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."

Unknown
IV III
Known
I I II
Knowns Unknowns
November 2010 3PL summit: Supply Chain Resilience 2
 Is your supply chain suffering from disruptions?

9/11

November 2010 3PL summit: Supply Chain Resilience 3

 Not all supply chain disruptions are the same

Supply chain disruptions are different in impact and predictability

High
Financial
9/11
crisis

SARS
Government
Impact

Volcano regulations
Eruptions

Piracy
attacks Port
Strike
Accidents

Low

Low High
Predictability

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 Supply chain disruptions have a direct impact on your company’s
financial performance

Impact Drivers
Company value:

 Free Cash Flow

 Economic Profit
 Return on Capital

The trends to extend supply chains and make them leaner have increased the
vulnerability of these supply chains to volatility in transportation
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 How can you make your supply chain more resilient to the
challenges in the transportation market?

Drivers

Predictability Network
Carrier Management Redesign
Selection

Transport Location
Management Strategy

Mode Disruption
Optimization Management Inventory
strategy

Collaborative
Carrier Risk
Route Solutions Management Sourcing
Optimization Strategy

“It is not the strongest of the species that survives, not the most intelligent, but
the one most responsive to change” (Charles Darwin).

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 Something to think about …

Peak oil: what are the consequences for your (extended) supply chains?

Global Oil Consumption versus discoveries Global Oil Production and Consumption
1960-2050 (projected)

Sources: Futurist.com
ASPO-Ireland, Newsletter,
August 2007; U.S. Energy
Information Administration,
World Petroleum
Consumption, 2008; and
Management Information
Services, Inc., 2008

$50 or $180 Per Barrel Of Oil ?!?!

Unknown
IV III
Known
I I II
Knowns Unknowns
November 2010 3PL summit: Supply Chain Resilience 7
 Thank You!

November 2010 3PL summit: Supply Chain Resilience 8