Professional Documents
Culture Documents
Agenda
1. What is a crisis in supply chain management? 2. Classifying different types of crises 3. Theory responding to a crisis 4. Practice Case study 1: Toyota 5. Practice Case study 2:
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
80% of managers say they are somewhat capable of mitigating key supply chain risks McKinsey survey 2006
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
1.
2.
3. 4.
5.
Supply Chain Mitigation Capability recovery capability warning capability
The more dense the supply chain, the more severe the disruption The more complex the supply chain, the more severe the disruption The more critical nodes there are, the more severe the disruption The more recovery capabilities, the less severe the disruption The bigger the capability to detect the problem, the less severe the disruption
A disruption in a supply chain that is dense, complex and with many critical nodes is less severe if there is a capability to quickly detect and disseminate information about the event and thus respond and correct in a proactive or reactive manner.
Source: Craighead, C., Blackhurst, J., Rungtusanatham, M., & Handfield, R. (2007).
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
Before Crisis
During Crisis
After Crisis
Analyse what went wrong Document the lessons learnt Formulate strategies based upon the findings
Source: infosys.com
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
Being the author of its on misfortunes JIT and kaizen philosophy have hidden flaws
Setting the ambitious goal to raise global market share to 15%, up from 11% in 2002
Collaboration with a bunch of unfamiliar suppliers (tier-two and tier-three supplier) who didnt have a deep understanding of Toyotas culture like CTS Corp.
Leading to: A fatal crash in which a californian highway patrol officer and three family members died, ensuing recall of 3.8 million cars, and the close of the companys first American factory in California.
2004 2007
2009
5,9%.
CAGR of revenues
2008-2012
$ -4.5bn
Operating profit
2012
-1.7%
CAGR of revenues
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
7.352mln units
Cars sold
Source: toyota-global.com, knowledge.reutes.com, economist.com
FrankfurtSchool.de
Again: crisis reveals shortages of SCM strategy focus should be: to diversify risks (need to manage external factors) and move closer to the customer (in order to get independence of financial risk and increase brand awareness)
aftermath
Oct. 2011
- 7.2%
shareprice
2012
- 8.8%
US car sales
2011
- 56%
net income
45%
Made in Japan
Source: economist.com, businessweek.com
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
2012
2011
No. 4
Worlds car-makers
2011
100 bn
costs of the quake
2012
$ 5.3bn
Recall costs
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
461,000
cars lost
Source: Kumar & Schmitz (2010), usatoday.com, businessweek.com
FrankfurtSchool.de
10
10
Supplier relationship
Insurance concept
incremental cost of using the local supplier is the premium paid for the reduced risk of SC disruption
Inventory
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
11
11
Bibliography
Managing Supply Chains in Times of Crisis Karolina Trofiniak, Marcin Mrugaa and Steffen Seidel, 21th May 2013
FrankfurtSchool.de
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