Using the Supply Chain Risk Management Dashboard

This chapter covers the following topics:

Understanding the Supply Chain Risk Management Dashboard

Due to the dynamic nature of the global business environment, companies are searching for ways to improve their supply chains in order to absorb disruptions that occur unexpectedly. While providing other substantial benefits, Just-in-time, and Lean Manufacturing initiatives have hindered many business's ability to absorb the impact of unexpected events. Slack in the supply chain - usually in the form of inventory - is no longer available and a sudden change, such as a missed supply, can have an immediate impact on a company's operations.

We can all think of sensational events that have a major impact on business operations but a missed supplier shipment of a critical component can also impact operations. Plant strikes, a demand spike, and quality issues are other examples of events that can halt your supply chain. The business reality of today requires companies to manage risks.

Managing risk in your supply chain is a cyclical process involving risk identification, risk mitigation, and execution of your mitigation strategies. The Supply Chain Risk Management (SCRM) dashboard focuses on evaluating risk mitigation strategies.

SCRM analysis of various Risk Mitigation strategies can be scenario intensive where different options can be effectively evaluated. The Supply Chain Risk Analytics application provides the ability to collectively review and compare key metrics in a single interface providing true Enterprise Planning capabilities to the SCRM dashboard.

The table below, while not comprehensive, highlights some of the problems and questions that can be addressed with the SCRM dashboard.

Business Problem What is the Risk? Where is the Risk? How do I mitigate the Risk?
Sudden demand change increase based on the updated consensus forecast

  • Lower profitability and margins due to increased costs for expediting, overtime

  • Impact to customer service due to inability to meet demand

  • Transportation: Increase in costs due to expediting and overseas shipments

  • Manufacturing: Increased costs due to overtime

  • Customers: Which customers are affected?

  • Products: Which product lines are impacted?

 Subcontract additional manufacturing capabilities
Natural disaster resulting in supply chain disruption

  • Lower revenue due to inability to meet demand

  • Inability to meet demand.

  • Margin impact due to increased costs for overtime and expediting

  • Manufacturing: Lost capacity at affected facility. Overtime at other facilities

  • Transportation: Increased expediting

  • Customers: Which customers are affected?

 Design of resilient supply chains by considering multiple sourcing options.
New product launch by competitor

  • Lower revenue due to lost market share

  • Increased inventories due to lower demand

  • Customers: Which regions are affected and by how much?

  • Inventory: Which categories are affected?

  • Manufacturing: Lower utilization at plants

 Demand shaping with promotion, lower price, or introduce competing product
Unexpected loss in capacity due to plant shutdown, labor strike, or resource issue

  • Lower revenue due to inability to meet demand

  • Inability to meet demand.

  • Margin impact due to increased costs for overtime and expediting

  • Manufacturing: Lost capacity at affected facility. Overtime at other facilities

  • Transportation: Increased expediting

  • Customers: Which customers are affected?

  • Contract excess capacity

  • Build in additional lines
Unexpected disruption in supply due to de-commit, quality, or other factors

  • Impact to customer service due to inability to meet demand

  • Lower profitability due to lower revenue and higher costs

  • Supply: Higher costs due to premium supplies

  • Transportation: Increased costs due to expediting

  • Manufacturing: Higher manufacturing costs due to overtime for late supplies

  • Customers: Which customers are affected?

  • Dual/multi sourcing

  • Component substitution
Timing of new product launch

  • Too early results in E&O

  • Too late results in loss of market share

  • Risk in margins, revenue

  • Inventory: Where is my inventory exposure if I launch early

  • Customers: Which customer regions are affected?

 Product timing balancing E&O with revenue/margins
Exposure based on probably demand ranges. For example: baseline, optimistic, pessimistic forecasts

  • Impact to margins if low/high forecast is met

  • Impact to customer service if high range is met

  • Inventory: What is my inventory exposure if pessimistic forecast is met

  • Inventory: What are my shortages if my optimistic forecast is met

  • Manufacturing: What is the effect on manufacturing for the pessimistic/optimistic forecast

  • Transportation: Increase costs due to expediting

  • Customer: What customers are affected?

