Identifying the Factors for Successfully Managing Supply Chain Risks

The world economic crisis has changed the risks between suppliers and customers. At two expert events in the USA in November 2009, Michael Vitek, Vice President MBtech North America, explains which modern tools and methods can be utilized to proactively analyze and mitigate risk throughout the entire Supply Chain.

On the 10th November Michael Vitek, together with Dr. Sime (Shema) Curkovic, Professor of Supply Chain Management at Western Michigan University (WMU) provide a keynote speech addressing “Supply Chain Risk Management” at an “APICS Michiana” (Association for Operations Management) event at the St. Mary’s Student Center in Notre Dame, Indiana. On 18th November Michael Vitek presents this topic and the competencies of MBtech’s consulting segment in Supply Chain risk management at the “Transatlantic Logistics Conference” in Atlanta, Georgia, an event organized by the German American Chambers of Commerce (GACC South).

Currently, companies worldwide are primarily operating reactively when identifying risks in their Supply Chain. Existing Supply Chain Risk Management evaluation tools and techniques utilize “lagging” financial indicators (e.g. sales, cost trends, profit margin, sales growth, etc.). Traditional cost reduction measures in procurement such as terminating contracts or postponing payments to suppliers serve to further increase and reinforce the possible sources of risk along the Supply Chain. In order to be able to recognize, proactively analyze and evaluate these potential risks and their effects on the entire Supply Chain in advance, MBtech employs the Supply Chain FMEA Method (Failure Mode and Effects Analysis) for its customers. The method was developed jointly by MBtech and WMU. This “early warning system” avoids extremely costly monitoring and follow-up measures, provides companies with the ability to better allocate the resources to the hot spots in the Supply Chain thus contributing to safeguarding companies’ competitiveness.

The results of a survey carried out by MBtech North America and the WMU form the second part of Michael Vitek’s presentation. In total, more than 50 plant directors, procurement and supplier managers from companies in a variety of different industrial sectors were surveyed with regard to risks and failure modes. One of the key messages is that Supply Managers must consider the severity of failure, the likelihood of occurrence, and the company’s ability to detect failures, when making decisions about managing risk.

Companies interested in participating in next year’s survey and obtaining access to the study results or that would like to develop a company specific Supply Chain Risk Assessment, may contact info@mbtech-group-na.com for more information.

About the MBtech Group

The MBtech Group is a globally active, internationally leading automotive engineering and consulting company in Europe, North America and Asia. MBtech offers comprehensive, integrated expertise along the product creation process and the product life cycle. The brand MBtech covers all products and services in four segments: MBtech vehicle engineering, MBtech powertrain solutions, MBtech electronics solutions and MBtech consulting. MBtech develops, integrates and tests components, systems, modules and vehicles. We focus on customer-oriented services consisting of a combination of engineering, consulting, operations and qualification. Flexible, inter-disciplinary project teams work in close collaboration with our customers, suppliers and cooperation partners. In 2008 the MBtech Group achieved a worldwide turnover of US$ 530 million with approximately 2,700 employees.