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Single Point of Failure. The 10 Essential Laws of Supply Chain Risk Management

  • ID: 2209297
  • Book
  • November 2009
  • 320 Pages
  • John Wiley and Sons Ltd
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It is mind–boggling to consider what it takes to produce the products we depend on critical drugs like blood thinners, plastic–based products such as syringes, isotopes for medical imaging, and milk–based baby formula. Or maybe your livelihood depends on your ability to transport products, on your customers having access to your online order entry system, or on the timely receipt of parts from your suppliers on the other side of the world. The occurrence of a single point of failure whether a product contamination, labor strike, trade credit crunch, an earthquake, or a health crisis can interrupt the flow of goods and cause total systemic failure.

Written by internationally recognized industry veteran Gary Lynch, Single Point of Failure: The Ten Essential Laws of Supply Chain Risk Management reveals just that the ten vital laws to successfully identifying, measuring, mitigating, and financing risk, with guidance for establishing your organization′s supply risk management program, avoiding bad decisions, and gathering better information and data to make good decisions.

Here, you′ll discover:

  • How to establish your organization′s supply risk management program
  • Why no risk strategy is a solution for bad decisions
  • What causes supply chain risk management demand to trump supply
  • The sourcing strategies that create more risk, not less
  • Why managing the parts does not equal managing the whole
  • What the best policy is for knowing what′s in your policy

Believing that all is well is a self–deception. You need to continually analyze and evaluate the risks to your supply chains and business networks, determine and learn the root cause of problems, and decide whether you have the proper philosophy, culture, and systems in place to identify, measure, mitigate, and finance risk. Addressing risk from several points of view, Single Point of Failure authoritatively guides you in how to remain agile to avoid risk, be resilient to respond, adapt and absorb risk, develop methodologies that are sustainable to scale, and maintain risk solutions.

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About the Author xi

Preface xiii

Acknowledgments xvii

Introduction Getting to the Truth 1

Chapter 1 The Laws of the Laws 9

Laws of the Laws

Risk Management Defined

Law of the Laws #1: Everyone, without Exception, Is Part of a Supply Chain

Law of the Laws #2: No Risk Strategy Is a Substitute for Bad Decisions and a Lack of Risk Consciousness

Law of the Laws #3: It s All in the Details

Law of the Laws #4: People Always Operate from Self–Interest

Indirect and Secondary Impacts

What Can You Conclude?


Chapter 2 Law #1: If You Don t Manage and Lead Change, You Have to Surrender to It 31

The Risk Wake – Up Call Planned Change, Unplanned Consequences

We Can t Change the Past, but . . . Can We Change the Future?

Can You See the Icebergs Ahead?

Chapter 3 Law #2: The Paradigm Should Destroy the Parasite: Begin by Defining the Paradigm, Not by Fighting the Parasite 61

The Paradigm in Action

Why Does the Organization Need to Identify a Supply Chain Risk Paradigm?

Beware! The Paradigm Can Shift without Notice

If the Shoe Fits


Chapter 4 Law #3: Manage Your Business DNA in a Petri Dish of Evolving Risk 87

Expanding the Risk Awareness Universe

Know Your Business Know Your Surroundings

The Keys to Your Risk Kingdom

Your Operation s Complete Footprint

Your Action Plan


Chapter 5 Law #4: In Supply Chain Risk Management, Demand Trumps Supply 115

Everyone s Customer

Building Your Demand–Based Strategy

Market and Client Factors to Consider


Chapter 6 Law #5: Never Set Up Your Suppliers for Failure 143

Supply Chain Risk Management Program

Sourcing Strategies That Create More Risk, Not Less

Trust but Verify


Chapter 7 Law #6: Managing Production Risk Is a Dirty Job: Focus on Managing the Endless Risk of Manufactured Weakest Links 173

Going Global with the Production of Risk

A New Collaborative Effort

Why Is Production So Critical?

Part Two of the Double Whammy: Labor


Chapter 8 Law #7: The Logistics Risk Management Rule: Managing the Parts Does Not Equal Managing
the Whole 199

What Is Logistics Risk?

Cargo and Warehouse Theft

The Piracy Risk

What s at Risk?

Single Points of Failure and Aggregate Risk

Supply Chains Don t Survive on Product Flows Alone; Information Flows Are Essential

In the End It s All about the Priorities and Economics


Chapter 9 Law #8: Mitigation: If Supply Chain Risk Management Isn t Part of the Solution, It Will Become the Problem 225

Now What Do I Do?

Enter the Risk Intelligent Supply Chain

Economic Change A Catalyst for Redefining

Resiliency Management


At Time of Disruption


What Is Risk Mitigation?


Chapter 10 Law #9: Financing: The Best Policy Is Knowing What s in Your Policy 249

Insurance and Its Role in Supply Chain

Risk Management

Background on Insurance in the Supply Chain Risk Area

Current Insurance Solutions and Their Limitations

Introducing Supply Chain Insurance: Approach and Challenges

Corporate Customer Benefits Arising from Supply Chain Insurance


What Does the Future Hold?

A View from the Insurer s Side


Chapter 11 Law #10: Manage the Risk as You Manage Your Own: Your Supply Chains Are All
Interdependent but Unique 279

Questioning Old Assumptions

Personal Laws of the Laws

Index 287

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Gary S. Lynch
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