MANAGING RISK IN THE SUPPLY CHAIN
The course focuses on 13 key objectives, including a review of 6 risk categories, the application of the Law of Agency and SOX (its effect on Supply Management), managing hazardous waste and preventing employee discrimination and/or harassment with fundamental exercises and case studies.
What do the events: fires, earthquakes, tornadoes, tsunamis, labor strikes and political upheavals have in common? They can all pose risk in the Supply Chain. A second key question is what is the difference between risk and uncertainty? Risk is quantifying the financial impact of a bad event multiplied by the percentage of probability that this bad event will happen and uncertainty is even worse, in that you do not know and/or are not prepared for the bad event if/when it happens!
So as an example, assume that your senior management is very interested in you sourcing a supplier in a country that has high risk in three key categories: (1) Political (the government could be toppled any day), (2) Legal (your contract means nothing in their courts of law) and (3) Economic (they are in a deep recession). But the good news is that the price quote is 30% less than buying it domestically! Also assume that the amount of business that you want to give this supplier is $2M and the probability that these negative events would happen is 50%. The risk impact would then be $2M x .50 = $1M. Senior management would then have to decide if the benefit of the price savings would be worth the risk.
Therefore, Risk Management is defined as: “directing or conducting the activities necessary to reduce, eliminate or mitigate the factors that could lead to injury, loss, damage or failure.” If we looked at each one of these definition factors individually – and applying the example above of sourcing from an ex-Domestic country, then to reduce could be to have a domestic backup source that could be ramped up in the event the international source has problems.
To eliminate would be to not buy from the supplier in the volatile country. To mitigate would be to have a plan in place when the bad event happens due to political, legal and/or economic factors. Although traditionally organizations had a formalized effort to manage customer risk (the client goes to the competitor, does not pay and/or goes out of business), this course will give you pertinent techniques to manage a relatively new challenge in the Supply Chain, the risk of negative events coming from your suppliers.
To support all of the above, this course will be featured in SCE’s virtual classroom with all of the functionality featured in our DEMO and based on our teams working with major corporations in BIC-Best-In-Class practices. It will be a blend of educational topics, pertinent case studies, and practical stories based on past practices. You will learn vital skill sets but also have fun!
Upon completion of the Managing Risk In The Supply Chain course, the participant will:
- understand the definition of risk management including differentiating between reduction, elimination and mitigation of risk
- follow a five-step approach including scope, impact, alternatives, plans and readiness
- create supplier risk profiles focusing on such factors as relationship, performance, people, environment and financial health
- compare and contrast the six risk categories of financial, operational, reputation, legal, environmental and technical
- apply the Law of Agency and when to involve legal counsel in supplier risk matters
- review the Sarbanes-Oxley (SOX) legislation and how it applies to customer-supplier relationships
- review key international restriction laws such as: the Foreign Corrupt Practices Act, the International Anti-Bribery Act, Anti-Boycott Legislation and the Export Administration Act
- differentiate the five phases of the Product Life Cycle (PLC) and how to access risk in each phase
- understand the risk effect of hazardous waste including a review of the Resource Conservation and Recovery Act (RCRA) which categorizes the various types
- develop contract language that minimizes the risk associated with hazardous waste violations
- review key audit issues including reporting and certification
- minimize the risk associated with sexual discrimination or harassment of employees including the key compliance laws
- understand how to reply to employee discrimination violations and the associated financial risks from lawsuits
Depending on the learning style of the participant, this course is designed to be approximately 15 hours in the e-Learning – virtual classroom. Additionally, at the end of the course – you will take an on-line quiz to make sure you have grasped the key points.
Upon completion of the Managing Risk In The Supply Chain course, the participant will receive a certificate of completion with 15 ceus of credit.
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