The CMU Electronics (CMUE) Company is a successful consumer electronics manufacturing company with operations for the past 25 years in the US, Europe and in the 21st Century in the East. Approximately 90% of the parts are sourced from China for the products produced in Europe and the Far East, whereas 60% of the parts for the US manufacturing operations are outsourced to China. CMUE sells through major retail operations with repair performed by the service groups within the major retailers. The order fulfillment cycles for the parts sourced in the Far East seems to be becoming more expensive and less dependable with longer average times. Annual Sales level of CMUE is in the range of $500 million US. CMUE is in the middle of the competitors in terms of profits and sales growth. The CMUE Board and Executive Group would like to expand the electronics product line, growth the sales level and also improve profit margins especially in the emerging markets e.g. China, Japan, S. Korea, etc. The Marketing and Sales VPs also are lobbying hard to increase the warranty programs for services covered, return programs and years covered. In the past few years CMUE has seen major downturn during the recent and continuing recession, and the recent disaster events in Japan. The company was caught for both situations with low parts inventory with weeks to months of required reduction in production. This resulted in failure to meet current orders and loss or postponement of shipments to the major retailers. The quality manager and VP of manufacturing have also identified an increase of counterfeit electronic parts especially from 4th tier suppliers in China. Although the percentage of counterfeit parts varies by product line the company estimates that the range is from 5% to 20% with some involving key components that are critical for the warranty programs. It is believed that the counterfeit parts have contributed to product failures, returns and higher costs in customer services. CMUE does not define requirements for their suppliers other than basic costs and customer service metrics. The CMUE Executive Group and Board is concerned about the current performance of the company and is suggesting that the solution is to hold greater inventory in all parts for all products. The CEO, however, with input from the financial team has suggested that the company should also take a look at the need for a formal risk management program. At this point the company does not have a formal program or a team with responsibility for continuity planning. The CEO has requested that you lead a team and develop a proposal to achieve the desired goals stated above. The CEO/Board of Directors has specifically requested that you lead a team to accomplish the following: 1. 2. Outline a program to achieve a Supply Chain Risk Management SCRM program for CMUE Evaluate the use of a software system such as that with the features of Common View offered to facilitate the SCRM program. The BOD has provided access to a PowerPoint on CommonView as well as a document that covers research on security/risk that also references the potential use of a system with the features of a CommonView. You are requested to provide the tradeoffs of the potential use of such software for the CMUE Supply Chain Risk Management program. Develop the outputs for the assignment based on the rubric provided for this Global CMUE case study Note: The Jadian organization and the CommonView software are no longer available, but software with similar and improved features does exist. Enhancing Supply Chain Risk and Performance Through Expertise and Proven Web Solutions Supply Chain Sustainability LLC & jadian enterprises, inc. SUPPLY CHAIN RISK AND A RESPONSIVE BUSINESS A Responsive Supply Chain Framework Relationship Management Information, Product, Service, Financial, and Knowledge Flows SUPPLY NETWORK M A T E R I A L S INTEGRATED ENTERPRISE Procurement Supply Chain Management Manufacturing Customer Accommodation MARKET DISTRIBUTION NETWORK C U S T O M E R S Capacity, Information, Core Competencies, Capital and Human Resource Constraints © Donald J Bowersox, Ph.D. Risk and Responsive Supply Chain Framework Response-based Business Model Supply Base Rationalization Lean Inventory Management Globalization Risk and Responsive Supply Chain Framework Response-based Business Model Disruption Risks Supply Base Rationalization Supplier Failure Quality Failure Globalization Lean Inventory Management Responsiveness ~ Risk ~ Volatility ~ Sustainability Disruption Risks Supply Base Rationalization Supplier Failure Quality Failure Globalization Back Lean Inventory Management Environmental – Social - Economic Environmental – Social - Economic Response-based Business Model DEFINING “SECURITY” Supply Chain Security “The application of policies, procedures, and technology to protect supply chain assets (product, facilities, equipment, information, and personnel) from theft, damage, or terrorism, and to prevent the introduction of unauthorized contraband, people, or weapons of mass destruction into the supply chain.” Supply Chain Security Framework Service Provider Offender Service Provider Target Asset Location Brewery Location Farm Back Location Distributor RISK AND THE SUPPLY CHAIN To Manage the Supply Chain, We Must…  Utilize unique and actionable measures of risk  Efficiently allocate limited resources  Facilitate communication within and between all nodes of a network  Transform complex data into actionable information  Mitigate overall supply network risk Define Risk Measures Severity Capacity to Cause Problems Negligible Catastrophic Rare Frequent Configurable Algorithm Probability Ability to Prevent Problems Collapses any number of inputs down to a single, actionable dimension Track Risk Across Suppliers Severity of Problem Negligible Frequent Extremely High Risk High Risk Medium