Services, Inc., 2008
Global Oil Production and Consumption
1960-2050 (projected)
Global Oil Consumption versus discoveries
$50 or $180 Per Barrel Of Oil ?!?!
IV III
II I Known
Unknown
Knowns Unknowns
I
Thank You!
November 2010 3PL summit: Supply Chain Resilience 8 8