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Supply Chain Recovery is a Competitive Capability

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					Emergency Notification • Incident Management




  Overcoming Operational Glitches:
  Recovery is a Competitive
  Capability
  The need to design and plan for supply-chain risk mitigation
  and recovery, and how to go about it

  Professor Alan Braithwaite, Cranfield University and LCP Consulting
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                              Introduction
About the Author                              The old management adage goes, “Failing to plan is like planning to
Professor Alan Braithwaite, Cran-             fail”. But in today’s volatile and interdependent economy, even the best
field University and LCP Consulting           planned and organized companies are being caught by events that are
                                              beyond their control, or which are the result of plans and designs not
Alan has been working with
                                              working as expected.
Cranfield’s Centre for Logistics and
Supply Chain Management since                 These events are sometimes referred to as glitches, which on occasion
1987. He is widely published, and             may be a euphemism for an incident or full-scale crisis.
a regular speaker at conferences
around the world.                             Long before the birth of the Internet, Marshall McLuhan coined the
                                              term ‘global village’ to convey the power of communications around the
He is also Chairman of LCP Consult-           world. Today we take that for granted and the commentary has moved
ing, a leading independent consul-
                                              on to the inter-dependence of the global economy. Companies, organi-
tancy in supply chain and logistics,
                                              zations and communities are profoundly vulnerable to all manner of
which he founded in 1985.
                                              events that are outside their immediate span of control.
LCP Consulting provides supply
chain design for optimum planned              Increasingly, the term ‘supply chain’ is being used to describe these ex-
performance and for resilience.               tended links and dependencies. Until recently the effort to manage these
                                              extended chains has concentrated on achieving better stability. But the
                                              increasing rate of experience of shocks, surprises and unpredictability
                                              has added supply chain risk management and recovery to the board-
                                              room agenda.
                                              Boards’ obligations of corporate social responsibility and compliance
Table of Contents                             (CSR) are bringing into sharp focus the requirement to design opera-
1.   Introduction                             tions for improved resilience. But anticipating and designing out vul-
                                              nerability is not enough; the unexpected still happens. Based on the
2. The Global Economy and the
                                              proven correlation between supply chain ‘glitches’ and shareholder
   Implications of Extended
   Supply Chains
                                              value, companies are now also planning and designing a structured
                                              approach to recovering from shocks, which cannot all be mitigated by
3.   Introducing a Supply Chain               design.
     Risk Management Frame-
     work—Design for Resilience               And supply chain incident and crisis management is not restricted to
     and Mitigation                           physical goods organizations; all industries now have labyrinthine
4.   Supply Chain ‘Glitches’                  dependencies, which are the result of new business models and tech-
     Destroy Shareholder Value                nology. Investment banks rely on pricing and trade data feeds, other
                                              financial institutions rely on third party product distribution channels.
5.   Case Studies of Supply Chain
                                              Service providers rely on third parties to contribute service components.
     Risks: What We Can Learn
     from Experience                          Port and airport operations depend totally on the seamless interaction
                                              between many companies.
6. General Principles of Risk
   Mitigation and Recovery                    Complexity and dependency is so high that disruptions, large and small,
                                              will happen. Recovery is therefore a capability and the speed of recovery
                                              is a competitive advantage. The maxim is becoming “in future we must
                                              anticipate the unexpected”. The capability must be in place to respond
                                              in real time, without a full prior understanding of the specifics of the
                                              event and its impact.
                                              This white paper draws on established case material and supply chain
© Copyright 2008-2011, LCP Consulting and     risk management principles to show the need to design and plan for risk
MissionMode Solutions. All rights reserved.   mitigation and recovery and how to go about it.



                                                                                                                 Page 2
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         Business success may depend on a process to deal with events that can-
                                         not be designed out and for which the full impacts cannot be anticipated
                                         or predicted. Response and recovery in a global business involves par-
                                         ties working remotely to a common process with fast communications,
                                         ensuring consistent information and actions on short lead-times.
                                         Boards now recognize that their supply chain is their business and exter-
                                         nal dependencies and risks are built in at every step. Since it is impos-
                                         sible and very costly to plan and design for every contingency, recovery
                                         is a strategic capability. Key to successful recovery is the ability to com-
                                         municate seamlessly throughout the supply chain.

