Supply Chain Present

Copyright © 2012 BSI. All rights reserved.

Hidden Supply Chain Risk A Social, Quality, Environmental and Security Challenge

6/4/2015

Emmanuel HerveVice president Professional Services , BSI Asia Pacific

Copyright © 2012 BSI. All rights reserved. 2

Introduction to BSI Group

Hidden Supply Chain Risk

BSI Solutions to managing supply chain risk

AGENDA - Hidden Supply Chain Risk


Who is BSI?

6/4/2015

– By Royal Charter – focused on the development of standards, training and certification activities

designed to Improve performance, manage risk , reduce cost and enable sustainable growth

– Leading Global Standards Creation Body: British, European, ISO, Public and Private Standards

– Global Network: 70,000 clients in 150 countries

– Experienced: The world’s first National Standards Body established in 1901

– Thought Leaders: Founding member of ISO and shaped the world’s most adopted standards, incl. ISO

9001, 14001, 18001, Information Security, Business Continuity, Energy Management, FSCC 22000

– Trusted: We’re a Royal Charter Company, reinvesting profits back into our business to keep business

relevant – Improve performance, reduce cost, ensure sustainability.


BSI’s end-to-end solutions make excellence a habit

R i s k M a n a g e m e n t S t a n d a r d sS u s t a i n a b i l i t y S t a n d a r d sO p e r a t i o n a l P e r f o r m a n c e S t a n d a r d s

Together with >10,000 independent experts, BSI leads the development of global standards • Public Standards - PAS• British Standards - BS• European Standards - EN• International Standards -

ISO

Shape We share our standards and guidance documents in many formats, from paper to PDF or organization-wide licenses

• Online Standards Portal

• Network Licenses

Share Our tutors transfer the knowledge and skills needed to embed excellence

• In-Company Training

• Public Training

• Internal & Lead Auditor Training

• Self Assessment tools

• Gap Analysis

• Entropy Software™

Embed Our assessors give you proven ways to measure, improve and confidently promote your organization

• Management Systems Certification

• Gap Analysis

• Verification services

• Supplier certification

• 2nd Party Assessment

• Self Assessment tools

• Product Certification

• Kitemark & CE marking

AssessWe support you with the knowledge and business tools you need to continually improve

• Entropy Software™

• BSI Excellerator™ Report

• Supply Chain Solutions

• Six Sigma Training

• Business Improver Training

Support


A truly global brand and network – trusted and recognized

• Clients in 150 countries

• 61 offices worldwide

• 3 regional hubs in

UK, US and Hong Kong

• Global key account management

• Facilitating governance, risk & compliance

• Certifying and verifying global suppliers

• Stimulating international trade


Product Specification Standards

Over 100 years expertise shaping global standards to facilitate trade and improve business

• Beginning in 1901, initial Standards focused on product specifications to harmonize and facilitate commerce and reduce duplication

• Railroad gauges

• Steel specifications

• Construction standards

• Agricultural commodities

• Consumer and electrical products

• Personal safety equipment

• Medical devices

• Product Specification Standards remain relevant today driving interoperabilityand innovation in areas such as smart cities and regenerative medicine (e.g. stem cells)

• The next generation of standards focused on business processes to ensure consistent quality output

• BSI shaped the original standards for:

• Quality Management (ISO 9001)

• Information Security (ISO/IEC 27001)

• Environment Management (ISO 14001)

• Health & Safety (OHSAS 18000)

• IT Services Management (ISO/IEC 20000-1)

• Business Continuity (ISO 22301)

• Sustainable Events (ISO 20121)

• BSI’s new generation of Standards are centred around people behaviour andvalues to help organizations reach their full potential and protect their corporate reputation

• Key standards include:

• Anti-Bribery

• Corporate Social Responsibility

• Collaborative Business Relationships

Founded 1901 1950 2000

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Product Specification Standards Business Process Standards Business Potential Standards


