jason teo supply chain business continuity management case study in infineon world continuity...
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Supply Chain BCM: Case Study in Infineon
Jason TeoSenior DirectorBusiness ContinuityAsia & Japan region
Purpose
The purpose of supply chain resiliency awareness training is to ensure appropriate Infineon employees are aware
of the potential disruption risks associated with transport and logistics operations and the steps
necessary to minimize these risks.
Supply Chain Resiliency
VISION• Create added value through a safe and
secure supply chainMISSION Coordinate and support the implementation adequate
business continuity standards for shipping and warehousing.
Initialize and coordinate crisis management and loss investigations.
Realize governmental, customers' and authorities' resiliency obligations world-wide
Represent Infineon’s interest at international freight business continuity and security forums (Transported Asset Protection Association-TAPA, Business Continuity Management Institute - BCMi)
Benchmarking
General Situation
• International trade is one key driver of global economic growth.
• In today’s globalized world, supply chains are complex and involve a great number and variety of parties
• Virtually everyone is impacted by any disturbance in the supply chain: manufacturers, shippers, vendors, suppliers, carriers, ports and terminals, freight forwarders, cargo custodians, container leasing companies, insurers, consumers, and government agencies
• Unfortunately, supply chains are vulnerable to theft, pilferage, mother nature, and in a worse case scenario, loss of lives.
Supply Chain: BC Risks and Impact
Likelihood
Impa
ct:f
inan
cial
, leg
al, r
eput
atio
n
LOW HIGHMEDIUM
LOW
ME
DIU
MH
IGH
Terrorism
Losses by human error
Criminal OffenseTheft / pilferage
Organized crimeBlack Market / Product Piracy
Natural Disasters, Diseases, Wars…
Financial Losses
Impact on Insurance Premium
Delivery problem – impact on Infineon or customer production
Down ranking / Loss of obtained supplier status (i.e. C-TPAT)
Reputation Damage
IMPACT
Supply Chain Resilience
• "* Adverse weather was the main cause of disruption around the world, with 53 per cent citing it – up from 29 per cent in 2009.
• "* 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.
28.04.2014
The survey, Supply Chain Resilience 2010, was sponsored by Zurich and conducted by the Business Continuity Institute. It covered covers 35 countries and 15 industry sectors.
• "* 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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Supply Chain Resilience
28.04.2014Safeguard 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.
9 March 2011
28.04.2014
10
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
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
Identifying the nodes in the supply chain
TSR TSR
TSR TSR
CTBSP / TACSSCTBSP / TACSSAEO AEO
Business Continuity Management System
Risk / outage scenarios
Contain
Influence
Control
Contingency Sites
Data Center Facilities Networks
Loss of IT Processing Capability Loss of Communications
Disaster Preparedness
Compliance Fraud
Internal Operations & Infrastructure
Authorities LEA Regulatory bodies
Counterparties Service providers Vendors
Clients Partners
Finances Services Industry Infrastructure
Public Transport Emergency/Disaster Recovery Services
External Infrastructure
Economic interdependence
Public Confidence Business Cycles International linkages
Worst case scenario planning
Total destruction or severe damage to business facilities and premises
Denial of access to business facilities and premises indefinitely
Loss of Key Staff
Integrated Business Continuity Management
Security & Crisis
Management
Real Estate &Facility
Management
Loss & Fraud Investigations Environmental
Affairs & Sustainability
Asset Protection
Operations Support
BusinessContinuityPlanning
Business Continuity
April 28, 2014 Page 14
Infineon Business Continuity Departmentreports directly to Infineon Board
Key Considerations in Managing Supply Chain Disaster
• Lowest cost
• Highest Quality
• Fastest delivery
• Always available
• Always reliable
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Highest Risk?
Highest Cost?
Highest Cost?
BCP
Background checks
Just In Time Delivery?
28.04.2014
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