Overview: To compete successfully in the global economy, enterprises across all industries are hard at work trying to manage inventory (supply chain flexibility and risk) and manage debt (effective cash management) in order to meet the growing expectations of customers / stakeholders.
To do this, most enterprises look at three (3) key areas of flow within Supply Chain Management;
• Product flow;
• Information flow; and
• Finance flow,
with the prime focuse on information technology to provide the tools and resources to identify the 5W's (Who, What, When, Where, Why) and the How - when it comes to identifying and addressing supply and demand.
While technology is an important component, it does not fully ensure against sustainable growth, risk mitigation and footprint expansion in a dynamic competitive shrinking world.
So the Question is - is there a simplified methodology which gets to the fundamental building blocks of an enterprise to enable it to look and identify the very characteristic of the enterprise's personality, its position in the market place, its competitors, its strengths and weakness ..... in short, the DNA of an enterprise.
What is Enterprise DNA?
Enterprise DNA is very much like people. After all, it is people that make up both sides of an enterprise. While the seller is traditionally a business, the buyer could be another business (B2B) and/or the general public (B2C).
As there is no two persons exactly the same, there are also no two businesses exactly the same.
However, there are groups. And it is within these groups that we are able to find parties of mutual interest ... wanting mutual outcomes ... that leads to repeat business > sustainable growth > footprint expansion.
What is Dynamic Supply Chain Alignment (DSCA)?
In Dynamic Supply Chain Alignment, the enterprise takes a holistic approached to aligning the strategies and the process to add value, minimise cost and to mitigate risk throughout the supply chain. The mindset also extends to incorporating the end-customers as part of the flow to identify risk, to create value, to enhance the relationship and to insure sustainable growth and footprint expansion.
What is Enterprise Risk Management (ERM)?
While Risk Management (RM) has the connotation of something negative, by definition Risk is simply a method to calculate the Frequency of a Consequence and its Probability (an Outcome).
if R = sum of F (CP) ... then, Risk (outcome) can equate to something;
• Positive / Likely; and/or
• Neutral / Moderate; and/or something
• Negative / Catastrophic (Threat minus Mitigation = Risk)
for the enterprise.
Enterprise Risk Management (ERM) is the Risk Management process that cuts right across the entire enterprise to provide a logical and evolving structure. It is a structure that links all the components within an enterprise in a compelling way to form an integrated whole.
Rating Risk on the bases of a level of risk (Standard: AS/NZS 4360:2004)
While the above colour cording is ideal for identifying and rating Supply Chain Risk and Operational Risk, a different colour cording will be required to identify, analyse, evaluate and rate risk across all other components within an enterprises - such as;• Strategic Risk;
• Marketing Risk;
• Financial Risk; and
• Compliance Risk ... to name a few.
When applied correctly, ERM has the ability to address critical business issues for the enterprise - such as risk culture, appetite, growth, return on investment / revenue, create value and provide a competitive advantage.
As such, Dynamic Supply Chain Alignment and Enterprise Risk Management co-exist in a symbiotic relationship to align the strategy, the processes, the people, the technology and the know-how to create value and to deliver What Customers Want.
(c) John C. Musster 2009 - All Rights Reserved
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John is a Registered Consultant at
UNSW Global Consulting / Expert Opinion Services
http://www.consulting.unsw.edu.au/
For more information, including an obligation free chat - please contact;
John C. Musster -- e: johnm@hermlogic.com -- p: +61 (0)416 721 242
John is available for Contract and/or Full-Time appointment.
