Effective Management of Supply Chain Risk Training Course (ONLINE EVENT: February 11-12, 2025)- Product Image

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Effective Management of Supply Chain Risk Training Course (ONLINE EVENT: February 11-12, 2025)

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Training
2 Days
Feb 11th 09:30 - Feb 12th 17:00 GMT
Falconbury Ltd
ID: 6014146

€249EUR$260USD£200GBP OFF until Jan 07^th 2025

“A supply chain is only as strong as its weakest link.”

With increased outsourcing and globalisation, the risk to businesses of relying on external suppliers is greater than ever. This course will enable delegates to understand that through effective collaboration with their suppliers, those suppliers can add value and be part of any risk management solution, and integral in creating new opportunities for future success through innovation and efficiencies.

This supply chain risks management course will guide delegates through the process of maximising the benefits of outsourcing to specialist / expert suppliers who are able to achieve optimum outcomes and ensuring the impact of potential risks is kept to a minimum.

Suppliers are not exempt from risks, either coming from external or internal factors. This is why it is critical to work with your suppliers, to support them, collaborate with them, view them as strategic partners, to assist them to effectively mitigate, minimise or manage any supply chain risks which arise.

It’s crucial to identify all potential risks, some of which are created by the buyer due to poor communication with suppliers, others due to external factors affecting all suppliers, and some may be self-made by a supplier. Once a risk has been identified and the buyer is made aware of a potential risk, the contracting parties can then work together to determine the best strategy for mitigating / eliminating that potential risk or minimising the criticality and the impact on the buyers’ business.

This course will give delegates the framework to undertake thorough due diligence to gather that information, either from independent sources or through their tendering process, or their contract express terms. It will provide structure on how to process that information to determine the best approach to adopt taking into consideration their attitude to risk and their overall strategy, and their ‘bigger picture’ objectives in respect of their suppliers.

The expert trainer will provide procedures and best practise evaluation and planning tools to help you either avoid potential risks or minimise the impact when risks do materialise. Learn how to create a culture of pro-active risk management and understand lessons learnt within your own organisation and in your relationship with suppliers.

This course provides insight into the options available from legal recourse to practical remedies. It emphasises the importance of good supplier relationships due to the interdependent nature of the relationship between a buyer and a supplier, and the longer-term perspective. It is in no one’s benefit if a risk materialises for the result to be litigation, where neither party truly wins.

Specifically designed for everyone interacting with suppliers, or supporting colleagues who are the interface with suppliers, either in the scoping of requirements for outsourced goods and services; the negotiation with suppliers; the management of suppliers; or are reliant on the output received from an external supply source.

If a risk is unavoidable and no acceptable remedy is possible, what should the business continuity plan look like? Do you have a disaster recovery plan in place? Does the buyer have the right to terminate the contract, is there an exit strategy / supplier transition plan?

This course focusses on best practice for success but also looks at how to plan and mitigate for the worst. Proactive management of supply chain risk means being prewarned and therefore pre-armed.

Benefits of attending

By attending this very comprehensive course, you will:

Understand the risks and rewards involved with subcontracting
Learn about the different types of risks in the supply chain
Get to grips with how to identify and mitigate against the risks
Evaluate the best strategies to undertake a vulnerability assessment
Boost your knowledge of aligning express terms with your company’s attitude to risk
Appreciate how to interpret meaningful performance information

Certifications:

CPD: 12 hours for your records
Certificate of completion

Course Content

Day 1

Benefits of managing supply chain risk

Why do we subcontract: Porter’s value chain
Exercise - Porter’s value chain evaluation
Benefits of subcontracting v loss of control & potential negative impact on buyer’s organisation
“A supply chain is only as strong as its weakest link”
Negative consequences of risk in the supply chain, loss of control, potential of reputational damage
Why supporting suppliers to achieve success, benefits the buyer
Interdependency nature of the relationship
Avoiding litigation
Benefits of pro-actively managing supply chain risks, pre-warned = pre-armed
Developing a plan to recognise potential risks/challenges and effectively minimising their impact

