Global Logistics and Supply Chain Strategies - June 2008 - (Page 35) the contract manufacturer and keeps an auditable record of all instructions and changes, Larkin says. “You not only have to make sure the right information is used on the shop floor, but there also had better be something clear in the product record that says, for example, that the paint that gets used on this product has to be non-toxic and lead free. If you can’t show that you effectively communicated that requirement to the manufacturer, you have a very serous liability problem.” Potential product defects are just one of the risks that companies need to consider when outsourcing manufacturing. “Companies may want to only focus on design and marketing and they may be really good at those, but they need to remember that they can’t outsource risk,” says James B. Rice, deputy director of the Center for Transportation and Logistics at MIT, Cambridge, Mass. “It is incumbent on every company to be thoughtful about how they manage risk and be aware of the risk they are exposed to throughout the supply chain, because companies are most vulnerable at their weakest point.” In the supply chain organization at Cisco, Harrington says, “I have a director who is leading supply chain risk management. That individual is working with crisis response, crisis management, business continuity planning, and business continuity management -- all of those types of things.” While working from a central location, this manager also interfaces directly with various functional leaders at Cisco, Harrington says. “We initiated the concept of a risk index that basically measures resiliency and that allows us to see where different products and product families fall on that risk index. With that knowledge, we can create very custom and specific mitigation strategies based on the attributes and profiles of the products and product families.” JDA Software, Scottsdale, Ariz., also has a contingency planning tool to help companies develop a risk management strategy. “This is a very robust and flexible modeling tool,” says David Johnston, senior vice president of manufacturing. “It can model various supply interruption scenarios for any particular category of products involving all the sources for that product and capacity constraints at these sources.” From this “users can get pretty granular and factbased cost data to see what the impact would be on profit or on service level, and see what the potential revenue reduction would be, given capacity limitations at alternate suppliers, he says. “This really helps the CEO or CFO make strategic decisions on how to flex their supply chain to protect themselves against some of the risks inherent in going offshore.” To access this article online, visit The Digital Edition at www.SupplyChainBrain.com. Resource Links Rockford Consulting Group, www.rockfordconsulting.com Kinaxis, www.kinaxis.com Marsh, www.global.marsh.com Cisco Systems, www.cisco.com E2open, www.e2open.com Pace Harmon, www.paceharmon.com Arena Solutions, www.arenasolutions.com JDA Software, www.jda.com All certified sites are created equal. not These South Carolina certified sites are: certainty to the site selection process. Charlotte shovel-ready, saving industries time and money, adding Each of these certified sites: Augusta is a minimum of 50 acres. has a completed Phase I Environmental Assessment. has municipal water and sewer on site or in close proximity. Hilton Head is certified by third-party Savannah engineering consulting firms. is subject to additional financial incentives. Charleston When an industry chooses a certified site in South Carolina, there are no surprises. Visit SCpowerteam.com today and see why all certified sites are not created equal. Contact Fred Gassaway at Fgassaway@SCpowerteam.com 1201 Main St., Suite 1710 | Columbia, SC 29201 | 803.254.9211 The Electric Cooperatives & Santee Cooper www.SCpowerteam.com www.SupplyChainBrain.com GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES 35 http://www.rockfordconsulting.com http://www.kinaxis.com http://www.global.marsh.com http://www.cisco.com http://www.e2open.com http://www.paceharmon.com http://www.arenasolutions.com http://www.SupplyChainBrain.com http://www.jda.com http://SCpowerteam.com http://SCpowerteam.com http://www.SCpowerteam.com http://www.SupplyChainBrain.com
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