Case Study for Multinational Corporation Strategic Vendor/Supplier Replacement & Contingency Management Playbook
How to Reduce Costs & Minimize Risks/Disruptions Associated With a Strategic Supply Chain Vendor Using a Risk Management & Contingency Planning Playbook
March 2020
Case Study Overview
Supply Chain Disruption Risk
Although we rarely think about them, disruptions are likely to impact your supply chain at some point in the future. And the costs can be very high. Atlas Magazine estimates that 22% of companies that were hit with a supply chain disruption sustained losses of greater than $1.2M. In addition, 5% of companies with disruptions sustained losses of greater than $120M.
There are many supply chain disruption events that can take place such as vendor/supplier issues, natural disasters, pandemics, production interruptions, part shortages, trade wars, etc.
Every company will have a different set of potential supply chain risks specific to their company or vertical. And each product of offering will have a different risk portfolio depending on its components. Each supply chain will have different components or variables such as the location of facilities (the country, the region of the country, the climate, etc.). These components can have major effects on a product’s production lifecycle.
To address supply chain disruption risks, T Exponents has developed a Supply Chain Risk Management and Contingency Planning methodology, playbook and best practices to help plan for and minimize the risk to your business.
Problem Statement
A large multinational retailer wanted to replace a critical vendor in one of its regions. To accommodate growth targets in the region (per their five-year strategy), it was determined that a key provider would likely not be able to support the expected growth. Based on this decision, the provider would need to be replaced within a year with a potential disruption to over 1500 retail stores (16% of total stores and $67M in annual store delivery spend).
How We Solved the Problem
T Exponents was brought in to help in two areas:
First, oversee the development and execution of a supply chain contingency project plan to replace the at-risk provider.
Second, customize our Supply Chain Disruption, Risk Management and Contingency Planning methodology, best practices and playbook based on the specific needs of the retailer. The “playbook” would provide a framework for addressing future supply chain disruptions and risks