The well-known and widely used 3 Lines of Defense model was developed for institutional risk management in finance. Despite years of criticism, too many risk professionals still treat it as the holy grail and believe they can use it across organizations for all kinds of risk management activities.

My experience: For SCRM, the model is not usable at all. However, even the big four consulting firms still bother their clients with this ineffective approach. Experienced supply chain (risk) experts never work with it. So do I, and based on 18 years of building SCRM systems across 15 companies, I developed and use a dynamic five-level risk model that translates the lines-of-defense principle into something that actually works in practice:

Level 1: SCRM Culture Framework: The foundation everything else rests on. If the culture doesn’t support early flagging, transparency, speaking up, and cross-functional accountability, no process or system will compensate. Culture is not soft. It is the prerequisite.

Level 2: Governance & Competency Framework: Strategy, roles, responsibilities, and the skills to execute them. Here, the CPO and procurement leadership define what SCRM means for the organization and how they operationalize it. And this is where the organization becomes agile and responsive.

Level 3: Category & Supplier Portfolio/Network Management: The analytical core: category and market analysis, supplier portfolio assessment, and a risk-centered sourcing strategy. This is where procurement teams actively manage exposure.

Level 4: Core Process Framework: SCRM embedded into daily procurement operations: supplier qualification and onboarding, sourcing and re-sourcing decisions, and ongoing supplier network management

Level 5: Technology Framework: Digital supply chain monitoring running 24 hours a day, 365 days a year. AI-supported signal detection, automated alerts, pattern recognition, scenario modeling, impact analytics. Technology does not replace human judgment.

The critical principle behind this model: These five levels are not silos. Insights from the process level feed back into portfolio strategy. The technology layer supports all operational levels simultaneously. The culture layer at the top is why it all works under pressure. SCRM is never static. The moment you treat SCRM as a project, you have already fallen behind. Forever!

Now, let’s turn those lessons into capability. Build people and organizations who are ready to act. My training/workshop will perfectly prepare you for it. Hi. I am Jan, your SCRM Builder. Not a consultant who theorizes about risk. A procurement leader and risk practitioner who has built 15 SCRM programs globally, trained 1,200 people, and led procurement and risk organizations through crisis. I share what works and help you build an effective SCRM. I work globally.

The post Multi-Layer-Defense Risk Management appeared first on targetP.

Next episode: Supply Chain Risk Management done right!

Many companies treat SCRM as an isolated project. They create registers, assess suppliers, and define mitigation plans. But: one critical perspective is often missing: THE CUSTOMER! Effective SCRM must be CUSTOMER-CENTRIC. That perspective works on two levels, and both determine whether it creates value or burns budget!

SCRM aligned with the customer

The ultimate purpose of managing risk is to protect the customer promise. Your customer does not buy your heatmap; he buys certainty. Certainty about delivery, quality, and integrity. And certainty that when something does go wrong, they hear it from you first. That’s why reliability, availability, and the ability to respond to changing customer expectations need to be at the heart of SCRM.

A risk only becomes truly relevant when we understand its potential impact on the customer. What happens to customer experience if a critical component is unavailable? What is the financial impact? And how much resilience is actually required to protect them?

This is where SCRM becomes a business capability. So the honest test for any SCRM setup is simple. Does it protect what the customer actually values? If your risk dashboard cannot be translated into those four things, it is an internal hobby.

Customer-centricity in the Supply Chain

SCRM cannot operate in isolation. All internal stakeholders have different needs and risk perspectives. The interaction across the entire value chain is the real success factor. Suppliers are not the object of the exercise; they are part of it. A supplier who understands why you ask for capacity data, and who gets something back for sharing it, will tell you about a problem weeks earlier.  Sales needs to know what it can promise. Production planning needs to know which components deserve a buffer. Finance needs to know which exposure is worth insuring. The board needs a view it can act on rather than a heat map in fifty shades of orange.

Your opportunity: Supply chain resilience can be monetized.

The cost of resilience can be linked to customer retention, revenue protection, service levels, and market opportunities. Risk insights can become part of Sales and Marketing strategies. It is about protecting the customer promise, enabling the business, and creating trust across the entire value chain. That makes risk management a competitive advantage in the good years and a life insurance policy in the bad ones.