                                         “If a man presumes certainty, he shall end with doubts, but if
                                         he will be content with doubts, he will end with certainties”.
                                         Francis Bacon 1561-1626

                                         The Global Economy and the Implications of
                                         Extended Supply Chains
                                         The global economy for world merchandise trade has been expanding at
                                         a rate that is between 2 and 4 times the rate of GDP. The figures from the
                                         WTO are illustrated in Figure 1. (i)


Figure 1: Growth in the World
Merchandise Trade




                                         It has been one of the most pronounced and remarkable economic trends
                                         of the last 40 years. It has both fueled and enabled the growth in GDP of
                                         most developed countries.
                                         The risks and rewards of this change have been the subject of increasing
                                         academic and journalistic analysis and commentary from a variety of
                                         perspectives.




                                                                                                              Page 3
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         Rosabeth Moss Kanter (ii) identified that communities develop a criti-
                                         cal mass of capability to take leadership in specific industries where the
                                         symbiotic connections of education, culture, research and commercial
                                         skills build a powerful platform. These communities then feed on their
                                         success.
                                         She introduced the idea of the three C’s: concepts, capabilities and con-
                                         nections. Competitive advantage is about being able to initiate leading
                                         concepts: have the capabilities to deliver them: supported by the con-
                                         nections from an extended network. These connections enhance the core
                                         capability with skills that do not exist inside the firm or organization
                                         itself. Implicit in this simple idea is that the skills required to be suc-
                                         cessful are so diverse that no one organization can sustain them at the
                                         required level.
                                         In simple terms, a business is its supply chain – the dependency on oth-
                                         ers is total: covering relationships with government, regulators, educa-
                                         tion, research and suppliers of products, services and logistics.
                                         This extended chain has been identified by many authors as being a ma-
                                         jor source of risk to sustainable business performance. Braithwaite and
                                         Hall in 1999 (iii) pointed to the increasing awareness of vulnerability
                                         arising from anticipating the millennium bug.
                                         Recent work at Cranfield on supply chain risk and vulnerability (iv)
                                         created Figure 2, which highlights the risk profile of the extended sup-
                                         ply chain. Every link is liable to fail and, even through the individual
                                         statistical probability is very low, the impact of such a failure cascaded
                                         through the supply chain may accumulate into a major disruption fur-
                                         ther down (or up) the line.

Figure 2: Risk is present at every
point in the supply chain




                                         The economic dependence of a business on its suppliers is massive;
                                         the rule of thumb is that external purchases for materials, components,
                                         services and indirect supplies are 55% to 60% of revenues. In some cases
                                         this will be very much higher and can exceed 90%.



                                                                                                              Page 4
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         The drive for globalization has been driven by the development of low
                                         cost sources of supply, giving significant economic advantage to buyers;
                                         they have been able to increase profits directly or reduce prices in order
                                         to drive market share, volume and hence profits.
                                         The consequence of this dash for lower cost has been to increase the en-
                                         demic risk profile in the supply chain. Supply chain theory has its roots
                                         in industrial dynamics and control science which shows that extended
                                         response times create an intrinsically less stable system.
                                         Cutting lead times is good, extending them is bad. The implication of
                                         the growth shown in Figure 1 is that less and less business is purely “lo-
                                         cal for local” and risk will increase.
                                         The supply chain risks of global sourcing have now been widely dis-
                                         cussed; Wilding and Braithwaite at Cranfield (vi) and Sheffi (vii) at MIT
                                         provide useful references for further reading. In essence, the conclusion
                                         is that the dollar value of international sourcing is compelling but the
                                         risks can be substantial and may not always have been addressed. Fig-
                                         ure 3 illustrates the greed-to-risk relationship; the financial motivation
                                         has generally been the winning driver in strategic terms.


Figure 3: The greed-to-risk
relationship




                                         It is wrong, however, to think that risk is exclusively associated with
                                         global sourcing and trade; rather it is global sourcing and supply that
                                         has brought the issue into sharp focus. The underlying theme is bur-
                                         geoning complexity in our supply chains. For example:
                                           • Channels of customer demand with internet trading and e-fulfill-
                                             ment expanding rapidly alongside heritage routes to market
                                           • Product and service variety increasing exponentially and creating,
                                             in turn, additional complexity and risk arising from conflicting de-
                                             mands on capacity
                                           • Outsourcing of logistics and supply, with companies engaging a
                                             wider variety of services
                                           • Consolidation and specialization of sourcing and supply taking
                                             place to secure economics increasing, irrespective of whether it is
                                             off-shored or global




