03 managing impacts of supply chain disruption from regional
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MANAGING IMPACTS OF SUPPLY CHAIN DISRUPTION FROM REGIONAL OR GLOBAL
DISASTERS
Jason TeoSenior Director
Business ContinuityAsia & Japan region
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Myraid of Security regulationsCountry SAFE Framework related (i.e.: AEO, mutual
recognition etc) Other security regimes
Australia AEO (pilot completed Dec 2007, recommendations being drafted)
Advanced Export Data (pilot ongoing). Regulated Air Cargo Agent Regime.
China Advanced manifest reporting (will come into effect 1 Jan 2009)
Administration measures on classification of enterprises (came into effect 1 Apr 2008)
Hong Kong Nil Regulated Agents Regime (RAR) and Road Cargo Systems (ROCARS) (forms of „Known Shipper‟ program).
Japan AEO legislation passed 1 Apr 2008. Implementing regulations are ongoing.
Nil
Malaysia AEO applicable to Local Shipper 1. Customs Golden Client (came into effect Sept 2004). Being revised to a security focused / driven program but remains predominantly focused
2. IATA cargo security pilot programme
New Zealand Secure Exports Scheme Rule 109 (a form of the „Known Shipper‟ program)
Philippines Customs-Trade Alliance to Protect and Accelerate Trade (C-TAPAT) (yet to be established but a Customs Administrative Order dated 12 May 2008 mandates it)
Nil
Singapore -Customs‟ Secure Trade Partnership program (came into effect May 2007)
Regulated Cargo Agents Regime (RCAR) (for commercial air cargo came into effect 1 Apr 2008 whilst other air cargo including EDS is to be advised)
Taiwan Planning for AEO – estimated roll-out date yet to be announced.
Regulated Agent Regime (RAR) (started 1 July 2007).
Thailand AEO Working Group established 26 Dec 2007 with an estimated AEO Program start date of 1 Jan 2009
Aviation security regulations are under review with the option of introducing a Regulated Air cargo Programme
Vietnam AEO programme due to start but no final details available
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NASP
OriginalE’prise Mfg PA / Whse Air/Port Carrier PA / WhseAir/Port Cgnee
RoadFeeder/Barge
RoadFeeder/Barge
RoadFeeder/Barge
RoadFeeder/Barge
Air/Port Authority
Gr Hdling/Terminal
Gr Hdling/TerminalFSR FSR
National Security Program
Customs-Trade Partnership Against Terrorism/C-TPAT
Security Management
National Security Program
TSR TSR
TSR TSR
CTBSP / TACSSCTBSP / TACSS
AEO AEO
Supply Chain Model
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Supply Chain Resilience and Supply Chain Security
• "* Adverse weather was the main cause of disruption around the world, with 53 per cent citing it – up from 29 per cent last year.
• "* Unplanned IT and telecommunication outages was the second most likely disruption and the failure of service provision by outsourcers was third, up to 35 per cent from 20 per cent in 2009. These incidents led to a loss of productivity for over half of businesses.
• "* 20 per cent admitted they had suffered damage to their brand or reputation as a result of supply chain disruptions. For ten per cent of companies the financial cost of supply chain disruptions was at least 500,000 euros.
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Supply Chain Resilience and Supply Chain Security
• "* Where businesses have shifted production to low cost countries they are significantly more likely to experience supply chain disruptions, with 83 per cent experiencing disruption. The main causes were transport networks and supplier insolvency.
• "* 50 per cent have tried to optimise their businesses through outsourcing, consolidating suppliers, adopting just-in-time, or lean manufacturing techniques.
• "* Only 7 per cent had been fully successful in ensuring suppliers adopted business continuity management practices to meet their needs, with nearly a quarter not taking this step. Even when suppliers were regarded as key to their business, nearly half of respondents had not checked or validated their supplier's business continuity plans.
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Safeguard for Revenue & EBITSafeguard for Revenue & EBIT
What Business Continuity aims to do?
• Identify potential business interruption risks• Provide a framework for ensuring
– resilience, – contingency and – capability of effective responses
• that secures the – supply chain,
• safeguards the commitments to our customers, – our reputation, – brand and – value creating activities.
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9 March 2011
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Reactions
• Global Crisis Team set up to support local DPO team
• Emergency communications were activated to establish the safety status of employees and their families.
• Emergency relief, worth 100Euros, shipped to Japan for customers and employees
• Accommodations were reserved in Osaka and Nagoya for employees staying in Tokyo to support evacuations.
• Alternate working arrangements made (ex. Work from home)
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Key Considerations in Managing Supply Chain Disaster
• Lowest cost
• Highest Quality
• Fastest delivery
• Always available
• Always reliable
Highest Risk?
Highest Cost?
Highest Cost?
BCP
Background
checks
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Just In Time Delivery?
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Confucius:
If you think in terms of a year, plant a seed. If you think in terms of ten years, plant a tree. If you think in terms of a hundred years, teach the people
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THANK YOU