Question 3 – (i): The first dimension refers to the predictability of unknown events. The latter describes the ability to manage and limit frequency and impact of risk. The unknown–unknowns are risks that can hardly be predicted. Terrorist attacks, epidemics, or geo-political instability are typical examples, but due to the climate change, also extreme weather events and related natural catastrophes will become harder to predict. The known–unknowns are risks that can be predicted from analyses of past events, for example by the means of statistical data analysis, e.g. meantime to failure, supplier lead time . Controllability refers to the ability to manage and limit frequency and impact of risk. This classification is subject to individual expert assessment: the predictability and controllability of execution problems strongly depend on the nature of the business environment and the sighted level of business objectives. Moreover, the binary character makes it hard to compare the degree of control or knowledge between different event Known – unknown risks: risk events whose occurrence is foreseeable. The probability of occurrence or likely consequences are known. For example, a risk is that a shipment is delayed due to customs intervention in the process. The probability of that occurring by country can be calculated. The consequences may be a 24 hour delay, causing some inconvenience or in the worst case, the shipment is not allowed entry and required to be returned to its destination. The consequences are therefore unknown, but potentially bad. Unknown – unknown risks: an event with its probability of occurrence and effect not being foreseen, even by experienced supply chain professionals. These are considered as ‘force majeure’ events. To better allocate Unknown-unknown risks, divide them into two categories: 4a. Unknown but knowable unknown risks: The term can be shortened to ‘knowable unknowns’, which means there are uncertainties in your supply chains that are currently not known, but which could be identified through investigation. They are ‘knowable’ in the sense they can be known if sufficient time is allowed to identify the likelihood and consequences of events. Therefore knowable unknowns’ are not what are called Black Swan events. 4b. Unknown and unknowable unknowns: are never identified until they happen. These events are called Black Swans and cannot be addressed using risk management techniques. Then take from the lecture slides and tables. Question 4 (i) Lecture slide -definition Question 4 (ii) Supply Chain Carbon Footprint Reduction Overall there are key overriding factors to be considered in defining and optimizing any end-to-end Supply Chain strategy from an environmental perspective: 1. Reduce waste and improve efficiencies And one of the fundamental objectives in any Lean program is the need to reduce waste. This fits perfectly with any program for reducing environmental impacts and carbon emissions reduction. Ensuring that a well-functioning Lean program is in place at all facilities across your end-to-end supply chain will by definition work to ensure a reduction in resource consumption, energy usage and sustainability. It is valuable to explicitly delineate a Carbon/Environmental improvement objective as a required outcome and focus in these Lean programs. 2. Reduce carbon emissions A carbon emissions reduction strategy must take all Suppliers into account, not just the impact from your in-house facilities. Further your Supplier selection and management plan must include reporting on environmental emission metrics along with reduction goals and performance tracking. 3. Reduce energy usage The manufacturing and processing operations at your Suppliers also drive energy consumption. Just changing lighting in these facilities, for example, can result in both lower costs and a reduced carbon footprint. 4. Conserve natural resources 5. Reduce – Reuse – Recycle Therein is a requirement for businesses to look at all ways to look to recycle and repair, and repurpose their products everywhere possible. 6. Promote clean, sustainable resource utilization There are ways to reduce your supply chain’s carbon footprint that not only make your customers happy, but also have a positive impact on the environment too. Here are five ways to “green” your supply chain: 1. Measure Your Transportation Carbon Footprint There are many ways to transport your goods: ocean, truck, rail or air. When possible, the greenest way to ship is via ocean freight, which has the lowest carbonemission of any mode. In fact, it’s so low, the World Shipping Council found that a shipment of cargo from Australia to Long Beach (approximately 8,000 miles) produces less carbon emissions than trucking the same goods from Long Beach to Dallas (approx. 1,500 miles). If you want to further reduce your carbon footprint via ocean freight, consider an All Water Service (AWS) when appropriate. This service maximizes the ocean time for your shipment; for example, a shipment coming from Hong Kong would go through the Panama Canal to reach the U.S. East Coast. Another benefit is lowering your shipment cost compared to discharging at a U.S. West Coast port and using truck/rail to deliver on the East Coast. There is a trade-off for using this eco-friendly option: Time. If your goods went from Hong Kong to Long Beach before being transported via truck or rail to the East Coast, it’s much faster. However, your carbon footprint is far higher versus an All Water Service (AWS). By calculating your carbon emissions, you can determine where you are producing the most emissions and then consider ways to reduce them. To do so, use the Green Freight Handbook, which has simple formulas to calculate your carbon footprint. 2. Ship FCL When Possible There are various reasons to ship full container loads (FCL) over less than container loads (LCL): it’s faster, your goods are less likely to be damaged and it’s costefficient. It’s also eco-friendly, one large load will create less emissions than several small ones. If you are an importer with multiple suppliers that ship LCL, consider Buyers Consolidations. The right international freight forwarders can build a FCL by gathering together your various shipments from two or more nearby suppliers. 