                                                                                                             Page 5
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         Introducing a Supply Chain Risk Management
                                         Framework—Design for Resilience and Mitigation
                                         The economic pressure described in the previous section is inexorable;
                                         it is forcing companies to increase customer choice and service while at
                                         the same time reducing cost. The question is how does a company as-
                                         sess, internalize and mitigate the associated risks?
                                         Work at Cranfield on behalf of a British Government Department (v)
                                         developed a classification of the types of risk to which a business is
                                         exposed.
                                         Risk was classified into those external to the firm, through demand,
                                         supply and environmental factors, and those which are internal, and
                                         potentially self-inflicted, through processes, controls and lack of risk
                                         management.
                                         This concept is illustrated in figure 4, which contains a brief description
                                         of the types of risk in each segment. Mitigation is the most crucial seg-
                                         ment in this model since it introduces the idea that risks can be identified
                                         and managed, down if not out, through design of the chain and the way
                                         in which it is set up and operated. A workbook was created to support
                                         the process of identifying risks and is a helpful resource in this process.



Figure 4: The dimensions of
supply-chain risk




                                         The workbook invites management teams to consider their supply
                                         chains in a structured way in order to identify their risks and vulnerabil-
                                         ities in terms of the scale, cost, duration and recovery actions that would
                                         be needed should risk turn to reality. This provides a cost and time
                                         estimate for each potential failure irrespective of its probability which,
                                         by definition, is low.
                                         Alongside this estimate the process invites the team to consider the miti-
                                         gating actions through which they can design out the risks together with
                                         the costs of such measures.


                                                                                                              Page 6
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         There are a number of important insights from such work that are some-
                                         what counter-intuitive.
                                           • Mitigating measures tend to converge for a number of risks – doing
                                             some things differently will catch a lot of the potential problems
                                           • The cost of these measures is often very small and certainly insignif-
                                             icant in relation to their consequences, were they to occur. So this
                                             is about organization, governance and careful planning in order to
                                             have the benefits while reducing the risk
                                           • The consideration of probability is a natural tendency but totally
                                             unhelpful. The probabilities are, by definition, very small; otherwise
                                             they would have been designed and managed out as ‘known issues’
                                           • In the terms of Donald Rumsfeld, we are interested in the ‘known-
                                             unknowns’ and the ‘unknown-unknowns’. A good process of dis-
                                             covery can help to turn many of these into ‘knowns’ where mitiga-
                                             tion and responses can be planned; they may be remote but they are
                                             more predictable than was originally thought
                                           • This means that the self honesty of the process is critical to its suc-
                                             cess and, in the context of any organization’s power vortex, is dif-
                                             ficult to achieve
                                           • Even when many unknowns are converted to knowns, there will still
                                             be events that cannot be anticipated; it’s wise to have a robust recov-
                                             ery process to deal with them as they arise, which is also mitigation
                                         Given the evolution of tools and structures, it’s clear that failing to plan
                                         is like planning to fail, and in the future, we must anticipate the unex-
                                         pected.
                                         The questions that arise from the analysis so far are:
                                           • What do glitches really cost? Is it worth the effort to plan for them?
                                           • What can we learn from the experience of others?
                                           • What general principles can be drawn from those experiences?
                                           • How should a company organize to be able to recover from
                                             problems?
                                           • How can the MissionMode platform with LCP’s expertise support
                                             accelerated recovery?

                                         Supply Chain ‘Glitches’ Destroy Shareholder Value
                                         Glitches cost a lot more than might be imagined. The impact can be huge
                                         as experienced in terms of share price and shareholder value. These
                                         events also hit executives’ bonuses and share incentive schemes. At the
                                         extreme they are career limiting.
                                         The basis for this statement is provided by some formative research by
                                         Singhal and Hendricks (viii) who analyzed a sample of 861 profit warn-
                                         ing announcements from publicly quoted companies linked to supply
                                         chain difficulties.


