New for 2011: New insights and new risks

2011 provided me with a couple of new insights as to supply chain risk:

• I simply could not have leave out the impacts and aftermaths of the earthquake and tsunami in Japan.
• I included the risk definitions and risk matrix in this book on Security Risk Mangement, because I found them very illustrative.
• I expanded on the issue of risk and uncertainty in the three most common risk definitions.
• I thought it might be good to highlight supply chain deviations, disruptions and disasters versus supply chain disturbances and disruptions.
• I included a figure on how to reduce risks from this excellent German PhD on Risks in Low Cost Country Sourcing.
• Finally, as a teaser and “wake-up call”, since the lecture started at 8:15 in the morning I included a funny TV commercial from Norway, showing risk management in practice: assessing the current situation and visualizing all that can go wrong, deciding what to do and then realizing that you haven’t thought of everything after all:

The lecture slides

Reference

Husdal, J (2011) Supply Chain Risk – The dark side of supply chain management. Unpublished. Lecture notes, Molde University College, Molde, Norway.

Related

• husdal.com: Supply Chain Risk 2010

• husdal.com: Supply Chain Risk 2009
• husdal.com: Supply Chain Risk  2008

The lecture slides

New for 2010: New insights and new risks

2010 provided me with a couple of new insights as to supply chain risk:

• The impact of the volcanic ash cloud on air freight in April is something I could not have left out, let alone the bombs on US cargo planes in October.
• The classic demise of Ericsson as the once leading mobile phone company is underscored by including Hendricks and Singhal (2003) The effect of supply chain glitches on shareholder wealth.
• The issue of risk and uncertainty in Aven (2007) is briefly mentioned
• I aligned my risk definition as described in ISO 28002.
• I found place for Mitul Shah’s concept of calculating the Value-at-Risk
• Some references have been updated and revised, and I managed to slip in both my presentation at WCTR 2010 and at ISCRIM 2010.
• Finally I included two new videos, with Richard Wilding from the University of Cranfield. The first is perhaps not so supply chain risk related, but nonetheless an important reminder of how supply chain collaboration mitigates risks:

The second video focuses specifically on issues in supply chain risk and business continuity.

Reference

Husdal, J (2010) Supply Chain Risk – The dark side of supply chain management. Unpublished. Lecture notes, Molde University College, Molde, Norway.

Related

• husdal.com: Supply Chain Risk 2009
• husdal.com: Supply Chain Risk  2008

Home turf

The event is hosted by Loghborough University, which take me back to many familiar places, as I did my MSc in GIS on Transportation GIS at the University of Leicester, just a stone’s throw away from Loughborough. In fact, it’s even in the same “shire”, namely Leicestershire.

My paper

Of course I did not travel all this way with nothing in my bag. I do have a presentation to make. For those of you who have read my paper on Bad Locations, Bad Logistics? that I presented at the WCTR conference two months ago, this will be oddly familiar, as it is basically the same paper, but in a much more condensed version. Nonetheless, since all my public appearances go on my blog, here it is again:

iscrim2010

My presentation

For the record, this post is being published at the same time that I am scheduled to speak and present this:

Reference

Husdal, J (2010) Supply chain disruptions in sparse transportation networks – A Norwegian perspective. Proceedings of the 10th International Research Seminar on Supply Chain Risk Management, ISCRiM, edited by Samir Dani, Sep 6-7, Loughborough, UK.

ISCRiM 2010 Proceedings

Read the full proceedings and see all presentations here:

• husdal.com: ISCRiM 2010 Proceedings

ISCRiM

The ISCRiM is a network of academians interested in how to handle different types of risks in the supply chain. The main purpose of the ISCRIM-network is to speed up, and improve, the research within “Supply Chain Risk Management”. Founded in 2001, it has now grown to include 36 members in more than 20 countries. ISCRiM holds annual research seminars, open to members and invited speakers only, and publishes newsletters 2-3 times per year, highlighting the latest research,journal articles, books, PhD theses and other tidbits of interest to the supply chain risk research community.

More than just a supply chain

Supply chain management (SCM) often overlooks or neglects the mundane side of physical distribution and transportation, despite the fact that these activities form the backbone of SCM, says Peck (2006). The issue of supply chain disruptions is of particular importance in sparse transportation networks, because with only few transportation modes and/or links available between communities, these communities become extremely vulnerable to any disruption, since in a possible worst-case scenario no suitable alternative exists for deliveries to or from these communities. This makes supply chain disruptions in a sparse transportation networks different from disruptions a non-sparse network, since supply chains, here more than elsewhere, serve a purpose that extends beyond the immediate concerns of SCM.

Bad locations – Bad logistics

For those of you who cannot attend the WCTR, here is my presentation:

The full paper has been presented earlier, in my post on How Norwegian freight carriers handle supply chain disruptions.

WCTR 2010

This presentation will take place on July 13, 0945-1115 in session B1.1, room 0.07 at the WCTR conference.

Reference

Husdal, J. & Bråthen, S. (2010). How Norwegian freight carriers handle supply chain disruptions. Paper presented at the World Conference for Transportation Research 2010, Lisbon, Portugal, 11-15 July 2010.