New business behaviors standards

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Anti-bribery

Corporate Governance

Supply chain Resilience

Organizational Resilience

Brand valuation

Supply chain Risk

Management


Hidden supply chain risks

04/06/2015


Reputational Risk can damage brands

1. Reputational Risk is becoming important and a high profile boardroom issue2. Traditional definition of products quality are changing3. Global supply chains are becoming complex and we are loosing traceability4. Supplier traceability is critical – real factories, real machines, real people5. Supplier living profiles, on-site capacity & capability assessment will be key

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Your REPUTATION isyour

http://www.google.com/url?sa=i&rct=j&q=Brand+reputation&source=images&cd=&cad=rja&docid=RYLIHlWhlwtONM&tbnid=oDqvdePVrnND6M:&ved=0CAUQjRw&url=http://www.wizseoservicesaustralia.com/reputation-management-australia/&ei=7pi0Uf7wDMnlyAGx3IGIDg&psig=AFQjCNFn8MgBMZiYYCKwM2a72Qi7A2lx7g&ust=1370876494091409



Increasing Supply Chain Complexity

• The World’s Largest Shoemaker doesn’t actually make shoes, but only designs and sells

• The World’s Largest Personal Computer

Direct seller doesn’t manufacture its products but

assembles them from sourced components

• The World’s largest beverage manufacturer has

an outsourced manufacturing franchise model

The key message is that BRANDS MATTER and that the value of organizations is no longer just in the factory, people and process but rather the BRAND

http://www.google.com/url?sa=i&rct=j&q=complex+supply+chain&source=images&cd=&cad=rja&docid=ClSWEZw3bkpvOM&tbnid=bxkJy0mOB3UpKM:&ved=0CAUQjRw&url=http://www.piperreport.com/archives/2005_03.html&ei=U5K0UdTNB4nOyAGRtoHoAQ&psig=AFQjCNHlca9Eg22FrPBk-50mrx-MUsfHkg&ust=1370874830204284

http://www.google.com/url?sa=i&rct=j&q=complex+supply+chain&source=images&cd=&cad=rja&docid=ClSWEZw3bkpvOM&tbnid=bxkJy0mOB3UpKM:&ved=0CAUQjRw&url=http://www.piperreport.com/archives/2005_03.html&ei=U5K0UdTNB4nOyAGRtoHoAQ&psig=AFQjCNHlca9Eg22FrPBk-50mrx-MUsfHkg&ust=1370874830204284


Product Quality Security and customs Water resources & chemical waste

Workplace conditions and exploitation

Pollution Environmental damage

Bribery and corruption

Counterfeiting

Reputational risks


Your REPUTATION is

your

Executives say a strong corporate brand is just as important as strong product brand

company’s market value is attributable to its brand reputation

consumers avoid buying a product if they don’t like or trust the company behind the product

Source Weber Shandwick 2012The Company behind the Brand: In Reputation We Trust




CEO Stress Test? 1. How many suppliers do you have?

2. How many are direct vs. indirect?

3. Do you actively verify the living profiles of your suppliers?

4. Have you conducted risk assessments of all your suppliers?

5. How many have you physically visited?

a. What are the issues and where?

b. What improvements have you made?

6. Does your supply chain adhere to your corporate values?

7. Can you tell your supply chain story?

http://www.google.com/url?sa=i&rct=j&q=reputation&source=images&cd=&cad=rja&docid=jp76IwabdVoGfM&tbnid=WCy5GQQGaf-NzM:&ved=0CAUQjRw&url=http://www.forbes.com/sites/meghanbiro/2013/01/20/in-digital-we-trust-4-questions-to-keep-your-reputation-in-check/&ei=pZm0Ue-aCaPRyAGM4oDIDw&psig=AFQjCNEJtREuZPEZoU_0BCyskXFfuiQ5lQ&ust=1370876653446761

http://www.google.com/url?sa=i&rct=j&q=reputation&source=images&cd=&cad=rja&docid=jp76IwabdVoGfM&tbnid=WCy5GQQGaf-NzM:&ved=0CAUQjRw&url=http://www.forbes.com/sites/meghanbiro/2013/01/20/in-digital-we-trust-4-questions-to-keep-your-reputation-in-check/&ei=pZm0Ue-aCaPRyAGM4oDIDw&psig=AFQjCNEJtREuZPEZoU_0BCyskXFfuiQ5lQ&ust=1370876653446761


What Does Good Look Like?