                                                                                                                Page 7
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         They coined the term ‘glitches’, which in many cases is a euphemism for
                                         a full-scale disaster. They found that announcement of these problems
                                         was associated with an 8.62% market adjusted reduction in shareholder
                                         value; if a period of 60 days before and after the announcement is includ-
                                         ed the effect is about minus 20%. This finding is illustrated in Figure 5.
                                         Supply chain problems for the purpose of their research were classified as
                                         including: parts shortages; changes by customers; ramp and roll out prob-
                                         lems; production problems; development problems; quality problems.
                                         These so-called ‘glitches’ are occurring frequently and for a wide range
                                         of causes; it is clear that such issues are not isolated problems. They
                                         erode shareholder value to an extent that must be stomach churning for
                                         the CEOs involved.


Figure 5: The effect of ‘glitches’
on shareholder value




                                         They affect the company, customers and suppliers alike, often with seri-
                                         ous consequences. What is more, supply chain value is perishable; any
                                         ‘problem’ will have a recovery period during which the performance of
                                         the organization is sub-optimized in terms of either or both revenue and
                                         cost. Capacity and performance is lost forever.
                                         Boards, therefore, are having to start to make more structured choices
                                         about the exposure to risk that they will mitigate through design and
                                         that which they elect to deal with ‘if it happens’. It was not always this
                                         way; the profit motive and investor short-termism has been such that
                                         “profit today” was better than “sustainability in the future”.
                                         But governance and sustainability are now the watchwords; compli-
                                         ance and transparency are dictating the need for new approaches to risk
                                         management.
                                         As the following examples show, the risk agenda is a matter of corporate
                                         and executive survival. The unexpected is lying in wait at every junc-
                                         tion. “A business is its supply chain—risk and dependency is built in.”


                                                                                                               Page 8
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         Case Studies of Supply Chain Risks: What We
                                         Can Learn from Experience
                                         There has been major publicity for many cases of supply chain failure.
                                         Two examples from a few years ago are:
                                           • British Airways for its disastrous implementation of Terminal 5 at
                                             London’s Heathrow
                                           • Bear Stearns, and others, who lost their independence as a result of
                                             investing in sub-prime derivatives.
                                         These incidents may not immediately appear to be supply chain related,
                                         but closer inspection should change that view
                                         British Airways commissioned a new factory (terminals process passen-
                                         gers, not unlike chickens) and failed to test adequately and get a secure
                                         handover on schedule. As a result they have admitted that it will cost
                                         them tens of millions of £ Pounds and add to their existing profit warn-
                                         ing which has distracted from a record profit announcement at the same
                                         time. In Singhal and Hendricks terms this is a ramp and roll out problem
                                         Bear Stearns effectively bought bad inventory in the form of mortgage
                                         securities on which there was no redress against the suppliers. In Sing-
                                         hal and Hendricks terms this was a supplier quality problem. Attempt-
                                         ing to conceal the problem simply made it worse; if you keep bad food
                                         in the fridge, it eventually taints everything.
                                         In the more prosaic industrial world, the case material is building on
                                         how supply chains go wrong and their financial impact. Sheffi and
                                         Wilding documented many well-known examples from several years
                                         earlier, such as:
                                           • Ericsson losing its handset business as a result of a fire in a micro-
                                             chip factory because Nokia read the situation better and responded
                                             faster
                                           • The impact of the earthquake in Kobe, Japan on a range of industrial
                                             producers and the response of Toyota
                                           • The effect of a foot-and-mouth outbreak in the UK that had disas-
                                             trous consequences for a wide range of industrial producers.
                                         They might equally have described the:
                                           • The catastrophic effect on Sainsbury’s supermarkets as a result of
                                             supply chain change
                                           • The impact of bio-fuel growth on food production
                                           • Land Rover losing its supply of vehicle bodies due to supplier finan-
                                             cial collapse
                                           • Coca-Cola losing its bottled water business in the UK as a result of
                                             contamination.
                                           • $Billion write-down of inventory at CISCO in the wake of the Y2K
                                             and technology downturn


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Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         This list could be yet more extensive as Singhal and Hendricks’ research
                                         indicates through their profit warning analysis. But these are just the
                                         events that hit the headlines and where the consequences get measured
                                         and reported. Organizations around the world are experiencing inci-
                                         dents and crises (glitches) each and every day; which impact on the abil-
                                         ity of the organization to operate effectively.
                                         The challenge is to plan and anticipate better and then deal effectively
                                         with events as they occur. On this basis, Nokia and Toyota are clearly in
                                         the best in class league. In both cases they showed an ability to recover
                                         from events where disruption might have been generically anticipated
                                         but the specifics could not.
                                         Nokia recognized the event faster, understood its implications and mo-
                                         bilized to capture remaining global capacity of chips well before Erics-
                                         son. As a result Ericsson experienced long term interruption to its ability
                                         to supply and lost its market position
                                         Toyota rapidly engaged its network to move tools and re-start produc-
                                         tion of crucial components – losing only 2 to 3 weeks of assembly which
                                         was a gap it was able to make up.
                                         Recovery is clearly a strategic competence for which corporations
                                         should put in place well rehearsed routines and support mechanisms.


