1. Supply Chain Insights LLC Copyright © 2015, p. 1 Supply Chain Risk Management Study Summary Charts July 2015

2. Supply Chain Insights LLC Copyright © 2015, p. 2 Agenda  Study Overview  Risk Overview  Risk Drivers and Disruptions  Risk Management Performance

3. Supply Chain Insights LLC Copyright © 2015, p. 3 Study Overview

4. Supply Chain Insights LLC Copyright © 2015, p. 4 Respondents Primarily Work for Manufacturers; Average Company Size Is $5.6 Billion in Revenue and 13K Employees

5. Supply Chain Insights LLC Copyright © 2015, p. 5 Nearly Half Work in a Discrete Industry

6. Supply Chain Insights LLC Copyright © 2015, p. 6 Respondents Are Primarily in the US/Canada and Are Split Between Those in Finance vs. Supply Chain

7. Supply Chain Insights LLC Copyright © 2015, p. 7 Most Report That the Supply Chain Leader Reports to the President or a C-Level Executive

8. Supply Chain Insights LLC Copyright © 2015, p. 8 Agenda  Study Overview  Risk Overview  Risk Drivers and Disruptions  Risk Management Performance

9. Supply Chain Insights LLC Copyright © 2015, p. 9 Summary of Supply Chain Risk Management

10. Supply Chain Insights LLC Copyright © 2015, p. 10 Risk Management Is a Relatively Low Source of Business Pain for Respondents

11. Supply Chain Insights LLC Copyright © 2015, p. 11 Talent Is Among Top Pain Across Roles; Risk Management Is Equally Low Across Roles

12. Supply Chain Insights LLC Copyright © 2015, p. 12 Talent Is Among Top Pain Across Roles; Risk Management Is Equally Low Across Industries

13. Supply Chain Insights LLC Copyright © 2015, p. 13 Definition Given to Respondents

14. Supply Chain Insights LLC Copyright © 2015, p. 14 Respondents Were Required to Be at Least Somewhat Familiar with Supply Chain Risk Management

15. Supply Chain Insights LLC Copyright © 2015, p. 15 Those in Finance Are Less Familiar with Supply Chain Risk Management Than Others

16. Supply Chain Insights LLC Copyright © 2015, p. 16 Over Half Report Risk Management Is Embedded in Other Processes

17. Supply Chain Insights LLC Copyright © 2015, p. 17 Over Half Report Risk Management Is Embedded in Other Processes

18. Supply Chain Insights LLC Copyright © 2015, p. 18 Most Consider Risk Management an Important Part of Company’s Supply Chain Strategy

19. Supply Chain Insights LLC Copyright © 2015, p. 19 Those in Supply Chain Are More Likely Than Others to Consider Supply Chain Risk Management Important

20. Supply Chain Insights LLC Copyright © 2015, p. 20 Over Half Driven to Risk Management because of Right Thing to Do and/or Leadership Focus

21. Supply Chain Insights LLC Copyright © 2015, p. 21 Top Reasons for Risk Management Importance Are Consistent Across Core Roles

22. Supply Chain Insights LLC Copyright © 2015, p. 22 Two in Five Report the Head of the Supply Chain Is Responsible for Supply Chain Risk Management

23. Supply Chain Insights LLC Copyright © 2015, p. 23 Top Supply Chain Challenge Today: Cautious

24. Supply Chain Insights LLC Copyright © 2015, p. 24 Top Supply Chain Desired Descriptors for Next Year: Controlled & Working Well

25. Supply Chain Insights LLC Copyright © 2015, p. 25 Greatest Desired Improvements: Modern, Fast & Agile

26. Supply Chain Insights LLC Copyright © 2015, p. 26 Those in Supply Chain Are More Likely Than Finance to Describe Supply Chain as Working Well

27. Supply Chain Insights LLC Copyright © 2015, p. 27 Those in Supply Chain Are More Likely Than Finance to Desire a Supply Chain That Is Aligned, Proactive, Global and Working Well

28. Supply Chain Insights LLC Copyright © 2015, p. 28 Agenda  Study Overview  Risk Overview  Risk Drivers and Disruptions  Risk Management Performance

29. Supply Chain Insights LLC Copyright © 2015, p. 29 Supply Side and External Risks Are Most Common Issues Addressed by Risk Management

30. Supply Chain Insights LLC Copyright © 2015, p. 30 Those in Supply Chain Are More Likely Than Others to Report That Risk Management Addresses External Risks

31. Supply Chain Insights LLC Copyright © 2015, p. 31 Supply Side Risks Are Most Common Issues Addressed by Risk Management Across Industries

32. Supply Chain Insights LLC Copyright © 2015, p. 32 Top Three Drivers of Supply Chain Risk TODAY: Product Quality, Supply Viability, Demand Volatility

33. Supply Chain Insights LLC Copyright © 2015, p. 33 Product Quality Is Among Top Three Risk Drivers Across Roles

34. Supply Chain Insights LLC Copyright © 2015, p. 34 Product Quality Is Among the Top Three Risk Drivers Across Industry Types

35. Supply Chain Insights LLC Copyright © 2015, p. 35 Top Categories for Most Common Risk Drivers: Internal and Partners

36. Supply Chain Insights LLC Copyright © 2015, p. 36 Partner-Related Drivers Expected to Decline Over Time; Consumer and Political Drivers Expected to Increase