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1. Ensures Corporate values are aligned with Supply Chain, R & D, Procurement, Risk and Compliance. Avoid opposing forces.

2. Keep an active database of living and approved supplier profiles

3. Conducts supplier risk assessments relating to product type, country, private label , critical items, economic or reputational risk issues

4. Categorizes suppliers into risk profiles – Country, Product, Process, Value etc

5. Allocate your resources, activities to areas of greatest risk

6. Conducts on-site validation of critical or higher risk suppliers to verify profiles and measure if they adhere to corporate values

7. Measures, monitors and improves the performance of suppliers and supports those that adhere to corporate values

Copyright © 2012 BSI. All rights reserved. 156/4/2015

BSI Supply Chain Solution concept

Assist organization to tell there supply chain story

Help CEO sleep at night!

Allocate funds in the area of greater need

Identify supply chain risks


SCREEN in an online secured platform containing the most complete, real-time country supply chain risk analysis data providing living country heat maps covering:

• CSR risks

• BCM Risk

• Environmental Risks

• Security Risk

• Food risk (soon)

Identify Country Risks


SCREEN Features

SCREEN is a secure, web-based intelligence platform that provides:

• Spotlight News

• Proprietary Risk Ratings and Maps

• Incident and Country Data and Analysis

• Customizable Country Risk Reports

• BSI Authored Analysis Reports

• Automated Incident Notifications

• Search Capabilities


SCREEN Intelligence

A dedicated team of analysts is constantly monitoring and analyzing a variety of geographic risk and incident data to produce threat ratings for:

• 22 risk indicators

• 203 countries.

Sources are:

• Over 70.000 onsite audit assessment done by BSI (PG system)

• Dedicated intelligence resources wide decades of experience

• In country personnel (100 counties)

• Foreign media (200+ countries)

• Trade association

• NGO

• Government sources (Homeland security)

• Other government sources


SCREEN

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Potential threat intelligence Country risk assessment


Fully automated Audit solution platform enabling you to:

1. House your supplier profiles,

2. Manage Supplier Self Assessment

3. Check year on year progress on compliance

4. Manage Onsite Supplier Qualification and Verification programs:

– Onboarding,

– scheduling,

– Reporting, CAPA

– Benchmarking

– Status reporting

Identify & Manage Supplier Traceability and Risk


Features

SCM’s features include:

– Dashboard Views of Supplier Risk and Compliance KPI’s

– Interactive Supplier Risk Maps

– Assessment Reports Post Assessment Risk Builder

– Custom risk evaluation

– Custom Assessment Builder and Corrective Actions

– Customizable Email Functionality

– Document Management

– Multi-Assessment Method Management

60.00

30.00

10.00


On-site verifications based on Client specific or BSI specific standards or checklist

1. Pre-qualification audits (PAS 7000)

2. Social compliance audit (e.g. SA 8000, BSCI, SEDEX, EICC and other client specific programs)

3. Environmental audit (Energy, Hazardous chemicals, Water, Air, Waste Management)

4. Food audits (ISO 22000, HACCP, BRC, SQF, GMP)

5. Quality Audit

6. Security (C-TPAT) audit

7. Bespoke customer audits

On Site Supplier Qualification or Verification


1. Onsite audits by experienced auditors

2. Consideration of local laws and customs

3. Performed in local language

4. Identify issues for improvement

5. Comprehensive reports

6. Hosted in secured Supplier Compliance Manager (SCM)

– Uniformed/Comparable Reporting

– Comments and Attachments

– Corrective Actions definition

BSI Verification features


Country risk Supplier risk

Identify & Manage Supplier Risk

Onsite verification Supplier risk


Save resources / budget

Financial spend

Organize your supplier by risk profile

Keep an active database of living and approved

supplier profiles

Measures, monitors and improves supplier

performance

Keep track of key country risksWhy use BSI supply chain solution?

On-site validation of higher risk suppliersSLEEP BETTER!!