                                         General Principles of Risk Mitigation and Recovery
                                         A series of generalizations emerge from this analysis of risk events that
                                         can be summarized in the bullets following.
                                           • Many events are capable of a greater level of anticipation for which
                                             planning and design would reduce the risk of occurrence and/or the
                                             consequences. For example:
                                              o Keeping a plant on an earthquake fault line, in a cyclone area or
                                                adjacent to a high hazard facility requires contingency planning
                                              o Ramp and roll out of products, facilities and anything technologi-
                                                cal requires appropriate project governance and control
                                           • Vulnerability is accentuated when a combination of events occurs,
                                             one of which on its own would not have caused the catastrophe but
                                             when combined were fatal
                                              o Some of these events will be the result of poor controls and op-
                                                erational compliance
                                              o They are easy to fix and are only a surprise because all the signals
                                                were ignored
                                           • A few events are so difficult to anticipate in their specific form that
                                             they cannot be specifically planned and mitigated:
                                              o They are usually outside the immediate control of the firm
                                              o Their consequences are generally the same as the two previous
                                                points and so the recovery plan can draw on how to correct for
                                                other consequences.


                                                                                                            Page 10
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                           • The keys to risk management are a controlled and governed pro-
                                             cess of planning, mitigation design, rapid detection and accelerated
                                             response and recovery
                                              o These are critical capabilities covering detection, response devel-
                                                opment and managed recovery
                                              o High performance requires real time visibility and communica-
                                                tions together with the skills to manage the situation
                                         All of these generalizations require the right questions to be asked dur-
                                         ing planning and then during the event if one occurs. The importance of
                                         developing and maintaining an integrated capability through the phases
                                         of recovery is emphasized in Figure 6. This diagram overlays response
                                         modes and horizons on the graph of the impact on share price of a ‘so
                                         called’ glitch. The timing of this overlay is not exactly right as a business
                                         would hope that detection and recovery would have been achieved and
                                         initiated at the minus 60 day point to achieve the best recovery.
                                         How should a company organize to be able to recover from problems?
                                         For the purpose of the balance of this paper, the assumption will be that
                                         the company has designed and planned for operational resilience. The
                                         main vulnerabilities have been identified to the best of the company’s
                                         ability and, where the business case justified, resilience measures have
                                         been put in place. This can be done using the framework illustrated in
                                         Figure 4 and the workbook referred to earlier.
                                         But that is not enough to ensure operational resilience; events will still
                                         happen from short term disruptions lasting just a few days to major
                                         events where the impact will be felt for weeks or months. It is almost
                                         impossible to point specifically to the likely impact of any event on the
                                         business before it happens.


