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Think Link


Strategic Sourcing & Risk Management

Program Leader: Lew Roberts

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By: Rahul Chauhan

Sr.Engineer VDD (R&D)


About ThinkLink SCS

is an India based firm.

ThinkLink Supply Chain Services (ThinkLink) They offer Turnkey Project Management,

Advisory, Systems Implementation, and Talent development services to their clients.


have expertise across Distribution Centres, Warehouses, Logistics Parks, Cold Chain, ICDs, Food Processing Zones, Distribution Channels, and Transport projects.

Program Leader Lew Roberts

Lew is President and founder of L. Roberts

& Associated Inc., which is a USA based firm that provides a wide range of professional Consulting & Management Development Services aimed at improving Business Performance, with an emphasis in the field of Supply Chain Management. Career over the past 20 years has included working with Ryder, UPS, Menlo, Exel, Owens Corning, Coca Cola, Georgia Pacific, SAPPI, Baxter, De Beers, Mercedes Benz, Nissan and many other 4/15/12 major firms

His consulting & Management Development

Global Supply Management & International Business


Important issues to consider:

sourcing is given for companies engaging in global marketing strategies. cooperation and coordination is required between production, marketing, purchasing and the logistics management group.

To gain a competitive advantage, global

The longer the supply chain, the more


Global Competitive Strategy

should consider adopting worldwide strategies. integrated

To effectively serve global markets, firms

These firms are more likely to search for

global sourcing for materials and components, depots, assembly, distribution centers, and logistics. strategies around technology, marketing, manufacturing, and logistics.

Global firms typically design synchronous

Customer Service Strategies for Global Markets: Four Characteristics standardized yet 1. Marketing becomes


2. Product life cycles shorten, sometimes to

less than one year.

3. Outsourcing and offshore manufacturing

are becoming more prevalent.

4. Marketing

and manufacturing activities and strategies tend to converge and be better coordinated in firms operating globally.

Critical Factors and Key Trends: Changes in Logistics & Transportation Ocean Liner Deregulation of the U.S.


Intermodalism Shipment Control Free Trade Agreements


Strategic Channel Intermediaries

Foreign Freight Forwarders Non-Vessel-Operating Common Carriers Export Management Companies Export Trading Companies Customs House Brokers Ship Brokers Ship Agents Export Packers Ports

Global SCM: Key Areas of Greatest Need


the Geographic Supply Chain Activities.



Transformation or Redesign of Best or

Proven Practices to Global Supply Chain Setting.

Leverage Global Supply Chain Strategies to

Significantly Strategies.





Key Challenges
supply chain management & sourcing is a given for companies engaging in global marketing strategies. cooperation and coordination is required between the various groups in the supply chain.

To gain a competitive advantage, global

The longer the supply chain, the more


Global Sourcing


Global Sourcing Overview

the end of World War II, many different events and forces have relaxed barriers to world trade. have created major opportunities for the global economy.

Supply is becoming global. Since

Geopolitical events of the past decade,

Changes to the global political landscape

are continuing at a rapid pace.


The Importance of Global Supply


supply managers, globalization represents the opportunity to deliver improved value to end customers. competitive necessity.

Global supply for many companies is a


Reasons for Sourcing Globally

Unavailability of Items Domestically Price Government Pressures Quality Faster Delivery and Continuity of Supply Better Technical Service Technology Marketing Tool Tie-in with Offshore Subsidiaries 4/15/12

Global Sourcing Success Factors

Defined global sourcing process Centrally-coordinated/centrally-led decision


Site-based control of operational sourcing



improvement processes information sharing with suppliers


Real time communication tools Availability of critical resources, including

human resources
Sourcing & contracting systems

Understanding Global Risk


Understanding Global Risk

initiatives do so mainly to reduce overall cost. costs of goods and/or services with lower costs arising from lower labor costs, lower costs of capital equipment and lower cost of material by outsourcing to foreign countries. working with companies in developing markets entails risk and firms that do not factor in these risks and 4/15/12 develop strategies to assess, mitigate and

Companies participating in global sourcing

Significant savings can be made in the


Costs of additional inventory levels, potentially

substandard products, increased transportation and transaction costs, etc., can potentially outweigh the savings achieved. and have been engaged in global sourcing, that they need to understand the sources of risk and develop appropriate risk mitigation strategies in order to position them for success.

It is a major lesson learned by firms, who are


Managing Supply Risk

Chain Risk Management is a structured process throughout the supply chain, which seeks to optimize the totality of strategy, processes, human resources, technology and knowledge. supply chain risk in order to safeguard continuity and maximize profitability.


The aim is to evaluate control and monitor


Categories of Global Risk

Changing geo-political climates Secure supply chains Currency fluctuations Local and regional economics Logistics infrastructure Language & cultural differences Legal Issues Documentation requirements & customs

Quality & Traceability

Identifying, Preventing & Managing Global Risk


Identifying, Preventing & Managing Global Risk


which embark on global sourcing efforts need to ensure that they have the necessary risk management processes and procedures in place which will help them to effectively identify various potential risk elements, prevent these risk from occurring and manage and mitigate risks when they do occur. of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of risk on 4/15/12 an organizations capital and earnings.

Enterprise risk management is the process

Approaches & Best Practices for Managing & Preventing Risk Probability and severity mapping

Risk contingency planning Commodity and currency hedging Rigorous supplier evaluation and selection

Supplier development International purchasing offices Total cost perspective Qualified backup sources Possession of tooling

Risk Contingency Planning

the development of a management plan that identifies alternative strategies to be used to ensure success if specified risk events occur. importance to businesses that use global supply sources.

Contingency planning can be defined as

Effective contingency planning is of critical