Now, let’s turn those lessons into capability. Build people who are ready to act. Make SCRM work when it matters.

Hi. I am Jan, your SCRM Builder. Not a consultant who theorizes about risk. A procurement leader & risk practitioner who has built 15 SCRM programs globally, trained 1,200 people, and led procurement and risk organizations through crisis. I share what works and help you build an effective SCRM. I work globally.

The post Customer Centric Supply Chain Risk Management appeared first on targetP.

A cyberattack doesn’t ask whether you are a DAX corporation or a 12-person family business. A key supplier insolvency doesn’t care whether you are privately owned, government-owned, or publicly listed. A flooded port, a sanctioned trade route: none of it checks your balance sheet first.

SUPPLY CHAIN RISK IS AGNOSTIC

It applies to multinational corporates with risk departments. It applies to the SME with one overworked person doing purchasing, finance, and risk at the same time. It applies to municipal utilities, hospitals, NGOs. None of these organizations are exempt simply because of their size, ownership structure, or sector. What differs is not whether risk will arrive.

What differs is whether anyone is prepared. Risk is not asking whether you are in metal forming or pharmaceutical. It is not asking if you are a small or medium enterprise. I have worked inside large corporates with mature SCRM functions, and I have advised smaller, privately owned businesses with no formal risk process at all. The companies that struggled most were not always the smallest or the least sophisticated. They were the ones who quietly believed disruption happened only to other organizations.

It never is!!!

At the end of all the frameworks, governance models and digital monitoring tools, there is one plain truth that applies equally to all:

This is about staying in business.

About remaining solvent.

About continuing to provide work, income and stability to the people who depend on the organization, whatever its size or legal form.

Whether you are an SME or a global corporation makes no difference. Preparation and investment are required either way; a big budget proves nothing about effectiveness, and there is no excuse for inaction or for hiding behind the excuse that this is only for „the big ones.”

Preparedness is not a luxury reserved for those who can afford a risk department.

It is a basic act of responsibility toward your employees, your shareholders, your customers and, ultimately, yourself. If you run an organization of any kind, the question is not whether risk will find you. The question is whether you will be ready when it does.

I am Jan, your SCRM Builder. Not a consultant who theorizes about risk. A procurement leader & risk practitioner who has built 15 SCRM programs globally, trained 1,200+ people, and led procurement and risk organizations through crisis. I share what works and help you build an effective SCRM. I work and train globally

The post SUPPLY CHAIN RISK IS AGNOSTIC appeared first on targetP.

Die Sicherstellung stabiler Lieferketten ist zur Kernaufgabe des Einkaufs geworden. Aber sind die Lieferketten damit wirklich transparent und haben wir unsere Verantwortung für Mensch, Umwelt und faire Lieferbeziehungen damit wahrgenommen?

Wir denken nicht! Kunden und immer mehr Gesetze fordern diese Verantwortung für integre Lieferketten ein. Ein „einfaches“ Supply Chain Risikomanagement wird dieser Verantwortung und den umfassenden Risiken für Unternehmen, Reputation und den Menschen nicht gerecht.

In unserem Webinar: Warum reicht das klassische Risikomanagement nicht mehr aus um Wettbewerbsfähig zu bleiben,

𝗗𝗮𝘁𝘂𝗺: 17.10.2024
𝗨𝗵𝗿: 11:00 – 12:00 Uhr,

zeigen wir, wie Unternehmen durch den Aufbau 𝘀𝘁𝗮𝗯𝗶𝗹𝗲𝗿 𝘂𝗻𝗱 𝗶𝗻𝘁𝗲𝗴𝗿𝗲𝗿 𝗟𝗶𝗲𝗳𝗲𝗿𝗸𝗲𝘁𝘁𝗲𝗻 nicht nur Risiken minimieren, Verantwortung für Ihre Lieferkette übernehmen und Gesetze einhalten, sondern auch ihre Wettbewerbsfähigkeit erhöhen können.

Link zur Anmeldung in den Kommentaren

𝗞𝗲𝘆 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:

Warum Risikomanagement heute umfassender betrachtet werden muss als nur klassisches SCRM und die Wichtigkeit regulatorische Anforderungen beinhal

Wir schauen uns an, was es braucht, um ein umfassendes Lieferantenmanagement zu etablieren, das in ein ganzheitliches Lieferantenmanagement eingebettet ist

Was sind die wichtigen Bausteine und Erfolgsfaktoren?