Different causes and types of supply chain risk

Different types of risks which potentially might impact the supply chain:
- Operational
- Strategic/relationship
- Legal and reputational
- Contractual/misunderstanding/miscommunications
- Offshore sourcing/globalisation
Identifying sources of Supply Chain Risk: within the supplier’s organisation/industry sector; within the buyer’s organisation/industry sector; and within the wider macro environment, STEEPLED/PESTEL
Framework for gathering information on potential risks
Exercise - STEEPLE
Ensure you are not setting yourself up to merely react to potential risks, firefighting, but are aware of the cause of the potential risk. “Treat the cause not the effect” (Edward Bach)
- Benefits of undertaking a ‘root cause analysis’. 5 Why’s methodology
- Look at common examples of root causes: flawed sourcing strategy; poor vendor selection/incapably supplier selected/single source; poor specification; inadequate demand/supply planning process; natural/manmade disaster; poor internal controls/cultural differences; market conditions etc
Exercise - 5 Why’s

Eliminating, avoiding and mitigating against supply chain risk

When to start managing potential risks?
- Four-step approach:
- Step 1: Understanding internal need using internal needs analysis. Stakeholder involvement, clarity of expectations & needs to ensure goods/services procured are fit for their intended purpose
- Step 2: Identifying the best strategy to adopt: make/buy plan, new design or commercial off the shelf. Pros and cons of each option
- Step 3: Undertake thorough and comprehensive due diligence. Supplier evaluation and selection
  - Sources providing insights about suppliers (3rd party credit rating services, ISO, London Stock Exchange, Companies (Miscellaneous Reporting) Regulations 2018 etc.) and their reliability as an information source
  - Use of Requests for Information, Invitation to Tender (ITT), Request for Quotation (RFQ) - asking the right questions to get required insight
  - Internal tendering governance - preventing the potential of correction and fraud
  - Carter’s 10C’s approach
- Step 4: Ensure the Express Term contract adds value in providing clarity:
  - Promise clauses - clearly set out obligations/promises on the supplier, especially acceptance/measurement criteria/quality standard (Key Performance Indicators /scorecards - use of quantitative not qualitative measures); AND clearly set out dependencies on the buyer to ensure no risk of the supplier being hindered/frustrated by the buyer
  - Procedure (governance) - Right to transparency/visibility of progress. Role of Buyer’s representative in directing Supplier, the importance of understanding the terminology used between ‘shall v should’/ ‘will’ v ‘may’. Ability to adapt/change requirements. Use of subcontractors by the supplier. Right to assign by the supplier
  - Liability/Consequences - clear allocation of liabilities, especially fitness for purpose with Conformance Specification v Performance Specification and consequences of breach of contract. Understanding the meaning and use of: waiver; exclusion; disclaimer and; indemnity express term clauses

Eliminating, avoiding and mitigating against supply chain risk continued

Aligning Express Terms to own organisations’ attitude to risk, risk taker v risk-adverse. Appreciating limitations of re-allocation of risk in statute (Unfair Contract Terms Act) and depending on negotiating position with supplier/bigger picture objectives:
- Bargaining position (Porter’s 5 forces/Best Alternative to a Negotiated Agreement (BANTA) and Best Realistic Alternative (BRA);
- Strategy/objectives (Relationship v Task)
Structuring contractual relationships to support governance and collaboration. Supply Chain Management (SCM) AND Supplier Relationship Management (SRM) - ‘Strategic’ not ‘Reactive’ approaches. Encouraging feedback on performance to create opportunities for improvements
Exercise - Needs analysis scoping and red team review
Exercise - Carter’s 10C’s
Exercise - Drafting Performance Specification KPIs
Exercise - Review of express term indemnity, disclaimer and exclusion clauses