37. Supply Chain Insights LLC Copyright © 2015, p. 37 Globalization Is Among Top Expected Risk in FIVE YEARS Across Roles

38. Supply Chain Insights LLC Copyright © 2015, p. 38 Today’s Top Risk Driver Is Product Quality; In Five Years, Expect it to Be Globalization

39. Supply Chain Insights LLC Copyright © 2015, p. 39 Drivers Most Expected to Increase: Computer Security, Globalization, Regulatory Compliance, and Operations Complexity

40. Supply Chain Insights LLC Copyright © 2015, p. 40 Top Areas of Increased Risk vs. 5 Years Ago: Regulatory Compliance and Operations Complexity

41. Supply Chain Insights LLC Copyright © 2015, p. 41 Top Areas of Expected Increased Risk in 5 Years: Regulatory Compliance and Operations Complexity

42. Supply Chain Insights LLC Copyright © 2015, p. 42 Top Areas of Increased Risk in 5 Years Vs. 5 Years Ago: Operations Complexity and Consumer Power

43. Supply Chain Insights LLC Copyright © 2015, p. 43 Areas of Increasing Supply Chain Risk: Operations Complexity, Regulatory Compliance and Consumer Power

44. Supply Chain Insights LLC Copyright © 2015, p. 44 70% Had Any Disruptions in 2014, but Only 38% Included Them in Financial Reporting

45. Supply Chain Insights LLC Copyright © 2015, p. 45 Supplier Issues and Natural Events Were Most Impactful to Supply Chains in Past Five Years

46. Supply Chain Insights LLC Copyright © 2015, p. 46 Top Two Supply Chain Disruptions in 5 Years: 2015’s West Coast Slowdown and 2012’s Hurricane Sandy

47. Supply Chain Insights LLC Copyright © 2015, p. 47 2015’s West Coast Slowdown Is Among Top Two Events Across Industries

48. Supply Chain Insights LLC Copyright © 2015, p. 48 Top Two Supply Chain Disruptions in 5 Years: 2015’s West Coast Slowdown and 2012’s Hurricane Sandy

49. Supply Chain Insights LLC Copyright © 2015, p. 49 For Those in the Process Industries, the West Coast Slowdown and Hurricane Sandy Had the Most Impact

50. Supply Chain Insights LLC Copyright © 2015, p. 50 For Those in the Discrete Industries, the Japan Tsunami, West Coast Slowdown and Hurricane Sandy Had the Most Impact

51. Supply Chain Insights LLC Copyright © 2015, p. 51 For Those in the Retail/Other Industries, the West Coast Slowdown and Hurricane Sandy Had the Most Impact

52. Supply Chain Insights LLC Copyright © 2015, p. 52 Agenda  Study Overview  Risk Overview  Risk Drivers and Disruptions  Risk Management Performance

53. Supply Chain Insights LLC Copyright © 2015, p. 53 About Half Report Their Company Is Performing Well on Supply Chain Risk Management

54. Supply Chain Insights LLC Copyright © 2015, p. 54 No Difference in Perceived Risk Management Performance by Role

55. Supply Chain Insights LLC Copyright © 2015, p. 55 Profile of Those High vs. Low Performing on Supply Chain Risk Management

56. Supply Chain Insights LLC Copyright © 2015, p. 56 While 80% Report Risk Management Is Important, Only Half Report Good Performance

57. Supply Chain Insights LLC Copyright © 2015, p. 57 Over Two-Thirds Claim Company’s Risk Management Is Better Than 5 Years Ago

58. Supply Chain Insights LLC Copyright © 2015, p. 58 Those in Supply Chain Are More Likely Than Others to Think Supply Chain Risk Management Has Improved

59. Supply Chain Insights LLC Copyright © 2015, p. 59 Why Changes in Risk Management vs. Five Years Ago (Open-Ended)

60. Supply Chain Insights LLC Copyright © 2015, p. 60 Top Three Risks Are Also Top 3 Prepared: Product Quality, Supply Viability, and Demand Volatility

61. Supply Chain Insights LLC Copyright © 2015, p. 61 Drivers Less Prepared for Compared to Risk: Operations Complexity and Economic Uncertainty

62. Supply Chain Insights LLC Copyright © 2015, p. 62 Demand Volatility is Top Driver of Risk Today, but Companies Are Most Prepared for Product Quality Issues

63. Supply Chain Insights LLC Copyright © 2015, p. 63 Those in Supply Chain Feel Better Prepared for Product Quality and Outsourcing Issues Compared to Finance

64. Supply Chain Insights LLC Copyright © 2015, p. 64 Less Than Half Have Visibility of Their Extended Network During Supply Chain Disruptions

65. Supply Chain Insights LLC Copyright © 2015, p. 65 88% Monitor the Financial Status of 1 st Tier Suppliers vs. 79% for Extended Tier Suppliers

66. Supply Chain Insights LLC Copyright © 2015, p. 66 Most Important Risk Management Techniques: Inventory Buffers, Supply Monitoring, Business Continuity Plans, and Supplier/Customer Conversations

67. Supply Chain Insights LLC Copyright © 2015, p. 67 Overall Back-up Plans Are Most Important Type of Risk Management Technique

68. Supply Chain Insights LLC Copyright © 2015, p. 68 Inventory Buffers Are Among Top 3 Important Techniques Across Roles

69. Supply Chain Insights LLC Copyright © 2015, p. 69 Expected New Risk Management Techniques (Open-Ended)