Figure 6: The effect of detection,
response and recovery




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Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         For example:
                                           • An earthquake or tsunami, while a long term catastrophe for the
                                             residents, can permanently disrupt a supply chain or have an effect
                                             of only a few days
                                           • Industrial disruption can be short lived and wildcat or it can stop a
                                             particular operation for months
                                           • Quality issues can be either short term, or damage yields for long
                                             periods
                                           • Terrorist actions may take out a critical capability for good or lead
                                             to quite a short disruption.
                                         And, it is important to recognize that one operation’s disaster may be
                                         just a minor irritation for another.
                                         While normal operations and even anticipated disruptions can be proce-
                                         duralized, when un-anticipated events strike there is an important shift
                                         towards free-form teamwork and collaboration. This transition can be
                                         a subtle one as the business moves from standard process to accelerated
                                         and extended collaboration (incident management or crisis manage-
                                         ment), characterized by increased communication between participants
                                         and agility in response.
                                         It is well known that when a crisis hits, communication becomes of para-
                                         mount importance because only through communication can the correct
                                         actions be determined and delivered (ix). Working in a supply chain
                                         where there may be many organizations active (see Figure 2) makes
                                         communication even more important.
                                         So, organizations need to have in place a phased process and communi-
                                         cations structure through which they can mobilize their response for the
                                         supply chain crisis management. The acronym DEDReC-M is a conve-
                                         nient way to remember the sequence.
                                           • Detect – identify and alert the business to an event that may have a
                                             serious impact on business performance
                                           • Evaluate – evaluate the implications for the business in terms of
                                             scale and duration in order to guide decision making and response
                                           • Decide – determine the appropriate actions to guide the business
                                             through the event and speed recovery
                                           • Recover – mobilize the recovery actions that have been decided
                                           • Coordinate – coordinate the actions of players in the chain both
                                             inside and external to the business – directing the recovery
                                           • Monitor – monitor the recovery program to ensure that the situation
                                             moves from a status of ‘intensive care’ through ‘release to normal’
                                         The controlled transition through this phased process requires central-
                                         ized visibility and direction, instant communications and rapid feed-
                                         back. Since most companies are now widely dispersed across many
                                         operating locations, the process requires a “virtual” command center
                                         approach with secure and universal communications to all the players



                                                                                                             Page 12
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         who may be involved. It is virtual in the sense that there is no physical
                                         location where all players come together to work on the problem.
                                         From a status of ‘business as usual’ to full scale crisis management can
                                         be a matter of minutes or hours. As described earlier in this paper, the
                                         speed of response may make all the difference to the outcome.
                                         There will not be time to bring people together in a single place and
                                         established communications methods may not be fully functioning. In-
                                         deed, people should often be located closest to the areas where they can
                                         direct the local response rather than in a remote crisis center far away
                                         from where things need to happen.
                                         It is simply unrealistic to expect that representatives from the whole
                                         supply chain can gather in one physical location. The command center
                                         needs to be able to receive situation reports from many locations under
                                         different communications modes that can be logged to provide a single
                                         picture of the situation.
                                         From this the leadership team, who may also be acting remotely, need to
                                         be able to assess the implications, determine and then direct and moni-
                                         tor the response across all the stakeholders.




Figure 7: The command center,
using different modes




                                         This command center approach is illustrated in Figure 8, with a com-
                                         bination of alerting to mobilize and collaboration to drive the response
                                         forward to a successful conclusion.
                                         The communications through the command center are crucial to the
                                         detect, evaluate, decide, recover, coordinate and monitor (DEDReC-M)
                                         crisis management process. However, the planning, testing and exercis-
                                         ing are the first step and equally important.
                                         To manage recovery, the business must have well-rehearsed and docu-
                                         mented crisis management plans that, accepting the uncertainty of the
                                         event itself, prepare the business for the type of disruption.




                                                                                                            Page 13
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         The preparation, case scripts and exercising are a major investment by
                                         the firm to anticipate the issues and build a state of readiness with a
                                         team that can be mobilized at any time.
                                         If the crisis team is well rehearsed and can work together effectively us-
                                         ing a command center, they will be well placed to deal with any event,
                                         prepared for or not.
                                         The ability to run the command center in a decentralized way requires
                                         that there is total information visibility of the situation that is in line
                                         with the crisis management plans for the situation.
                                         The combination of different times and locations is key to the command
                                         center approach. It is the only way to run a continuing situation across
                                         many locations and time zones. This is shown in figure 9 with a diagram
                                         from MissionMode.


Figure 9: MissionMode combines
different times and locations
using different modes




                                         The control center can be accessed through a range of screens as shown
                                         on page 16. From the moment the situation is detected and an alert is-
                                         sued, the log can follow the information and analysis as the situation is
                                         managed through. Requests and instructions can be issued to key people
                                         and the feedback logged.
                                         Because the ‘A’ team will have exercised on the scripts and lines of com-
                                         munication, and leadership is clear, the process is designed to work well
                                         from the first moment. The team can come together for conference calls as
                                         required and they’ll all be working from the same information base.
                                         If specialist advice and information or particular skills are required, then
                                         these can be bought in and the people patched into the system. Of par-
                                         ticular importance is the ability to keep private information private, yet
                                         share that information which should be shared.
                                         Following the exercise or real crisis, the command center log can be used
                                         to analyze the effectiveness of the response and recovery and improve
                                         the business processes between all parties in the supply chain.




