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Global SupplyChain Risk
Management
Prepared by;
Mohamed El Hariry
Mohamed Osman
Kareem Sherif
Ehab Hosny
Bassem Magdy
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Global Supply Chain
GSC is a worldwide network
GSC focuses on:
The efficiency and effectiveness
Information and financial flows
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Goals of GSCM:
Cost containment
Enhance the operation
Sharing risks
Customer value
Sustaining competition
Profit
Global Supply Chain Importance
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Challenges and Risks
Risksthat are related to inbound and outbound logistics
organizations material, information, and financial are:
Exchange rate fluctuation
Tariff or duty rates
Regulatory compliance
Political conditions
Terrorism
Natural disasters
Availability of quality labor or labor union strike
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Global Supply Chain Disruption Impact
Firms can no longer guarantee the past achievementsbecause of impacts disruptive events that affects supply
chain infrastructure.
1. Increase costs and budget2. Threaten production and distribution
3. Shrink market share4. Decrease revenue5. Tarnish credibility with investors and other stakeholders6. Skyrocket the cost of capital
7. Attack badly the assets, suppliers, Customers, Transportation
providers, Communication lines, And other elements in their eco-system.
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EnvironmentRisk
Sources
OrganizationRisk
Sources
NetworkRelated
RiskSources
Sources of Risk
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43%
36%
33%
29%
23%
22%
21%
15%
11%10%
10%
4%
Sources of Risks Importance-Mckinsey Quarterly research(2006)
Cost and Quality of labor
Regulatory Concerns
Suppliers reliability
Price fluctuations
Exchange rate
intellectual Property theft
Product obsolescence
political concerns
Supply chaininfrastructure
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Global Supply Chain Risk Management
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Risk Management key Component
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Variables that can Affect SCRM
1) Information sharing,
2) Agility in the supply chain,
3) trust among supply chain partners,
4) Collaborative relationships among supply chain partners,
5) Information security,6) Corporate social responsibility,
7) Aligning incentives and revenue sharing policies in a supply chain,
8) Strategic risk planning,
9) Risk sharing in a supply chain,
10) Knowledge about risks in a supply chain, and\11) Continual risk analysis and assessment.
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EABL Case Study -1
New big competitor entry
Facing a declining economy andintense consumer price sensitivity
Illegally brewed beers sold inunhygienic packages
Owning their whole distributionchannel and logistics facilities.
Assertive Employer, exertingauthority over employees.
Horizontal integration with theircomplementary industries andowning subsidiaries in the regionsuch as; Central Glass IndustriesLimited, International DistillersUganda Limited, East, EABL TanzaniaLimited and African , Malting(Uganda), Salopia Limited, Allsopps(EA) Sales Limited, East AfricanBreweries (Mauritius) limited, EastAfrican Breweries (Kenya) Limited.
Skillful multiple source of power
Diversifications of 9-Brands.
Big coverage of the highlyfragmented Tanzanian market,both rural and urban.
Heavily investment capabilitiesfor the improvement of itsfacilities.
Strengths Opportunities
ThreatsWeaknesses
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EABL Case Study -2
EABL adroitly replaced its legitimate authority as anemployer with a myriad of ways to gain leverage as a suppliergoing to market through Independent distributors.
Usage of multiple sources of power, not to control thedistribution network but to generate results.
Diversification of outsourcing and contracting of non-core
activities i.e. distribution channel and fleet activities and soldoff non-core assets.
Alternatives
EABL achieved nearly 98 percent coverage of the highly
fragmented Tanzanian market, both rural and urban. At the same time, the company retained firm control of its
brands images.
Blocked SABs efforts to gain distribution and brand equity.Benefits
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Why Go GlobalAlliance?
To extendits globalreach
Cope with theexpensiveprocess of
Globalization
ShareRisks
Have anadvantageover rivals
Form theEconomics
of Scale
Use partnerscompetencies
Localize thedistinct skills
from thepartners.
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Lenovo Motives:
Go Global.
Access to US market.
Diversified customerbase
IBM expertise in sales
and marketing
IBM Motives:
open new market
presence in the worlds
fastest growing IT
market
Global Alliance
IBM:
the largestbrands in the
US market.
LENOVO:
leading ITcompany in
China
Lenovo & IBM Case Study-2
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In year 2007 due toLenovos restructuresprocess and cutting
costs
Source: Thomson DataStream, cited in Lex, 2007
Challenges management
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Thanks For Listening