Risk Rare Probability of Occurrence Catastrophic Low Risk Take Action Based Upon Risk • Risk Factors Drive Action • Higher risk … more audits, more sampling and testing procedures, more training Probability of Occurrence S e v e r i t y Frequent Occasional Unlikely Catastrophic Very High Risk 30 day audits Pull 25 samples High Risk 60 day audits Pull 20 samples Medium Risk 90 day audits Pull 10 samples Moderate High Risk 60 day audits Pull 20 samples Medium Risk 90 day audits Pull 10 samples Low Risk 120 day audits Pull 5 samples Negligible Medium Risk 90 day audits Pull 10 samples Low Risk 120 day audits Pull 5 samples Very Low Risk 150 day audits Back MANAGING CERTIFICATION AND NONCOMPLIANCES Define The Process Defined Certification & Audit Cycle Define Risk-based Supply Chain Standards Risk-based Assessment Schedule Identify and Select Participating Suppliers Modify Supplier Risk Profile Manage Assessment Resources Supplier Assessment Tools Issue Supplier Evaluations Conduct Supplier Assessments Assessment Review and Approval Monitor & Verify Corrective Actions Issue Nonconformances Back Support Systems Notification Management Document Management Integrations Internal Compliance Portals Configuration Documentation Training Internal Audits CARs and Complaints KPIs COMMONVIEW About jadian enterprises, inc jadian’s risk-based compliance and audit management solution has been implemented widely in the Accreditation and Certification market 24 hours a day, 7 days a week, someone is using jadian-developed solutions to manage compliance and risk… over a million audits processed each year, with certifications issued in 49+ countries, in multiple languages and currencies. jadian enterprises, inc   Jerry D. Norris, President / Founder, jadian enterprises, inc.. He is an accomplished software engineer, statistician and business process improvement expert. Jerry is internationally recognized as a trainer and consultant for ISO9000 quality systems and its many derivatives (e.g., QS9000) BS in Statistics and Mathematics from the University of Michigan. Karen L. Griggs, VP Marketing & Sales / Founder, jadian enterprises inc.. Karen has extensive consulting and practical marketing experience. BS in Biology from Northwestern University; MBA in Marketing from Michigan State University. Back A Fully-featured, Risk-Based Compliance Tracking Solution for Supply Chain Management Operational -Supplier Management -Compliance Programs -Audit Scheduling and Assignments -Certificates -Complaints Field Audits -Downloadable assignments, checklists, addendums -Supports multiple types of handhelds -Any type of scheme or checklist -Data synchronization Supply Chain and Multi-Site Mgt -Risk Assessments - Audit Results - Noncompliances -Corrective Actions Communication -Web Portal -Automated Alerts -Online Dashboards -Integrations with External Systems -Approved Supplier Lists -Supplier Surveys Audit Reviews, Internal Audits and Quality Assurance CommonView is a product of jadian enterprises, inc. Knowledge Management -Reporting / KPIs -Benchmarking -Training -Consulting CommonView is Globally Deployed 24 hours a day, 7 days a week, someone is using jadian-developed solutions to manage compliance and risk. Deployed globally with certifications issued in 49-plus countries, in multiple languages and currencies, tracking millions of audit records each year. » » » » » » » » » » » » » » » » » CommonView is a product of jadian enterprises, inc. Antigua & Barbuda Argentina Austria Bahrain Belgium Brazil Bulgaria Canada Chile China Costa Rica Czech Republic Denmark Egypt France Germany Greece » » » » » » » » » » » » » » » » » Honduras Hungary India Indonesia Ireland Japan Korea Kuwait Luxembourg Malaysia Mali Mexico Morocco Netherlands Peru Philippines Poland » » » » » » » » » » » » » » » » Puerto Rico Romania Singapore Slovakia South Africa Spain Sri Lanka Sweden Switzerland Thailand Turkey United Arab Emirates United Kingdom United States Venezuela Vietnam CommonView Users Set the Standards A strong presence in the certification and accreditation market, with flexibility making it applicable across many industries CommonView is a product of jadian enterprises, inc. The COMMONVIEW® Solution   A web-based business enhancement solution, focused on quality, safety, security, environment Helps organizations improve compliance & manage risk within their plants and across the worldwide supply chain      Facilitates the roll-up and summary of information such as audit results, noncompliances, corrective actions, survey results, complaints, lab tests Synthesizes quality, safety, security, and environmental data from a variety of sources to help identify trends and areas for improvement Presents the information via easy-to-use dashboards and reports Creates online dashboards to assess performance across many variables Enables organizations to improve quality and performance… and ultimately protect its brand and its image CommonView is a product of jadian enterprises, inc. CommonView – Key Characteristics  Web-based Supply Network Risk Assessment   On-line, any time Performance Metrics   Consolidates performance data; Calculates risk by category (e.g. quality, environmental, financial) and overall; Uses risk to drive risk mitigation and focus resources; Provides summary data in a scorecard format, with drill down capability for more detail For example…Best and worst performing suppliers and sites; Most common non-conformances and lab test failures Risk Mitigation made Transparent   What actions being taken to improve supplier and site performance?; How are suppliers/sites are moving toward full conformance?; Which suppliers are being put on probation or about to be disqualified? How quickly are vulnerabilities being discovered and mitigated? www.supplychainsustainability.com Back
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