Day 2

Minimising criticality/pro-active management of supply chain risks

Clarify ownership of liabilities/potential risks to ensure the party holding responsibility takes ownership of what is required of them and the consequences if they fail and proactively manages the potential risks. Ensure no promises/liabilities are hidden in the small print and therefore overlooked
Placing the potential risk with the party best placed to manage it, not always the supplier

Minimising criticality/pro-active management of supply chain risks continued

Evaluating all identified potential risks on the supplier and undertake a vulnerability assessment of the supplier to determine the best approach
- Determining criticality of potential risk: Probability (vulnerability) v Impact (financial/time/reputation)
- Different approaches to supplier chain risk management planning - 4T’s: Tolerate, Transfer, Terminate, Treat
- Express term contractual remedies for managing supply chain risk:
  - Monetary compensation v a practical solution/remedy/Plan B
  - Whether monetary compensation alone is desirable based on the ease of sourcing an alternative supplier within the project timeframe
  - Amount and type of monetary compensation - direct, indirect/consequential, limited or unlimited
  - How to realise monetary compensation/remedy without going to court.
  - Added protection of insurance
  - Option to terminate or not in the event of a breach

Minimising criticality/pro-active management of supply chain risks continued

Crisis management process:
- Pros and cons of a Business Contingency Plan (BCP)
- BCP v Disaster Recovery Planning (DRP)
- Force Majeure options
- Exit strategy - contract termination and supplier transition planning, especially intellectual property rights
Appreciating the best time for buyers to negotiate/agree on express terms and ‘Plan B’s’ with suppliers is when they have a strong bargaining position
Setting in place good governance for Supply Chain Management (SCM). Drucker - ‘if it cannot be measured, it cannot be managed’
Gathering meaningful performance information to enable early warning of risk materialising
- Streamlining supplier data gathered so meaningful insights and enabling comparisons
- Ensure easy means to collect information
- Use technology to collect and analyse
Different types of controls:
- Preventative controls
- Directive controls
- Detective controls
- Corrective controls
Different approaches to managing performance - ‘carrot versus stick’
Action Plan approach to capture any misunderstanding between stakeholders, internal and external. SERVQUAL ‘service gaps’ - Gap, Explanation, Remedy
Adopting a flexible project management approach which enables the ability to easily adapt to manage potential risks. Agile v waterfall project management styles
Exercise - Evaluating criticality of a potential risk, Traffic Light Analysis
Exercise - 4 T’s ‘Treating’ a risk, solution not problem
Exercise - Carrot v stick approaches

Embedding supply chain risk management into corporate culture

Risk evaluation as a continuous process to manage challenges but also seize opportunities
Creating a risk awareness culture:
- Evaluating the organisation’s present attitude to risk:
  - Compliance
  - Hazard management
  - Control management
  - Opportunity management
- Formulating risk management policies and procedures to:
  - Reporting of risk events, line manager responsibilities
  - Capturing information on hazards, vulnerabilities and risks
- Using information to make improvements/lessons learnt:
  - Quality Management System (QMS)
  - Total Quality Management (TQM) v Quality Assurance (QA)
  - Six Sigma (Define, measure, analyse, improve, control)
  - Deming’s PDCA (plan, do, check, act)
Exercise - PDCA

Final questions

Course Provider

Ms Catherine Hurst,
Consultant & Trainer ,
Falconbury Ltd

Catherine Hurst is an independent commercial consultant and trainer. She was formerly a Commercial Manager at BAe Systems, following previous contract and commercial roles with GEC and Siemens, and has extensive practical experience of contract management, contract negotiation, commercial risk management and bid management.

She has been providing public training courses and in-house training courses for more than 10 years. Her success is demonstrated by the long standing relationship she has developed with numerous clients, to whom she provides regular repeats of her in-house courses.

Her training clients cross all sectors, including commercial companies, the government sector and charities. She is a highly experienced and a very popular trainer. Her style and manner of training brings the subject matter to life, making it enjoyable and easy to understand for all.