Driven by a high intensity of competition, modern companies have put much effort into reducing costs in their supply chain. Two important trends on the way to achieving that goal are globalization and lean management. Both have led to complex, highly distributed supply chains and low buffer stocks. Indeed, these mechanisms brought lower costs but at the same time an increase of vulnerability and risk in modern supply chains.
Unexpected disruptions in supply chains can cause a huge impact on businesses, such as high financial expenses and supply delays on the short-term, but also negative brand reputation and falling investor confidence on the long-term. This is why the implementation of the approaches “supply chain risk management (SCRM)” and “business continuity management (BCM)” has become crucial in the sphere of top-level management. Digitization is another disruptive trend within the present economic system. The volume of available data for businesses has been increasing exponentially in the last years. But at the same time most companies have failed using these data, essential in decision-making process. These unused data offer great potential: With Big Data Analytics they could turn companies’ supply chain risks into a competitive advantage.
This case study deals, in virtue of the quote from JFK, with the research question: “How can IT tools support companies making their supply chains resilient?” To this effect, the first chapter describes key risks in modern supply chain in order to create a general awareness of the scope of SCRM and BCM approaches. The next chapter then compares two common supply chain strategies with a focus on resilience in order to evaluate the proposed solution at the end of this case study. Thereupon Chapter 4 answers the research question of this case study by comprising the key components of the SCRM solution “DHL Resilience 360”. The last chapter evaluates the proposed solution based on the output of Chapter 3 on the one hand, and on own practical considerations on the other hand.
Table of Contents
1 Introduction
2 Risks in modern supply chains
3 Supply Chain Management Risk Strategies
4 DHL Resilience360
4.1 Risk Assesment
4.2 Incident Monitoring
4.3 Risk Response
5 Evaluation of the proposed solution
6 Sources
Objectives and Topics
This case study examines the intersection of supply chain management, risk mitigation, and digital technology. The primary research question addresses how IT tools can be utilized to support organizations in building more resilient supply chain networks capable of navigating modern global challenges.
- Analysis of prevalent risks in globalized, lean supply chain structures.
- Evaluation of theoretical SCRM frameworks by Deloitte and PWC.
- Technical deep dive into the DHL Resilience360 platform components.
- Assessment of the role of Big Data Analytics in proactive risk management.
- Critique of technological solutions versus organizational governance requirements.
Excerpt from the Book
4.1 Risk Assesment
With the software “risk assessment”, companies can gain transparency. The tool displays every node of the supply chain on an interactive world map down to third and fourth-tier suppliers (see figure 4).22
This simple visualization of transportation routes, production sites etc. can already trigger a Eureka moment for decision makers by giving them a holistic view of their supply chain. Based on this map, the tool evaluates a risk level for each location and identifies risk hotspots.23
For this purpose, the software uses DHL’s unique “Supply Chain Risk Exposure Index”. This methodology is based on 20 different supply chain risks from 4 categories (Natural Disaster Index, Operational Index, Political Violence Index and Socio-Political Index). Figure 5 shows an example of how the risk index can be used. The data come from external sources such as insurance companies, government agencies, social media and supply chain partners on the one hand and from internal sources (DHL and the customer) on the other hand. The impact calculation of the risks can be customized matching the customer’s specific characteristics while the default calculation is based on probability and financial impact.24
Furthermore, “risk assessment” allows companies to simulate mitigation strategies or different configurations in the supply chain by comparing risk changes with cost savings. The insights from “risk assessment” can assist decision makers with business continuity planning by providing an overview of potential risks and the supply chain in general. Hence, this part of the “Resilience360” solution improves the proactive capabilities of a company.
Summary of Chapters
1 Introduction: This chapter highlights the impact of globalization and lean management on supply chain vulnerability and introduces the research question regarding IT support for resilience.
2 Risks in modern supply chains: This chapter categorizes various risk factors such as operational issues, natural disasters, and socio-political events that modern, globally connected supply chains face.
3 Supply Chain Management Risk Strategies: This chapter introduces theoretical frameworks for resilience, emphasizing the importance of visibility, flexibility, collaboration, and control.
4 DHL Resilience360: This chapter provides a detailed analysis of the DHL solution, explaining its core components: Risk Assessment, Incident Monitoring, and Risk Response.
5 Evaluation of the proposed solution: This chapter critiques the effectiveness of DHL Resilience360 in the context of professional SCRM frameworks and discusses implementation challenges.
6 Sources: This chapter lists all cited academic and industry-related materials used throughout the case study.
Keywords
Supply Chain Risk Management, SCRM, Business Continuity Management, BCM, Resilience360, DHL, Digitization, Big Data Analytics, Risk Assessment, Incident Monitoring, Risk Exposure Index, Supply Chain Resilience, Global Logistics, Operational Risk, Mitigation Strategies.
Frequently Asked Questions
What is the core subject of this paper?
The paper focuses on Supply Chain Risk Management (SCRM) and the application of digital tools to enhance supply chain resilience in a complex global business environment.
What are the primary thematic areas?
The study covers global supply chain risks, theoretical resilience frameworks, digital supply chain mapping, and practical risk mitigation strategies.
What is the central research question?
The research seeks to determine how IT tools can practically support companies in making their supply chains more resilient to disruptions.
Which scientific method is applied?
The work utilizes a case study approach, combining literature-based theoretical analysis of SCRM models with an empirical description and evaluation of the DHL Resilience360 software platform.
What is covered in the main section?
The main section details the categories of modern supply chain risks, compares frameworks from Deloitte and PWC, and provides a functional breakdown of the DHL Resilience360 solution.
What are the key descriptors for this study?
The study is characterized by keywords like Supply Chain Resilience, Digitization, Big Data Analytics, and proactive Risk Assessment.
How does the "Supply Chain Risk Exposure Index" function?
It aggregates data from 20 different risk factors across four categories, utilizing external and internal data sources to provide a weighted risk profile for specific supply chain nodes.
What limitation does the author note regarding technological solutions?
The author notes that while tools like Resilience360 provide visibility, they do not replace the necessity for organizational governance and internal process changes required to achieve true resilience.
How does the "Risk Response" component differ from the software modules?
While Risk Assessment and Incident Monitoring are software-based, the "Risk Response" component represents a provision of professional services involving human expertise for emergency mitigation.
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- Johannes Euler (Autor:in), 2017, Supply Chain Risk Management. How IT tools can help making supply chains resilient, München, GRIN Verlag, https://www.hausarbeiten.de/document/355694
