Adapt to Survive Supply

Chain Disruptions – Part 2

Mark Morley, Industry Marketing Director

Slide 2 | © 2013 GXS, Inc.

Implement Operational Changes

• Near Shoring

• Establish a ‘Global Plant Floor’

• Shift Production to New Locations

• Map Out Supply Chains/Networks

• Introduce Dual Sourcing Strategies

• Implement Control Towers/Crisis

Management Centres

• Appoint a Business Continuity

Manager

Slide 3 | © 2013 GXS, Inc.

Near Shoring

• Started to appear in 2009

• Initially introduced to help

shorten logistics networks

• Recent natural disasters are

encouraging more companies

to move production or sourcing

nearer to home markets

Slide 4 | © 2013 GXS, Inc.

Caterpillar Moves Production Back to North America

Slide 4 | © 2013 GXS, Inc.

Slide 5 | © 2013 GXS, Inc.

Establish a ‘Global Plant Floor’

• Some manufacturers have been

quick to establish alternative

production locations

• These new locations help to

spread the risk so that if one

plant goes offline, production

can continue at an alternative

location

Slide 6 | © 2013 GXS, Inc.

Honda Moves Design and Production of NSX Supercar to North America

Slide 6 | © 2013 GXS, Inc.

Slide 7 | © 2013 GXS, Inc.

Shifting Production to a New Location

• Following the Japanese

Earthquake, other countries

started to encourage companies

to relocate research/production

• Many governments saw this as a

good opportunity to encourage

inward investment

• Significant investment in new

infrastructure/technology parks

Slide 8 | © 2013 GXS, Inc.

Taiwan Emerges As Alternative Location for Japanese Manufacturers

Slide 8 | © 2013 GXS, Inc.

Slide 9 | © 2013 GXS, Inc.

Mapping Out Supply Chains

• Many manufacturers have

started to map out their entire

supply chains

• Helps to locate weaknesses in

the supply chain and identify

key suppliers

• Once mapped out, contact info

and supply chain relationships

need to be maintained

Slide 10 | © 2013 GXS, Inc.

Researcher Spends 3 Years Mapping Out Suppliers For Centre Console

Slide 10 | © 2013 GXS, Inc.

Slide 11 | © 2013 GXS, Inc.

Dual Sourcing Strategies

• Disruption across supply chains

has led to alternative suppliers

needing to be identified quickly

• Identifying alternative source of

components/parts helps to

minimise production disruption

• Manufacturers are also likely to

start increasing buffer stocks

Slide 12 | © 2013 GXS, Inc.

Implementing Control Towers/Crisis Management Centres

• Many manufacturing companies

have implemented control

towers to monitor end-to-end

visibility of global shipments

• Recent natural disasters have

led to control towers doubling

up as crisis management

centres

Slide 13 | © 2013 GXS, Inc.

Appoint a Business Continuity Manager

• Increasing demand for Business

Continuity Managers

– Also known as ‘Masters of Disaster’ !

• Central point of contact during a period

of disruption

• Increased regulatory compliance

requires more thorough business

continuity plans

• Being unprepared is ‘bad for business’

Slide 14 | © 2013 GXS, Inc.

How to Minimise Supply Chain Risk

• Improve management of contact

information

• Increase day to day interaction and

collaboration with suppliers

• Understand the structure of your supply

chain

• Review mass communication procedures

• Introduce crisis management processNear Shoring, Global Plant Floor,

Shift Production, Map Supply Chains,

Dual Sourcing, Control Towers,

Business Continuity Management

Slide 15 | © 2013 GXS, Inc.

Thank You

Phones

US: 1-800-334-2255, option 3

EMEA: +44 (0) 1932 776047

GXS web sites

US: www.gxs.com

EMEA: www.gxs.eu