Was wird sonst noch in Bezug auf Lieferketten (Gesetze, Kundenerwartungen etc.) benötigt?

Wie wie lässt es sich sinnvoll kombinieren um Kosten, Arbeitsbelastung zu reduzieren?

Erfahren Sie, wie Cloud-Technologie auf Basis von SAP- und Stratesys ORION-Plattformen digitale Transformationsprozesse auf eine Weise revolutioniert, die auf eine vollständige Zusammenarbeit mit Ihrem Lieferantennetzwerk und die agile Einführung neuer Prozesse ausgerichtet ist, um Transparenz und Kontrolle über Ihre gesamte Lieferkette zu schaffen

Wir freuen uns auf Ihre Teilnahme.

The post ⚡Risikomanagement umfassender betrachten. Lieferkette – Mensch – Umwelt appeared first on targetP.

Port Technology International & Russel Group:

$1.25 trillion – the economic loss caused by disruption in two of the world’s largest shipping routes, the Red Sea and Panama Canal

Blockages at two of the world’s largest shipping routes have thrown shipping schedules and global supply chains in disarray, as vessels are opting for longer alternative routes adding to delays and increasing costs.

Red Sea: Trade analysis from October 2023 through to May 2024, shows that the commodities most impacted are crude oil, plastic materials, telephone equipment, cars, and clothing.

Panama Canal: Russell’s analysis throughout 2023, highlights the commodities most impacted are LPG, crude oil, cars and people carriers.

Clearly, it highlights the potential ripple effect of any disruption within a key transit route, which plays a vital role in moving goods across the world.

What to expect:

Geopolitical tensions will remain high, there are no signs of ending – the opposite

Maritime supply chain disruptions will continue to impact ports with higher levels of congestion and delays and container availability

Companies increase their stocking levels with plans to order much earlier (risk of #bullwhipeffect)

Time to increase your overall risk & resilience program.

Source Content & Graphic: Port Technology International, September 12th, 2024

The post Red Sea & Panama Canal disruptions: $1.25 trillion economic loss appeared first on targetP.

The 5th Agritech Summit opened its doors yesterday. Under the patronage of the two founders Hajo Drees and Josip Tomasevic, key players of the Agritech industry are meeting again in Augsburg, OEMs as well as global suppliers and SMEs.

The event was opened by the Bavarian Vice Minister Tobias Gotthardt, who welcomed the guests on behalf of Bavarian Prime Minister Dr. Markus Söder. Shortly after Mr. Gotthardt, I had the great pleasure of contributing a keynote speech on:

“The Power of Collaboration Drives Supply Chain Stability & Integrity. Turn Uncertainty and Responsibility into a Competitive Advantage.“

At a summit where technology, innovation, business models, sustainability, and digitalization are discussed, the topic of Supply Chain Stability and Integrity should not be missing. Only the interaction of all these dimensions ensures robust deliveries and ensures sustainable economic success.

One of my key messages was: In a time of countless crises and risks, new laws, and increasing customer expectations concerning sustainable, risk-optimized operations, intensifying cross-organizational cooperation is substantial for every business, but also for the entire industry. Help each other to create industry standards, jointly monitor supply chains and suppliers, identify threats, and build an AGTECH ecosystem that addresses the risks and challenges of the future across organizations.

I pointed out what leadership teams should do:
Foster a risk culture and awareness of supply chain integrity with Humans and the environment in mind
Engage people, teams, and functions and make robust supply chains a corporate effort
Establish a comprehensive organizational integration, don’t just put task forces in place
Go digital and use effective supply chain tech; combine human skills with digital skills
Break boundaries and collaborate even with competitors
Stop working in silos and use all channels to exchange, support and share intelligence

Thanks for the many new contacts and conversations and a high THANK YOU to Hajo and Josip for the invitation and the fantastic event. Looking forward to Day 2.

The post Collaboration Drives Supply Chain Stability & Integrity appeared first on targetP.

Supplier quality management (SQM) stands as the cornerstone of operational excellence for businesses across industries. It encompasses the processes and systems necessary to ensure that the products and services delivered by suppliers meet the required standards and specifications.