Allocate budget to areas of greatest risk


BSI Supply Chain Solutions - Clients

http://upload.wikimedia.org/wikipedia/commons/5/51/IBM_logo.svg

http://upload.wikimedia.org/wikipedia/commons/5/51/IBM_logo.svg

http://images.google.com/imgres?imgurl=http://stafstan.com/cms/gallery/images/jti2.gif&imgrefurl=http://www.stafstan.com/eng/about.php&usg=__iEBVotcYEfcb5F2wvBQV4a4_cDI=&h=150&w=200&sz=3&hl=en&start=8&um=1&tbnid=UxKavG33pGwBNM:&tbnh=78&tbnw=104&prev=/images?q=jti&um=1&hl=en&safe=off&rls=GGLG,GGLG:2006-25,GGLG:en

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http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=images&cd=&cad=rja&ved=0CAQQjRw&url=http://asklogo.com/show/detail/R/rei-logo&ei=vvcDU9-bEOjW0QHYv4CoCg&usg=AFQjCNF8Fazy1Ebqtf3OBHNLBVK3awz8Qg

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=images&cd=&cad=rja&ved=0CAQQjRw&url=http://asklogo.com/show/detail/R/rei-logo&ei=vvcDU9-bEOjW0QHYv4CoCg&usg=AFQjCNF8Fazy1Ebqtf3OBHNLBVK3awz8Qg


BSI VerifEye – 2° party audit customers

• SCAN

• Fedex

• Estee Lauder

• Canadian Tire

• Rx360

• Promod

• Nike

• WoolWorths

• Domino’s Pizza

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Supplier Pre-qualification: a specific issue

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1. Enormous complexity around pre-qualification

2. Multiple programs - non consensus in the Industry

3. Supplier audited multiple times – audit fatigue

4. Up to 3-4 month to validate new suppliers

5. Tension between procurement and compliance

6. No trusted repository of verified suppliers

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Why did BSI look at Supplier pre-qualification

Pre-qualification

CSR

Business governance

Organisation profile

Data Protection

Business ethics

Health and Safety

Quality

Environment

Security


PAS 7000: Supplier Pre-Qualification

1. PAS 7000 helps organization Mitigate hidden Supply chain risk

• Who are they?

• Where are they?

• Can they be trusted?

2. Agreed terminology of what good looks like for (GRC)

3. Flexibility to tailor to the specific requirements of the buyer

4. Engage and calibrate Boards/Company values between Compliance, Risk and Procurement

5. Reduce audit fatigue and duplicate efforts

6. Enable greater transparency & traceability needed to better manage reputational risk


The PAS 7000 steering group 31

Steering group composed of over 40 organizations based in US, Europe and Asia

Review panel composed of over 200 organizations based in US, Europe and Asia


PAS 7000 Elements

Core Modules

1. Organizational Profile

2. Supplier Capabilities and Capacities

3. Financial Information and Insurance

4. Business Governance

5. Employment policies

6. Health and Safety

7. Data protection

8. Environmental Management

9. Quality Management

Additional Modules

1. Business Ethics

2. Supply Chain Traceability

3. Supply Chain Security

4. Equal Opportunity and Freedom of Association

5. Disciplinary Practice and Abuse

6. Business Continuity Management


What does a ‘Buyer’ think?

“Our customers want to know they are working with a organizationthat values integrity above everything else. Many of those values arecovered within PAS 7000, such as governance, employmentpolicy, quality, security, environment and health and safetymanagement.”

“So PAS 7000 presents a clear and comprehensive structure for asolid business continuity plan. I can certainly see the commercialbenefit in it in terms of confidence and time required to translate thatto the customer. Once you have it, no further discussion is requiredand the conversation can move on to adding value through productsand services.”

Joseph Fay, MCQI CQP, EMEA & LAM Supply Chain Leader – CMS, at GE Power & Water


PAS 7000 Pilot Audit with a UK Client ‘JCB’

• JCB is a Construction Machinery manufacturer

• JCB to identify new and/or key legacy supplier sites

• BSI to execute audits in India and China

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JCB_PAS 7000 Pilot Audit – Factory Performance Vs Country & Global Average

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INDIA - CountryAverage

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ABC Factory


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JCB_PAS 7000 Pilot Audit - Global Average

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Supply Chain Present

Business

Transcript of Supply Chain Present