Related

• husdal.com: How Norwegian freight carriers handle supply chain disruptions
• husdal.com: Supply chain disruptions in sparse transportation networks

Sparse transportation networks

Transportation is perhaps the staple ingredient in supply chains, as I wrote about a couple of weeks ago, and a thought-out transportation provision adds valuable flexibility to supply chains. The consequences and mitigation of supply chain disruptions in sparse transportation networks is the topic of a paper that I will present at the World Conference on Transport Research, WCTR, in Lisbon, Portugal, in July this year, and is based on a 2009 study from Norway, aimed at investigating how businesses and freight carriers located in sparse transportation networks are affected by and relate to supply chain disruptions. The study we conducted indicates that transportation-dependent businesses seek a vertical integration of a freight carrier into their supply chain, while freight carriers establish flexible solutions to meet the contingent needs of different businesses. The study also develops a new framework for the categorization of supply chains, and introduces the notion of the constrained supply chain.

Read online

Bad Locations Bad Logistics

Reference

Husdal, J. & Bråthen, S. (2010). How Norwegian freight carriers handle supply chain disruptions. Paper presented at the World Conference for Transportation Research 2010, Lisbon, Portugal, 11-15 July 2010.

WCTR

wctr2010.info: Offcial WCTR conference website

If you you would like to know more about the background for this study, e.g. the survey questionnaire, or if you are attending the WCTR and would like to link up with me, please get in touch.

Related

• husdal.com: Transportation – The staple ingredient in supply chains

Already outdated?

It is more than a year since I submitted my chapter for review, and had I written it today, it probably would have been a different chapter. Well, perhaps not “different”, but more “mature”, as I have gained additional insights  and done more research on risk and vulnerability in supply chains and networks. Many of the thoughts presented in the chapter, in particular the framework for distinguishing different compositions of virtual enterprise networks (see page 5 below) has been refined and used in other settings. Many ideas are still valid and I hope this book chapter will stand the test of time and be referenced by others than me in my own future writings.

Read online

Read at scribd.com: A Conceptual Framework for Risk and Vulnerability in Virtual Enterprise Networks

Reference

Ponis, S. (ed) (2010). Managing Risk in Virtual Enterprise Networks: Implementing Supply Chain Principles. Hershey, PA: IGI

Publisher link

• igi-global.com: Husdal, J. (2010) A Conceptual Framework for Risk and Vulnerability in Virtual Enterprise Networks. In: S Ponis (Ed.)(2010) Managing Risk in Virtual Enterprise Networks: Implementing Supply Chain Principles. Hershey: IGI.

Related

• husdal.com: Managing risk in virtual enterprise networks

The lecture slides

New for 2009: Videos

To make things a bit more intesting for the students who had to endure me for three hours, I also decided to  include some videos this time.

First, there is the same as last year BBC News about how piracy can lead to supply chain disruption, which is no less important this year.

Second, I included a a video where Christopher Tang speaks about robust strategies for mitigating supply chain disruptions.

Third, I added an excerpt from a talk by futurist Patrick Dixon on events he calls “Wildcards”; the latter is a video of a business consultant’s view of high-impact events:

Reference

Husdal, J (2009) Supply Chain Risk – The dark side of supply chain management. Unpublished. Lecture notes, Molde University College, Molde, Norway.

Related

• husdal.com: Supply Chain Risk  2008 (my guest lecture last year)
• husdal.com: Supply Chain Risk 2o10 (this year’s lecture)

A conceptual framework

The title of the paper is From Risks in Supply Chains to Risk in Virtual Enterprise Networks: Ideas, Concepts and a Framework.

Conceptual in its approach and drawing from other areas of research, this paper introduces four distinct groups of VENS, namely Constrained, Directed, Limited and Free VEN, and concludes that VEN risk management can and should learn from supply chain risk management. The abstract was accepted and I have now submitted my final paper. The final paper will be made available on this website after the conference.

The paper is largely based on my submission for a book chapter titled A Conceptual Framework for Risk and Vulnerability in Virtual Enterprise Networks for the book on Managing Risk in Virtual Enterprise Networks: Implementing Supply Chain Principles. The chapter has been accepted, pending some final revisions, and will hopefully be available in print by the end of this year or early in 2010. See my brief pre-review of Managing Risk in Virtual Enterprise networks.

Read online

Jan Husdal MITIP 2009

Links

• MITIP 2009: Conference website

Related

• husdal.com:
  Managing risks in virtual enterprise networks
• husdal.com:
  MITIP 2009 – a conference worth considering
• husdal.com:
  Call for papers – MITIP 2009

For my English readers:
This is an interview with me in a Norwegian trade journal for Logistics Management.
View the article. (in Norwegian only)

(ved Svein Bråthen, Jan Husdal og Jens Rekdal, Høgskolen i Molde og Møreforsking Molde)

Denne kronikken stod på trykk i Romsdals Budstikke 24.11.2008 og det er gjort mindre justeringer i teksten  for å tilpasse den til denne bloggen.

Vet vi nok om når og hvor rasene vil gå?

