autoliv risk management

Autoliv’s Provide Chain Threat Administration Journey

In February, Klaus Niebur, the director of world provide chain danger administration at Autoliv, and Jan Thiessen, the managing director at targetP!, spoke on greatest practices on provide chain danger administration at ARC Advisory Group’s Digital Transformation in Business convention.

Autoliv is the world’s largest security system provider in automotive trade. This world, Tier 1 producer is headquartered in Stockholm and had revenues of over $8 billion final yr. It provides airbags, seatbelts, and steering wheels to a lot of the Automotive OEMs – firms like Renault/Nissan, Volkswagen, and many others.  targetP!, in flip, is a boutique procurement consultancy.

The principle take aways from the presentation earlier this yr have been the next:

  1. The auto trade has made provide chain danger administration a precedence because the Fukushima nuclear catastrophe in 2011. Because the Automotive OEMs improved their provide chain danger administration processes, they then turned to their key suppliers to enhance their danger administration processes. Autoliv is the most important provider of security methods to the automotive trade. The corporate works onerous to satisfy the demanding necessities for high quality, innovation, and value from their OEM prospects. Due to that, they beefed up their disaster administration capabilities following Fukushima.
  2. By the top of 2019, Autoliv realized that there have been new applied sciences and provide chain danger administration suppliers that would promote a aggressive benefit of their danger administration program. These options can determine suppliers with monetary points, notify an organization when suppliers have regulatory violations, present intelligence on how issues like pure hazards or port delays will impression an organization’s provide chain, uncover the impacts of cybersecurity or political instability on provide chains, and detect a number of different kinds of threats to a provide chain in actual time.
  3. Their implementation of a provide chain danger administration resolution concerned adjustments to their processes and the way what their provide chain professionals have been anticipated to do. The availability chain staff understood the necessity for this type of resolution and Covid supplied robust reinforcement for the necessity for this type of resolution. Professionals from procurement, compliance, logistics, sustainability, information-security and several other different inner stakeholder all use the answer for various causes. Mr. Niebur didn’t say which danger administration resolution supplier they picked, however I think they applied an answer from riskmethods. The implementation of this digital danger platform was supported by targetP!, a boutique consulting agency specialised in constructing holistic provide chain danger approaches
  4. Implementing the answer concerned cleansing up grasp knowledge and mapping their full world provide chain. The implementation was not trivial. Threat administration options scrape knowledge from a whole lot of hundreds of on-line & social-media websites, however Autoliv additionally has entry to sources of knowledge that they pay for. They needed these various sources of knowledge pulled collectively in a single central, user-friendly location they name their “storage.” targetP! Helped to develop and implement a complete provide chain danger program that included an efficient governance construction, sensible contingency plans, and disaster response measures.

autoliv risk management

Autoliv’s Ongoing Journey in Provide Chain Threat Administration

Mr. Niebur’s and Thiessen’s presentation was taped in November of 2021 after which performed on-line in February. On the time we spoke, Mr. Niebur spoke of danger administration as a steady enchancment journey that might by no means finish. There have been a number of issues they have been seeking to accomplish within the close to time period. I needed to circle again to Klaus and Jan and get caught up on their journey.

Steve:  Klaus, once we talked, you talked about Autoliv was already doing digital provider administration, had digital sourcing options, and was taking a look at real-time transportation visibility options to offer higher predicted occasions of arrival for inbound and outbound shipments. Briefly, this danger administration resolution wanted to combine into your IT ecosystem. Your future imaginative and prescient was for danger administration to be seamlessly built-in into a complicated management tower. Are you able to discuss how this journey goes?

Klaus: That is right and it’s nonetheless our purpose to create this Management Tower. It should hyperlink all initiatives inside the provide chain operate and be enabled by our digital options and all knowledge sources. And we’re making progress.

Steve: Are you able to go into extra element in your imaginative and prescient for the management tower?

Klaus: The plan is to construct a holistic “one-stop-shop” Management-Tower alongside all provide chain capabilities.  This consists of plant operations, inbound and outbound transportation, warehousing, demand planning and our complete and working provide chain danger administration ecosystem. As a primary step, we’re working a “lean” Management-Tower inside our provider relationship administration system. That is our “provider board”. This intermediate step is extra associated to Procurement and provide chain transparency. Nonetheless, we’re screening the marketplace for know-how. One factor we’re on the lookout for is a brand new solution to create digital transparency upstream together with visibility to dangers from our N-Tier suppliers. This isn’t simply necessary for our provide chain groups. It is usually necessary for different stakeholders together with our compliance, sustainability and even our buyer administration groups.

Steve: You talked about your individuals have been swamped and that they wanted higher instruments to do their jobs. Are you able to give me a concrete instance of how your danger administration resolution detected a menace and got here to the rescue?

Klaus: I can´t give too many particulars for compliance causes. However let´s think about that an organization desires to put money into a brand new plant, in a rustic that they haven’t beforehand operated in. To start with, this firm wouldn’t know all of the dangers associated to that plant.  For instance, to construct that plant, the corporate would want to work with a building firm or firms. If we confronted that scenario, our danger analytics would come with monetary assessments of potential suppliers for this building venture. Unhealthy firms might jeopardize the flexibility to carry the plant dwell on schedule. Additional, the analytics might determine building corporations that would adversely impression our status if we chosen them.

Steve: You had engaged in in depth coaching however talked about that extra wanted to be executed. You additionally talked about that the way in which your professionals have been evaluated would possibly want to alter. Are you able to replace me on this?

Klaus: We’ve invested a major quantity of money and time on inner coaching over the previous few months. As well as, key gamers – corresponding to our Divisional Threat Managers, in addition to me – had an training program on danger administration that lasted a number of months. I additionally ran a number of webinars and summits for our suppliers and our prospects to assist them perceive how necessary we predict our danger administration program is.

Then in fact, our personal staff wants fixed coaching as a result of our initiative is evolving over time. We’d like to ensure all of the steps mandatory to enhance our resilience program is known. We additionally need to be sure that the brand new options and performance coming on-line will likely be effectively utilized in each day life. Quickly we are going to do extra coaching. This may happen after now we have finalize changes to our core procurement course of. For instance, improved resilience would require adjustments to the way in which we do provider pre-qualification, sourcing, and our procurement segmentation technique.

Steve: Jan, you haven’t mentioned a lot. Any remaining ideas?

Jan: I anticipate that 2023, and possibly for years to return, life will likely be as difficult because it was in 2022.

Klaus:  I agree. We are going to proceed to put money into our provide chain danger administration initiative to assist decrease any destructive impacts from sudden danger occasions. We’re strengthening our provide chain resilience wherever attainable, and this additionally includes doing extra work with our suppliers. We take into account Digitalization as one of many key success components on this journey. Nonetheless, procurement will stay a individuals enterprise; we all know that there will likely be no success in any respect if we aren’t investing in training. That’s why we are going to continually develop our individuals to develop into much more mature within the method during which they take care of danger.

Jan: I consider the success of any trendy provide chain danger administration strategy will likely be decided by how successfully we hyperlink people and machines.

Steve: Thanks each for taking the time to debate this.

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