3. Avoid Air Freight If Possible Out of all transportation mode, air freight has the highest carbon emissions, nearly 40 to 50 times higher than ocean transportation. While air freight can sometimes be the best option to ship your goods, the impact on the environment is significant. If you are committing to a greener supply chain, avoid air freight as much as possible or consider carbon offsets to balance it out. 4. Review Your Packaging Options Below are two ways to modify your packaging to help reduce your carbon footprint. Reduce the weight and size of your cargo when possible. For example, if you import soccer balls, deflate them for shipping to save container space. Also, avoid unnecessary packaging design that adds bulk or wastes stowage space. Look for packaging materials that have a low carbon footprint, such as biodegradable or recyclable materials. These materials reduce the impact on the environment overall, not just through carbon emissions. 5. Carbon Offsets It’s impossible to produce with zero carbon emissions, but what you can’t reduce yourself, you can offset. You can buy a carbon offset to help fund programs that are working to reduce greenhouse gases. It’s not only a way to green your supply chain management, but is a great way to support advancements in green technology. Currently, the United States doesn’t require companies to purchase carbon offsets. However, many companies are doing so voluntarily, and there are a variety of programs that can help. Do your research before choosing a carbon offset program and search for programs that are certified by reputable environmental organizations or nonprofits. Some carbon offset programs are tax-deductible too. Various industries are looking for ways to reduce their impact on the environment, a trend that will only continue to grow as it becomes more cost-effective. Question 4(ii) Question 5(i) Question 5(ii) As medical devices become increasingly complex, the need for reliable, compliant, and cost-efficient supplier partners is of great importance to strategic sourcing and direct procurement executives. At the center of all decision-making is balancing quality and cost when finding and partnering innovative suppliers. Q1 Productions sent a survey to strategic sourcing and direct procurement leaders in the medical device industry, and this is what they had to say. What is the most important thing to keep in mind when you are selecting a supplier? 1. “Total Cost of Ownership” Strategic sourcing and direct procurement teams realize that the price of a component or service does not always indicate the total cost for a medical device company. Other factors such as transportation, logistics and product quality can contribute to the total cost of ownership. 2. “Product Quality” Strategic sourcing and direct procurement teams realize that the price of a component or service does not always indicate the total cost for a medical device company. Other factors such as transportation, logistics and product quality can contribute to the total cost of ownership. 3. “Supplier Capabilities” Ensuring that a supplier can actually do what they claim can save lots of time and headaches down the road. Additionally, medical device companies can expand their partnerships with suppliers to leverage other capabilities and expertise the supplier may have. 4. “Consistency” Evaluating a supplier’s consistency is another best practice used by industry experts. Can you rely on the supplier to deliver the same results every time? 5. “Risk” With the changes to ISO 13485 focusing heavily on Risk Management, this is a critical factor to consider when selecting a partner. Strategic sourcing and direct procurement executives recognize the importance of identifying and mitigating potential risks in a supplier partnership. Price If you are in a new business, a key consideration for choosing suppliers is affordability. If you are focused on managing your finances, competitively priced suppliers are an attractive option. However, cheap does not always represent the best value for money. If the quality of your supplier's product or service is poor, you may incur extra costs for returns and replacements, and risk losing business with any delays that result. If you decide to pass poor quality on to your customers, you risk damaging your business reputation. Learn more about starting a new business. Reliability Reliability should be another key consideration for choosing suppliers. Reliable suppliers deliver the right goods or services on time, as described. Large suppliers are generally reliable because they have enough resources and systems in place to make sure they can still deliver if anything goes wrong. However, you can often develop a closer relationship with small suppliers - especially if you are their main customer. In these cases your supplier may also respond better to different requests, such as rush orders or holding on to stock. Learn more about stock control. Stability Look for experienced suppliers who have been in business a long time. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item you need for your business. Exercise due diligence. Check the supplier's credit history to see if they are financially stable. It is worth finding out what businesses have used a particular supplier's services and asking them for a reference. Location Think about location when choosing suppliers. Dealing with distant suppliers might mean longer delivery times and extra freight costs. If you need something quickly, a local supplier might be a better option. But be sure to investigate freight policies of distant suppliers. Bulk orders, for instance, might get you free shipping or you might be able to combine different orders to reduce costs. Quality There’s often a correlation between cost and quality: the more expensive the product, the better the quality. Regardless of price, there is still a predetermined, agreed level of quality, and you want to be sure that your expectations are met. After all, the last thing you want to do is market your products as high-end, when your supplier sends you something completely different. Quality doesn’t just refer to the physical product itself, but its associated aspects too. Are the products packaged adequately, protecting them in transit? Are they labelled correctly? Speak with potential suppliers to ensure that you’re fully aware of what they will offer you – you don’t want to sign a contract and then be disappointed. Shared Culture Expectations are only met when they are clear on both sides. A good supplier relationship is built on shared cultural goals and attitudes. Speak with suppliers directly to find out how they like to work with other businesses. If you want constant communication but they prefer to just “get on with it”, then realistically, that’s not going to work. When speaking with suppliers, whilst you’ll have questions to ask them; it’s likely they’ll have equally as many questions for you. Use this time to gauge whether your culture and expectations are similar, as you should get a good idea of whether or not the relationship will work.