1. Supply Chain Risk And What About Ethics? Lee Buddress, Ph.D., C.P.M. Robert G. Gleason Professor and Director Supply and Logistics Program Portland State University

2. Supply Chain Risk  Events or actions that result in a transaction or project differing from budget or plan  Events or actions that prevent delivery to customers as promised

3. Order Winning Characteristics  Design  Lead Time  Cost  Quality/Durability  Service  What Risks Most Impact  Ability to Serve Customers  Profitability

4. Supply Management Objectives  Continuity of Supply  Least Total Cost of Ownership  Create Competitive Advantage  Sustainable  What Risks Interfere With These Objectives

5. Supply Chain Risks  Big, Expensive Risks with Low Probability  Medium Risks with Medium Probability  Smaller Risks with High Probability

6. External Risks

7. Supply Chain Risk Classification  External Risks  Governmental  Infrastructure  Supplier  Logistical  Price  Terrorism  Natural Disasters  Accidents

8. External Risks: Governmental  Export Policies  Intellectual Property Protection  Protective Tariffs and Duties  Regulatory Changes  Taxes  Currency Fluctuations  Political Unrest

9. External Risks: Infrastructure  Roads  Railroads  Ports  River  Sea  Airports  Congestion  Domestic Infrastructure

10. External Risks: Suppliers  Operational  Equipment  Facilities  Management  Financial  Cultural/Language  Labor  Scalability  Quality  Lead Times  Monopoly/Oligopoly  Technology  Communication  Operational  Sustainability  Social Responsibility

11. External Risks: Logistics  Supplier Selection  Transportation Equipment  On Time  Freight Damage  Leakage/Shrinkage

12. External Risks: Price  Trends  Volatility

13. External Risks  Terrorism  Physical Harm  Personnel  Cyber Attacks/Hacking  Natural Disasters  Earthquakes, Tsunamis  Weather Related  Lightening Strikes  Accidents

14. Key External Risks  Labor Issues  Quality  Timing  Supplier Selection Process  Total Cost Analysis

15. Things to Watch  East & Gulf Coast Longshore Contract  West Coast Longshore Grain Contract  Ongoing Row Over Refer Plug-ins  Port Subsidizes Shipping Firms  Carriers Add $150 per Container  UPS/Teamsters Contract Negotiations  New Panama Canal  EU/ Airline Row Over Carbon Emissions  Carrier Capacity Constraints

16. Internal Risks

17. Supply Chain Risk Classification  Internal Risks  Policies  Resources  Operational

18. Internal Risks: Policies  Outsourcing  Low Bid  Freight Terms  Managing  Reverse Logistics  Excess Inventory  Repairs  Sustainability/Social Responsibility  No Standardization  Equipment  Procedures  No Formal Strategies  Not Having Policies

19. Internal Risks: Resources  Labor  Finances  Equipment  Technology  Automation  Communication  Enterprise

20. Internal Risks: Operational  Personnel  Numbers, Expertise  Demand Management  Customer  Supplier  Forecasting  Project Management  Specifications

21. Order Winning Characteristics  Design  Lead Time  Cost  Quality/Durability  Service  What Risks Most Impact  Ability to Serve Customers  Profitability

22. Risk Prevention/Remediation  Safety Stock  Safety Lead Time  Additional Suppliers  Geographic Dispersion  Ts and Cs  Business Continuity  Ours  Suppliers  Training  ISO 31000 2009  Supply Chain Mapping  Forecasting  Project Management  Review Supplier Selection Process  Supplier Visits  Daily Diligence

23. Key Risk Management Activity  How Suppliers Are Chosen  Supplier Visits  Supplier Mapping  Forecasting  Daily Diligence

24. Risk and Ethics

25. Ethics  More than Gifts and Gratuities  Cialdini’s Influence  Appearances

26. Unethical Sales Practices  Commercial Bribery  False Shortages  False Price Breaks  Market Allocation  False Delivery Promises  Quotation vs. Invoice  False Representation  Counterfeit  Back Door Selling

27. Unethical Purchasing Practices  Shopping Bids  Shopping Ideas  Samples  Favoritism  Payment Terms  Contract Quantities  Conflict of Interest International Ethics Issues  Cultural Issues  Reciprocity

28. Foreign Corrupt Practices Act  Illegal to Make Payments Influencing Purchase Decisions  Exempts “Processing Payments”  Accounting Requirements  Applies to ALL Publicly Traded Companies

29. Risk and Ethics  Risks to the Organization  Customer Loss  Reputation  Personal Risks  Job  Reputation  Personal Liability

30. Columbia River Bar http://www.youtube.com/embed/ByGSMme nPDM?rel=0

31. Questions, Comments, Observations, Conclusions, Arguments?