  • Renegotiate supplier contracts to accommodate flex ranges

  • Contract additional manufacturing capacity for potential upside demand

The report pages leverage the flexibility of the Oracle Business Intelligence – Enterprise Edition (OBIEE), which enables the layout and content of the delivered reports to be changed by the user. The reports are organized in logical groupings as pages, or tabs, within the Supply Chain Risk Management Dashboard.

For details on how to use the OBI-EE features, see Oracle Business Intelligence Answers, Delivers, and Interactive Dashboards User Guide.

These pages are available for the supply chain risk analyst:

The Glossary page provides:

Using the Executive Review Page

This section provides an overview of the Executive Review page and discusses:

Understanding the Executive Review Page

The Executive Review page allows the risk analyst to quickly and efficiently evaluate the different scenarios across different metrics and KPI's. The goal is to understand the trade-offs of choosing one scenario over another so that compromises and risks are understood. For example, lower margins might be an acceptable trade-off compared for improved customer service or improved supply chain resiliency.

To access the Executive Review page:

  1. Select the Supply Chain Risk Analyst responsibility.

  2. Select Supply Chain Risk Management Dashboard.

  3. Select the Executive Review tab.

Page-Level Filters

Page-level filters are provided at the top of the Executive Review page. Page-level filters are used to filter the results of the work areas.

This table lists the page level filters for the Executive Review page:

Filter Description
Comparison Scenario Select from a list of scenarios by which to compare to a baseline scenario. This is a required field.
Baseline Scenario Select from a list of scenarios to be used as the baseline. Only one scenario can be selected. This is a required field.
Fiscal Year Select from a list of fiscal years. Multiple years can be selected. This is an optional field.
Category Select from a list of item categories. Only one category can be selected. This is an optional field.

Profit Comparison

This report shows Total Revenue, Total Cost, Gross Margin, Revenue and Margin Difference across the baseline and comparison scenarios. Values displayed are calculated as follows:

The difference values are the difference between the comparison scenarios and the baseline scenario.

Additional reports that you can access from the Profit Comparison report are (in alphabetical order):

Cost Analysis

This report provides an overall cost breakdown of the different cost types across scenarios and can be used to quickly identify the cost drivers for a given scenario. Total Cost Difference provides a quick summary of the cost difference between the comparison and baseline scenarios and drill-downs from this column provides additional cost differences by type.

Fixed costs, Shutdown and Startup Costs are costs that can be modeled in Oracle Strategic Network Optimization (SNO) for network design and analysis.

Fixed costs are period-specific fixed operating costs for an organization. Startup costs is the cost for starting up a facility, and shutdown cost is the cost of shutting down a facility and can often be a benefit due to the sale of the organization assets. If this value is negative, it represents a net inflow (benefit) of capital.

The View option above the chart allows you to display the report information by Cost Breakdown or Total Cost.

Additional reports that you can access from the Cost Analysis report are (in alphabetical order):

Revenue by Fiscal Period

This report shows revenue over time across the baseline and comparison scenarios and is useful for highlighting revenue risk across scenarios such as significant revenue fluctuations which may have a material impact on the business.

The View option above the chart allows you to display report information in a Revenue Chart or Revenue Table.

Additional reports that you can access from the Revenue by Fiscal Period report are (in alphabetical order):

Margin by Fiscal Period

This report shows margin over time across the baseline and comparison scenarios and is useful for highlighting profitably risk when modeling risk events in the various scenarios.

The View option allows you to display the report in a margin chart or margin table.

Additional reports that you can access from the Margin by Fiscal Period report are (in alphabetical order):

Supply Demand KPI

This is a summary of the key supply and demand Key Performance Indicators across scenarios.

Additional reports that you can access from the Supply Demand KPI report are (in alphabetical order):

Inventory KPI

Key inventory KPI values appear in this report and are useful when leveraging Inventory Optimization (IO) to define optimal safety stock policies in concert with network design Decisions in Strategic Network Optimization (SNO).

Utilization KPI

This report provides a high level summary of resource and supplier utilization. Supplier utilization is relevant if supplier capacities are constrained.

Additional reports that you can access from the Utilization KPI report are (in alphabetical order):

Strategic Plans

This report displays Strategic Network Optimization (SNO) plans based on the selected Baseline and Comparison scenarios. The plan names represent links that allow you to access the SNO workbench to view the plan for further analysis. When opening the SNO plan, only the base model is loaded and not the specific scenario.

