Supply Chain Risk Management Der Einkauf als wichtiger

Supply Chain Risk Management Der Einkauf als wichtiger Werttreiber The intelligent way to manage risk! BME-Regionalveranstaltung June, 12 th, 2018

MITIGATE IDENTIFY THREATS EVALUATE IMPACTS End-to-End Supply Chain Definition Supply Chain Risk Management Supplier Country Customer Own Site Location Supply Path Copyright riskmethods 2018 2

A perfect storm JIT/JIS, demand volatility Lean production, lower inventory buffers Regulatory requirements, norms & standards Copyright riskmethods 2018 Dependence on multi-tier supply networks Increased social awareness 3

Enterprises in the eye of the storm Supplier plant on fire: Peugeot SUV release delayed by 2 month Port worker strike: Mc. Donalds Japan lost 10% in revenue Flooding: Emerson Electric lost 23% profit Cracker explosion: Ethylene price increased by 18% Reputational incidents cause 2. 8% shareholder value loss on average Copyright riskmethods 2018 4

Supply risk challenges - mastered by technology OCEAN OF DATA NOISE CANCELLATION NOISE CANCELATION ADVANCED ANALYTICS REAL-TIME ANALYTICS 45. 000 Big Data FTEs required Artificial Intelligence 2. 500. 000 Decisions / Day Real-Time Analytics Makes the difference to read global top publications & Gain visibility updates 24/7* required to cancel out the noise from big data monitoring High velocity matches if a disruptive event causes revenue loss due to late crisis Create resilience detection 1 sec *45. 000 FTE´ s required to identify risk signals for 500 suppliers across global top online publications (300 k) Copyright riskmethods 2018 5

riskmethods solution converges digital forces Digitized supply chain networks Big data monitoring Noise canceling AI Analytics/automation Copyright riskmethods 2018 6

Comprehensive SCRM Real-time & latent risk monitoring to react and prevent Risk mitigation through streamlined collaboration Analytics Transform information to intelligence Alerts for immediate crisis response Analyze impact to focus on critical areas Optimize relevance & cancel noise Copyright riskmethods 2018 7

Leaders outperform legacy approaches Example: Financial Health Check PAST (what you have today) PRESENT (current events) FUTURE (early warning signals) Credit Rating CFO Departure Late Payroll Cash Flow Major product recall Family plans to sell Payment behavior Fined for $$$ Factory shutdown Traditional history-based Real/near-realtime insights Predictive signals ENABLES PREVENTION TO BE AHED OF RISK Copyright riskmethods 2018 8

Leaders leverage comprehensive risk scorecards Viability Financial Stability Innovation Potential Operational 27 Indicators Delivery Pandemic Outbreaks Disaster & Natural Hazards Infrastructure Political Market Wages Currency Changes 3 Indicators Flex Image & Compliance Labor, Health & Safety Environmental Information Security Regulatory & Legal Quality & Performance Quality Performance 4 Indicators Flex Risk Area Risks Flex Material availability 15 Indicators Disputes Flex 29 Indicators Actionable detail level § Earthquake § Volcano § River Flood § … Indicators Copyright riskmethods 2018 9

Leaders super-simplify complexity Predefined risk inventory and content provisioning integrated Visualize supply chain relations, cover n-tier relationships, identify hidden n-tier single sources Validate impact within seconds, collaborate with supplier Automated, geo-coded impact detection Receive relevant alerts only – no noise Copyright riskmethods 2018 10

Procurement priorities Prio 1: Cost reduction Prio 2: New products / market development Prio 3: Managing risks Source: Deloitte CPO Study 2018 Copyright riskmethods 2018 11

Where SCRM adds value to the enterprise Save the savings EARTHQUAKE FIRE STRIKE Negotiated fixed price with alternative before competition Imported 2 critical components the same day Immediately purchased several tons of brass Avoided $300 million turnover loss 259, 750 € in cost avoidance 20% in price increase avoided Copyright riskmethods 2018 12

Case study – 31 July, 2017

Case study – 31 July, 2017 • Within the same day we have taken the decision in the afternoon of importing 2 strategic products used for production and distribution. • On 1 August, 2017 at 3: 43 pm Shell has declared Force Majeure for mainly all products we do buy from them. The European market was hit immensely for the following 6 weeks with the supply on base chemicals.

/2 01 7/ 21 7 /2 01 7/ 22 7 /2 01 7/ 23 7 /2 01 7/ 24 7 /2 01 7/ 25 7 /2 01 7/ 26 7 /2 01 7/ 27 7 /2 01 7/ 28 7 /2 01 7/ 29 7 /2 01 7/ 30 7 /2 01 7/ 31 7 /2 01 7 8/ 1/ 20 17 8/ 2/ 20 17 8/ 3/ 20 17 8/ 4/ 20 17 8/ 5/ 20 17 8/ 6/ 20 17 8/ 7/ 20 17 7/ 20 Naphta in USD 470. 00 460. 00 450. 00 440. 00 430. 00 420. 00 410. 00 400. 00 390. 00

Case study – 31 July, 2017 • Seeing market prices on average in August – compared to our imports; we had the following advantage within our purchases taken: Product A Product B Import in EUR per mt 300 mt 350 mt Marketprice in EUR per Advantage in mt Total 1. 330, 00 1. 365, 00 1. 345, 00 1. 515, 00 1. 800, 00 55. 500, 00 45. 000, 00 159. 250, 00 259. 750, 00 Import pricing including shipment, tank rent, customs clearance.

Benefits across other tactical & strategic procurement processes $ Speed up your risk monitoring (if exiting) reduce crisis-impacts (cost avoidance) Fuel Supplier Mgmt. more holistic supplier evaluation feeds & improved supplier (pre)qualification Spend Analytics² adding risk and impact to improve demand bundling initiatives Copyright riskmethods 2018 Better Sourcing Decisions Rf. X processes powered by valuable risk insights 17

Closing words 18 “Was in dieser Welt einen guten Kaufmann auszeichnet, ist ein Vorsprung an Information und die Fähigkeit, diese zu nutzen. ” ― Jacob Fugger, 1485

Save The Date – Wir freuen uns auf Ihre Teilnahme! Copyright riskmethods 2018 19

Heiko Schwarz Managing Director, Co-Founder hs@riskmethods. net Thank you! +49 162 2651 000 Address Orleanstr. 4 81669 Munich Germany Contact +49 89 9901 648 -0 info@riskmethods. net Website riskmethods. net