                                                                                                              Page 14
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through the right devices.                                  The Situation Center gives you an accurate com-
                                                            mon operating picture for making informed deci-
The system is smart enough to adapt to constantly           sions, and ensures that no detail is overlooked.
changing situations, yet it’s so easy to use that
alerts can be sent in as little as ten seconds. A real-
time dashboard confirms delivery of each message            Online tools that are easy to implement,
and the responses, such as “on-site in 30 minutes.”         cost-effective, and require minimal training.



                          Contact us to learn more or schedule a demonstration
                                         North America     International
                               Toll-free: 877.833.7763     Phone: +44 1494 837198
                              Phone: +1 312.445.8811       High Tor, Lee Common
                             20 W Kinzie St., Suite 1220   Great Missenden HP16 9LA, UK
                                Chicago, IL 60654 USA

                           info@missionmode.com            www.missionmode.com



                       “With MissionMode, we feel like we are their only customer.”
                                     Director of Corporate Crisis Management
                                        at a major global logistics company




                                                                                                               Page 15
                                The MissionMode Situation Center
                A secure hub for communications, collaboration and control—anytime, anywhere




                           1




                                                                                     4




                       2




                           3




                                                4. Users share information and come to informed decisions



                                                                             “MissionMode radically reduces the
                                                                              time it takes to get an overview of
                                                                              an incident and take appropriate
                                                                                action to minimise its impact.”
                                                                                        Bob Graham,
                                 2. Monitor and assign tasks                   Group Business Risk Manager, TBI




1. Team status at a glance

                                  3. Access plans, procedures and any type of file




                                                                                                             Page 16
Recovering From ‘Glitches’: Recovery is a Competitive Capability


                                         References
                                          i.    World Trade Organisation – www.wto.org
                                          ii.   Moss Kanter, R (1997) World Class: Thriving Locally in the Global
                                                Economy, Simon & Schuster Ltd
                                          iii. Braithwaite, A. & Hall, D. (1999) “Risky Business? Critical Deci-
                                               sions in Supply Chain Management”, Supply Chain Practice, Vol. 1,
                                               No. 3, pp. 44-56.
                                          iv. Hall, D. & Braithwaite, A. (2001) “The Development of Thinking in
                                              Strategic Supply Chain & Logistics Management” in Handbook of
                                              Logistics and Supply Chain Management, (ed) Brewer, A., Button,
                                              K. & Hensler, D., Oxford: Pergamon, pp. 81-98.
                                          v.    Cranfield 2003 for the Department for Transport, Supply Chain
                                                Vulnerability ~ A Self-Assessment Workbook

                                          vi. Braithwaite, A. & Wilding, R. (2006) “The supply chain risks of
                                              global sourcing” in Managing Business Risk, (ed) Reuvid J, Sim-
                                              mons & Simmons

                                          vii. Sheffi, Y, (2005) The Resilient Enterprise: Overcoming Vulnerability
                                               for Competitive Advantage, Massachusetts Institute of Technology

                                          viii. Singhal, V.R. and Hendricks, K. Supply Chain Management Re-
                                                view, January/February 2002.

                                          ix. Sapateiro, C, & Antunes, P (2008) Crisis Management: A collabo-
                                              ration model for unstructured activities Institute for Complexity
                                              Science: 1st ICC Workshop on Complexity in Social Systems, ISCTE
                                              Lisbon, January 2008




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                                                                                                           Page 17

				
DOCUMENT INFO
Description: In today's volatile and interdependent economy, even the best organized companies are increasingly vulnerable to many types of supply chain disruptions that are beyond their control. This white paper details how mitigating supply chain disruptions can create a competitive advantage. Executives, board members and supply chain leaders will better understand the need for mitigation and how to go about it. The author, Professor Alan Braithwaite, draws upon established case material and risk management principles in the paper. Topics include: • How supply chain glitches destroy shareholder value • General principles of risk mitigation and recovery • The global economy and the implications of extended supply chains
Wayne Blankenbeckler Wayne Blankenbeckler eMarketing Manager www.missionmode.com
About MissionMode's web-based Emergency Notification and Incident Management applications streamline the response to any type of crisis or operations issue. They're built for mission-critical enterprise use, yet they're easy to use and manage. Our innovative mobile apps enable you to drive an incident response using tablets and smartphones. Industry-leading organizations around the world depend on MissionMode when the pressure is on.