The crucial role of risk management in future supply chains

Auto Supply Chain Prophets

White Paper - Leveraging Risk Management

In this episode of the Auto Supply Chain Prophets podcast, hosts Cathy Fisher, Terry Onica, and Jan Griffiths explore the critical topic of risk management in the automotive supply chain. The conversation commenced with the hosts sharing their experience with an EV startup, underlining the crucial role of robust supply chain processes for successful scaling.

Transitioning to the main topic of risk management, Cathy and Terry discussed their recently updated white paper, which explores risk management strategies and the development of resilient supply chains. They further delved into the paper's relevance amid current supply chain challenges, including the COVID-19 pandemic and the semiconductor crisis.

The conversation highlights the necessity of cross-functional collaboration in identifying and addressing supply chain risks. The hosts stress the significance of CEO involvement, cost considerations, and risk appetite in creating effective contingency plans. The episode concludes by emphasizing the critical role of proactive risk management, with a continual focus on the dynamic nature of risks, necessitating frequent assessments and quarterly reviews.

Themes discussed in this episode:

• Supply chain challenges
• Future of supply chain in the EV era
• Working with EV startups
• Importance of robust processes
• Update on risk-based thinking
• Cost considerations and risk appetite
• Proactive risk management
• Cross-functional collaboration

At the heart of The Prophets’ vision are “The 24 Essential Supply Chain Processes.” What are they? Find out, and see the future yourself. Click here

Featured on this episode:

Name: Cathy Fisher

Title: Founder and President, Quistem

About: Cathy’s firm helps its clients, particularly automotive manufacturers, eliminate customer complaints and increase their profits. She has worked in the automotive supply chain since the 1980s when she started her career with General Motors.

Connect: LinkedIn

Name: Terry Onica

Title: Director, Automotive at QAD

About: For two decades, Terry has been the automotive vertical director of this provider of manufacturing Enterprise Resource Planning software and supply chain solutions. Her career began in supply chain in the late 1980s when she led a team to implement Electronic Data Interchange for all the Ford assembly and component plants.

Connect: LinkedIn

Name: Jan Griffiths

Title: President and Founder, Gravitas Detroit

About: A veteran executive in the automotive industry, Jan previously served as chief procurement officer for a $3 billion, Tier 1 global automotive supplier. As the president of Gravitas Detroit, Jan provides online courses, speeches, podcasts, and workshops to break the mold of command-and-control leadership to help you unleash the potential of your team and allow authentic leadership to thrive.

Connect: LinkedIn

Mentioned in this episode:

• 24 Essential Supply Chain Processes
• AIAG, MMOG/LE
• ISO 9001 & IATF 16949
• White Paper for Leveraging Risk Management in Automotive

Episode Highlights:

[03:32] Elevating risk management in the supply chain: Explore the updated white paper's focus on practical risk-based approaches for tackling today's supply chain challenges like COVID-19 and the semiconductor crisis. Learn about the essential need for collaboration across different company parts, involving CEOs, to identify, assess, and manage supply chain risks effectively.

[09:25] Leadership role in risk management: Discusses the challenges of supply chain leaders embracing risk management. They stress the CEO's pivotal role, share a compelling example highlighting the impact of contingency planning, and emphasize the need for a broad risk evaluation, including suppliers and customers.

[16:52] A guide for supply chain leaders: Terry and Cathy explain why the white paper is a good read for supply chain leaders, giving essential information on compliance requirements and a guide to robust contingency plans. The document encourages thinking differently, seeing risk management as a tool to try new ideas and innovate confidently.

[19:08] Key advice for auto suppliers: The hosts discussed the critical role of proactive risk management, emphasizing the need for frequent risk assessments and quarterly reviews. Highlighting the dynamic nature of risks, they stress the industry's resilience while urging the importance of cross-functional discussions for strategic risk preparation.

Top Quotes:

[04:57] Terry: “What's really nice about the document is that there are a lot of new people in the industry who don't necessarily understand risk management, risk assessment, or contingency planning. And so, I think it's a really excellent document to help those who are new to the automotive industry.”

[05:39] Cathy: “What we noticed even as a result of COVID was that a lot of organizations were still sitting in their silos in addressing risk. And today that is just, it's not possible. You can't do that. It wasn't effective before, but it's even more ineffective now, mainly because of the interconnectedness of what's happening in business and the reliance on the supply chain.”

[07:07] Terry: “You got to break down the silos and get together when it comes to looking at risk. Because in a lot of cases, there are shared risks. If there's an earthquake, it's going to affect quality, it's going to affect supply chain, manufacturing, everything, right? So, you can really come together and build one cohesive plan in a lot of cases.”

[18:51] Cathy: “Embracing risk assessment and risk-based thinking in your business actually helps you be a better innovator than if you're just not looking at the risks at all.”

[19:22] Cathy: “We should be identifying risks and we should also be reviewing our plans on a frequent basis as well to make sure that we have viable plans to address when those risks are realized within the business.”

[19:37] Terry: “I think to proactively manage risk you need to be sitting down a few times a year because they change, right? A pandemic was not a risk on anybody's radar several years ago. So, keep looking at risk, doing it once a quarter if anything new bubbles up.”