What was said at Sapics

Risk mitigation, student presentations and a whole lot of laughs … This isn’t a classroom gone wrong, but the makings of one wonderful convention as Sapics hosted its sixth annual regional conference in the Western Cape.

Cobus Rossouw, Sapics president and chairman of the event, held at the Erinvale Estate in Somerset West in mid September, started the day’s proceedings: “It is wonderful to be here and fantastic that Sapics, as an organisation and as a community, has evolved to the extent that we can have many of these professional development events, conferences and all the other events and interactions on the side. In addition, the education helps us to actually make a difference in the supply chain world in which we operate.”

And education is exactly what the day brought. First up was Douglas Kent with a presentation entitled: Your supply chain is vulnerable! De-risk or go home! Kent was until recently the global vice president in charge of Avnet Velocity, Avnet Incorporated’s global supply chain solutions organisation.

He said that most companies are risking serious disruption, reputational damage or financial ruin because they have little in-depth knowledge of their extended supply chains and haven’t yet learned the art of collaboration.

Kent added that a break in the supply chain can reduce a company’s revenue, decrease its market share, inflate costs or threaten production and distribution – causing dissatisfaction to customers. “The first step in risk mitigation is to understand the risks for each supply chain,” he said. “Do you know how many supply chains you have? What are the most important attributes for each? What risks reside within them? And will these risks potentially keep you from reaching your business objectives?”

To get the answers to these questions, Kent suggested that you take a step back and try to expect the unexpected. “Ask ‘what if?’ and include a wide range of business functions and supply chain partners to brainstorm with an open mind.”

The next step in risk mitigation is to determine your “value at risk”. This is a supply chain operations reference (SCOR) – which is the framework for all supply chain management and the common language in supply chain operations. This measurement is used to quantify the mitigation possibilities of risk. Value at risk is defined as the sum of the probability of risk events multiplied by the monetary impact of the events for all supply chain functions.

In simple terms, this allows you to calculate what a potential risk can cost your company if there is a crisis – enabling you to chose, for example, alternative modes of transport or other operators, or to accept the possibility of that risk and carry on.

However, Kent suggested: “Make risk management a core competency within the company. Take out insurance policies to protect your key stakeholders and think about what could go wrong and develop scenarios.” He added: “You have to concentrate on being innovative in terms of both products and supply chain risk mitigation.”

The other speakers also upheld Sapics’s aim to drive an exchange of knowledge between experts and novices (see pages 52 and 66), with an array of students joining professionals on the podium.

“It is fantastic that students have always supported this regional event, and this year you did so much more – you actually stood up and told the story,” said Rossouw. “I would like to thank everyone at the University of Stellenbosch for helping our young professionals to be able to do that.”

He added that research is only relevant if it can be applied by industry. “You focus on a specific area and you put that innovation out there.”

Rossouw concluded by asking industry players to engage with academics. “Yes, they move a bit more slowly, but they think that much harder,” he said with a smile. “They actually come up with things that we’ll never come up with. It is a fantastic partnership to have, because they can help us to solve challenges in the world we live in today.”