DHL Resilience360
- An innovative approach of managing of Weather Incidents in logistics
Customer Solutions & Innovation
Resilience360 | DHL DHL | Page 2
Source: Deutsche Post DHL; 1) Centre for Research on the Epidemiology of Disasters ; 2) Supply Chain Resilience 2011, survey of 340 organizations; 3) World Economic Forum Supply
Chain and Transport Risk Survey 2011; 4) Jeff Dobbs, Global Sector Chair, Diversified Industrials and a partner with KPMG in the U.S 5) Hendrick & Singhai, “The Effect of Supply
Chain Disruptions on Long-Term Shareholder Value, Profitability and Share Price Volatility,” 2011 6) McKinsey survey in Sep. 2006 (3,172 responses from executives across full range
of industries); 4) McKinsey survey in Sep. 2006 (3,172 responses from executives across full range of industries);
Key Facts about Risks in Global Supply Chains
NOT EXHAUSTIVE
Number of natural disasters has
increased by almost three times
over the last 30 years1)
73% of interviewed companies
experienced at least one SC
disruption in 20122)
Companies experienced on
average a 10% reduction in
shareholder value, after a supply
chain disruption5)
Only 9 % of American supply
chain executives said that they
could assess the impact of a
disruption within hours4)
Centre for Research on the
Epidemiology of Disasters
93% of the leaders of the
worlds top companies in the
CEO summit in 2012 said they
were unprepared for supply
chain disruptions3)
Only 9% of companies claimed
high confidence in mitigating
their key supply chain risks and
only 15% have detailed
assessment models6)
Global supply chain risks and respective disruption management are
becoming a prevailing topic
Resilience360 | DHL DHL | Page 3
Source: Desk Research: News Agencies (CNN - The global supply chain: So very fragile, Bloomberg - Toyota May Lose 500,000 Vehicles of Output Post-Earthquake, Analyst Says,,
Rheinische Post - BMW stoppt Produktion in drei Werken)
BMW halted production, losing
7,000 vehicles in a week after
a volcanic ash cloud delayed
delivery of vital electronic
components
Western Digital production of
hard drives was completely
stopped due to flooding in
Thailand 2011, causing a total
cost of ~USD 250mn
Toyota produced 500.000 less
vehicles than planned and
quarterly profit shrank by 75%
following the tsunami in Japan
2011
Winter ice storm emergency in
northeast of America caused
flight delay and cancellation.
Oil production had to halt,
losing more than 400.000
barrels per day
Porsche befell a production
loss of 450 cars per day, due
to a flood in Slovakia which
blocked car bodies from being
transported to the assembly
factory in Germany
After the super typhoon in the
Philippines, operations of 16
ports were suspended and
several flights were canceled.
Supply Chain Disruption Examples
Disruptions have a significant bottom-line impact –
Supply chain risk management as opportunity for significant savings
Resilience360 | DHL DHL | Page 4
Customer
Network data
Site contacts
Volumes & priorities
Supply Chain expertise
Best Practices in
Contingency Management
People on the ground to
take actions worldwide
Partners
Real time incident feeds
Statistical risk evaluations
Competences for risk-
specific deep-dives
Incident Monitoring Risk Assessment
Input from … …to create one joint platform for
Supply Chain Risk Management
Source: DHL Supply Chain Risk Management
DHL
I 1 I 2
• Multi-tiered visualization of
your global and end-to-end
supply chain
• Create transparency on
exposure and vulnerability
in over 20 global risk
categories
• Rate resiliency and ensure
coverage of backup plans
• Identify risk hotspots and
recommend suitable
mitigations & alternatives
• Near real-time 24/7
alerts on supply chain
relevant incidents and
risk warnings
• Filtering options to alert,
based on specific
categorization of risk and
its severity level
• Trigger follow-up actions
immediately
DHL Resilience360
Resilience360 | DHL DHL | Page 5
Four areas of risks are in scope: operational risks, natural
disasters, hazards, and socio-political risks
Supply Chain Risks in Scope
Illegal Cargo
Introduction
Counterfeiting
Cargo Theft
Regulatory
Supplier Financial Stress
Law
Enforcement
Customs Efficiency Strike
State Insecurity
External
Intervention
Terrorism
Corruption
Extra Tropical
Cyclone
Tropical Cyclone
Wildfire
Lightning
Tsunami
Industrial Fire
Utility Failure
Flood
Volcano Earthquake
Tornado Hailstorm IT Failure Risk
Risks out of scope: market risks, exchange and interest rate fluctuation, production risks, product quality risks, lack of logistics
capacity, legal risks, cyber attack risk, environmental or brand reputation risks
Power Outage
Telecommunication Outage
Pandemics
Proximity
Resilience360 | DHL DHL | Page 6
Hotspot Analysis
Hotspot selection based
on risk score and resiliency
rating and importance
• Prioritization of critical
SC entities
• Plausibility check of
results
• Recommendation
on next steps
• Reports per risk and per
site
Resiliency
Rating Severity Score
Scoping &
SC Mapping
Node assessment
as part of network
Node redundancy in
network
• Resiliency rating based
on alternative capacities
and time-to-recover
• Assessment through
expert dialogues from
logistics and
procurement
Node assessment as
stand-alone entity
Node failure &
recovery
• Risk Exposure
scores based on
reliable databases
• Existing mitigation
measures and impact
scores captured through
customized survey
Scoping of network
to important entities
• Product Groups
• Key Suppliers
• Key Markets
• Value Chain
• Risks in scope
Mapping of supply chain
with all entities and flows
Data preparation for risk
assessment tool
Source: DHL Supply Chain Risk Management
Which sites are
important?