Statens vegvesen har laget egne rassikringsplaner, der de ulike rasutsatte strekningene er prioritert ut fra blant annet trafikkmengde, rasfrekvens, stengningsfrekvens og omkjøringsmulighet. Dette er et viktig utgangspunkt, men planene sier lite om verdien av trafikken som blir berørt og om det samfunnsøkonomiske tapet ved stengning i hvert enkelt tilfelle.

Vi vet ennå ikke nok om samfunnets kostnader

Fagmiljøet i Molde har utviklet en metode som er et steg på vegen for å beregne hvor mye samfunnet taper som følge av manglende rassikring. Denne modellen gir som vi skal se ennå ikke hele bildet, men den fanger opp endringer i kjørekostnader. Å unngå omkjøring er en viktig effekt av rassikring.

Modellen beregner det samfunnsøkonomiske tapet for trafikantene som forskjellen mellom de samlede kostnadene (kjørekostnader og tidskostnader) for alle reisene som gjennomføres når vegen er åpen og de samlede kostnadene for alle reisene som gjennomføres når omkjøring er nødvendig.

En analyse av 17 tilfeldig utvalgte raspunkter viser at omkjøringskostnadene varierer fra sted til sted, fra drøyt 200 kr/time og opp til 80000 kr/time, avhengig av trafikkmengde, trafikksammensetning og omkjøringsmuligheter. Det må derfor helt stedsspesifikke analyser til for kunne vurdere de faktiske ulempene ved manglende rassikring og for å vurdere nytteverdien av eventuelle investeringer.

Kan utrygghet måles i kroner og øre?

Det vi ikke har fanget opp, er opplevd utrygghet, materielle skader, personskader og dødsfall. Sammenlignet med alvorlige ulykker i trafikksterke deler av vegnettet er sannsynligheten for å bli utsatt for ras gjerne liten, men fra trafikantenes og lokalsamfunnenes ståsted er rasfare ofte vurdert som et betydelig faremoment som gir vesentlig bidrag til utrygghet. Opplevd utrygghet er derfor ofte brukt som et argument for å iverksette tiltak. Slike virkninger er imidlertid kompliserte å verdsette i kroner. Det pågår for tiden et forskningsarbeid som kan gjøre det mulig å verdsette slike effekter.

Hvor viktig er framkommelighet?

Når økonomien i vegprosjekter skal vurderes er tendensen at jo mer trafikk, desto større er den samfunnsøkonomiske nytten. Ut fra økonomiske kriterier alene vil trafikktunge prosjekter ofte bli prioritert fremfor trafikksvake prosjekter.

Spredt bosetting – spredt vegnett

Store deler av Norge har et spredt bosettingsmønster og et spredt utbygd transportnett, der det ofte finnes få alternative ruter eller veger å velge mellom dersom hovedåren stenges. Jo færre alternativer, desto viktigere blir det å opprettholde og sikre fremkommeligheten for å opprettholde produksjon og sikre velferd. Lokale forskjeller i verdi av gods som transporteres kan gjøre at trafikksvake vegstrekninger kan ha en større betydning enn det trafikkvolumet isolert sett skulle tilsi. Rassikring vil ofte tape i konkurransen om vegmidlene fordi ras går relativt sjelden, og fordi trafikkgrunnlaget på vegstrekningene ofte er lite. Gjennomsnittlig årsdøgntrafikk (ÅDT) for de raspunktene vi undersøkte var om lag 800 biler, omtrent det samme som gjennomsnittet for de fleste fjellovergangene i Sør-Norge. Til sammenligning har E39 i Molde en ÅDT på om lag 13 000 mens sambandet Molde – Vestnes har en ÅDT på  ca 1 800.

Helhet viktigere enn tunnelsyn

Rassikring er én viktig del av en større diskusjon om å bedre framkommeligheten, som også omfatter strekninger der det er dårlig vegstandard med lave skiltede hastigheter, værutsatte fjelloverganger, ulykkesutsatte strekninger, og steder med manglende ferjekapasitet. Valg av tiltak er til sjuende og sist et politisk spørsmål. Et ønske om å omfordele vegmidlene fra Østlandsområdet til distriktene er blant annet begrunnet med at mye av det eksportrettede næringslivet ligger langs kysten. Om denne argumentasjonen er fornuftig eller ikke skal ikke vi ta stilling til her, men god og oppdatert kunnskap om transportsystemers bidrag til verdiskaping og velferd er viktig for å kunne velge de riktige tiltakene, deriblant rassikring. Dette reiser betydelige faglige utfordringer, der forskningsmiljøet i Molde vil være aktive bidragsytere.

Referanse

Bråthen S.,  Husdal J., og Rekdal J. (2008). Er rassikring lønnsomt? Romsdals Budstikke, 24.11.2008, s.26.  Basert på Husdal, J., Bråthen, S. og Rekdal, J. (2008) Samfunnsøkonomisk verdi av rassikring. Noen beregninger knyttet til verdi av å unngå stengte veger. Rapport 0801, Møreforsking Molde AS

Relatert stoff

• tu.no – Endelig rassikringsløft
• husdal.com – Norwegian roads are dangerous