The significance of SQM cannot be overstated, as it directly impacts product quality, customer satisfaction, and the overall reputation of a company.

First and foremost, effective SQM

mitigates the risks associated with poor-quality materials or components entering the production process. By implementing stringent quality control measures, businesses can proactively identify and address issues before they escalate, thereby safeguarding their brand image and customer trust.

Moreover, SQM fosters long-term partnerships with suppliers based on mutual trust and collaboration. By setting clear quality expectations and providing feedback on performance, companies can work hand in hand with suppliers to continuously improve processes and drive innovation. This collaborative approach not only enhances product quality but also promotes efficiency and cost-effectiveness throughout the supply chain.

Several tools and methodologies are instrumental in achieving effective SQM:

Supplier audits enable companies to evaluate supplier capabilities, assess compliance with quality standards, and identify areas for improvement.

Quality scorecards provide a structured framework for tracking supplier performance over time, allowing for data-driven decision-making and performance benchmarking.

A robust supplier qualification process ensures that only reputable and reliable suppliers are onboarded, reducing the likelihood of quality issues down the line.

Advanced technologies such as AI and data analytics can be leveraged to analyze vast amounts of supplier data in real-time, enabling proactive identification of quality trends and predictive maintenance of supplier relationships.

In conclusion, supplier quality management is not merely a reactive measure to address quality issues; it is a proactive strategy that drives continuous improvement, fosters collaboration, and enhances competitiveness in today’s dynamic business landscape.

By prioritizing SQM, businesses can optimize their supply chain operations, deliver superior products and services, and ultimately, achieve sustained success in the marketplace.

targetP brings vast experience in establishing and stabilizing supplier relationships and robust supply chains. Talk to practitioners with 80+ years of Supplier Management expertise.

The post Improve Performance & Risk Exposure with Supplier Quality Management appeared first on targetP.

So geht ein effizientes Lieferantenmanagement und ESG-Compliance. Ein Praxis- und Umsetzungsbericht aus dem Mittelstand.

Aktuelle Lieferkettengesetze wie das LkSG oder die CSDDD stellen international agierende Unternehmen oft vor zahlreiche Herausforderungen.

Auch das familiengeführte Hochtechnologieunternehmen ORAFOL aus Oranienburg, Weltmarktführer in der Kunststoffveredelung, nutzt die gesetzlichen Anforderungen als Chance zur Weiterentwicklung und Professionalisierung seines Einkaufs (z.B Supplier (Relationship) Management) und seiner digitalen Architektur und Systeme im Einkauf und den Schnittstellenbereichen.

Unser Kunde ORAFOL ist ein tolles Beispiel, wie man auch im Mittelstand budgetfreundlich und zügig leistungsfähige digitale Landschaften umsetzen kann. Verantwortung für die eigene Lieferkette übernimmt, ie Vielzahl der aktuellen und kommenden Gesetze umsetzt und parallel den Einkauf digital und (!) analog nach vorne bringt

Was stellten wir vor:

Von der Pflicht zur Kür: Warum ORAFOL von Excel zu vernetzten SaaS-Lösungen gewechselt hat und wie das Technologieunternehmen dadurch ESG-Anforderungen effizienter erfüllen konnte.

Single Source of Truth durch Standard-API: Wie ein zentrales Lieferanten-Management-System abteilungsübergreifende Nutzung und Transparenz ermöglicht.

Auswirkungen auf Richtlinien, Einkaufs- und Warengruppenstrategien sowie das Lieferanten-Onboarding.

Compliance und Risikomanagement: Wie vernetzte Systeme zu einem effektiven Compliance-Verbund werden und das Risiko über die gesamte Lieferkette hinweg minimieren helfen.

Lessons Learned: Erkenntnisse aus der Projektumsetzung, inklusive der Zusammenarbeit mit Anbietern, der Sicherstellung zukunftssicherer Systeme und der Bewältigung interner Stolpersteine.

Sprechen Sie mich gerne für Ihren persönlichen Impuls an. Oder auch für eine Zusammenfassung des Webinars. Auf Basis von mehr als 30 digitalen Projekten zur Weiterenwicklung von Einkaufsorganisationen zeigen wir auch Ihnen Ihre Optionen und persönliche Roadmap auf!

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