Which sites are
endangered?
Which sites are
not replaceable?
Which sites need
to work on their
resiliency?
After the 4 steps of analysis the you will know on which sites you
need to focus to increase your supply chain’s resiliency
Risk Assessment - Methodology
Resilience360 | DHL DHL | Page 7
Supply Chain Mapping
Resilience360 | DHL DHL | Page 8
Earthquake Tornado
Exposure Risk Mapping - Overview
Resilience360 | DHL DHL | Page 9
Exposure Risk Mapping - Details
Resilience360 | DHL DHL | Page 10
Survey for Impact Assessment
Exposure
Score
PRIMARY LOCATION
OF OPERATIONAL
IT SYSTEMS
• Centralized datacenter
to host systems
• Local IT systems
REDUNDANCY OF
INFRASTRUCTURE
Power supply
Network &
telecommunication
CENTRAL DISASTER RECOVERY
• Class 1 – Disaster proof
• Class 2 – Disaster resistant
• Class 3 – High availability
• No disaster recovery in place
LOCAL DISASTER RECOVERY
• Class 2 – Disaster resistant
• Class 3 – High availability
• No disaster recovery in place
4
3
2
1
4
3
2
5
Resilience360 | DHL DHL | Page 11
Risk Assessment Site Report
Resilience360 | DHL DHL | Page 12
A unique combination of a consulting-based study and usage of global
supply chain risk intelligence to derive a bespoke analysis
Risk Assessment - Benefits
KEY BENEFITS
Identify your choke points, critical
locations and clustering
Determine risk hot spots and where the
benefit of investing in mitigation work is
to maximize benefits
Make better informed sourcing, supply
chain set-up & network re-designing
decisions based on risk profiling
Plan for the worst case scenarios with
ready to execute back-up plans
Resilience360 | DHL DHL | Page 13
Customer
Network data
Site contacts
Volumes & priorities
Supply Chain expertise
Best Practices in
Contingency Management
People on the ground to
take actions worldwide
Partners
Real time incident feeds
Statistical risk evaluations
Competences for risk-
specific deep-dives
Incident Monitoring Risk Assessment
Input from … …to create one joint platform for
Supply Chain Risk Management
Source: DHL Supply Chain Risk Management
DHL
I 1 I 2
• Multi-tiered visualization of
your global and end-to-end
supply chain
• Create transparency on
exposure and vulnerability
in over 20 global risk
categories
• Rate resiliency and ensure
coverage of backup plans
• Identify risk hotspots and
recommend suitable
mitigations & alternatives
• Near real-time 24/7
alerts on supply chain
relevant incidents and
risk warnings
• Filtering options to alert,
based on specific
categorization of risk and
its severity level
• Trigger follow-up actions
immediately
DHL Resilience360
Resilience360 | DHL DHL | Page 14
Incident Monitoring Overview
Resilience360 | DHL DHL | Page 15
Incident Monitoring Details
Resilience360 | DHL DHL | Page 16
Dashboard overview tracking new incidents & node status
New incident 1
Feedback on status &
actions
Status: Disrupted
Comments:
• Shipments delayed for 2
days
• Future disruptions
expected
4
Updated status 5
Alert Profiles (Filter) 2
Capability to trigger stored
emergency plans & inform
up- & downstream sites
6
Incident Monitoring– Schiphol Airport Flight Delay Example
Source: DHL Supply Chain Risk Management
Alert message for site 3
Resilience360 | DHL DHL | Page 17
Incident Monitoring – Supply Chain Relevant Incidents
Resilience360 | DHL DHL | Page 18
Example Weather/Natural Disaster Incidents
Resilience360 | DHL DHL | Page 19
Incident Monitoring - Benefits
Incident Monitoring will make the supply chain more reliable with
full visibility and the flexibility to react in case of unforeseen events.
KEY BENIFITS
Secure scarce material, transport and
production resources during a disaster
Avoid emergency logistics costs due
to unplanned coordination of mitigation
actions
Save time for production re-sourcing,
re-planning and alternative sequencing
Turn a disruption into an advantage
Resilience360 | DHL DHL | Page 20
Thank You!
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