Inventory Optimization Plans

This report displays Inventory Optimization (IO) plans for the selected scenarios. The plan names represent links that allow you to access the IO Analysis workbench to view the plan for further analysis.

Using the Inventory Analysis Page

This section provides an overview of the Inventory Analysis page and discusses:

Understanding the Inventory Analysis Page

In most cases risk in the supply chain manifests itself as inventory. For this reason, a dedicated page for inventory analysis will be provided to allow for inventory comparisons across scenarios. This page can be used to analyze the risk of different network design alternatives in your supply chain taking into consideration the impacts of variability and its affect on inventory. Postponement strategies can also be evaluated for different network design scenarios, providing a measure of risk that can be evaluated. This page can help answer questions such as:

To access the Inventory Analysis page:

  1. Select the Supply Chain Risk Analyst responsibility.

  2. Select Supply Chain Risk Management Dashboard.

  3. Select the Inventory Analysis tab.

Page-Level Filters

Page-level filters are provided at the top of the Inventory Analysis page. Page level filters are used to filter the results of the work areas.

The table below lists the page-level filters for the Inventory Analysis page.

Filter Description
Comparison Scenario Select from a list of scenarios by which to compare to a baseline scenario. This is a required field.
Baseline Scenario Select from a list of scenarios to be used as the baseline. Only one scenario can be selected. This is a required field.
Fiscal Year Select from a list of fiscal years. Multiple years can be selected. This is an optional field.
Category Select from a list of item categories. Only one category can be selected. This is an optional field.

Cost Analysis

This report provides an overall cost breakdown of the different cost types across scenarios and can be used to quickly identify the cost drivers for a given scenario. Total Cost Difference provides a quick summary of the cost difference between the comparison and baseline scenarios and drill-downs from this column provides additional cost differences by type.

Fixed costs, Shutdown and Startup Costs are costs that can be modeled in Oracle Strategic Network Optimization (SNO) for network design and analysis.

Fixed costs are period-specific fixed operating costs for an organization. Startup costs is the cost for starting up a facility, and shutdown cost is the cost of shutting down a facility and can often be a benefit due to the sale of the organization assets. If this value is negative, it represents a net inflow (benefit) of capital.

The View option above the chart allows you to display the report information by Cost Breakdown or Total Cost.

Additional reports that you can access from the Cost Analysis report are (in alphabetical order):

Network and Inventory Summary

This report provides a summary of network and inventory Key Performance Indicators and is useful when holistically designing your supply chain network taking into account the number and location of facilities in conjunction with the impacts to your inventory policies. The intent is to analyze scenarios where Strategic Network Optimization and Inventory Optimization are used in concert.

The number of items Single Sourced is a useful risk metric that reports on the number of items that have only one source for a given organization. A higher number indicates an increased risk in your supply chain

Additional reports that you can access from the Network and Inventory Summary report are (in alphabetical order):

Postponement Analysis

This report is primarily used when incorporating Inventory Optimization in your scenarios and quantifies the impact of inventory postponement in both inventory carrying cost and safety stock. A higher degree of postponement indicates lower overall inventory risk.

Fact Notes

All facts represent dollar values.

Carrying Cost Savings = Carrying Cost without Postponement – Carrying Cost

Safety Stock Savings = Safety Stock without Postponement – Safety Stock Value

The report allows you to view information based on the selected View. The available options are view by Table or Chart.

Additional reports that you can access from the Postponement Analysis report are (in alphabetical order):

Excess and Obsolescence

This is summary report indicates the potential amount of excess or obsolete components and is a good measure of inventory risk.

The reports allow you to view information based on the selected View. The available options are view by Category or Organization.

The Total Excess Value is computed as:

Total Excess * Item Standard Cost

Where Total Excess includes excess on hand plus excess on order. Excess on hand is the difference between On-Hand Inventory and Demand within the Excess Horizon and Excess On-Order is the difference between On-Order Inventory and Demand within Excess Horizon.

The Total Obsolescence Value is computed as:

Total Obsolete * Item Standard Cost

Where Total Obsolete includes obsolete on hand plus obsolete on order. Obsolete on hand is the difference between On-Hand Inventory and Demand within Obsolescence Horizon and Obsolete On-Order is the difference between On-Order Inventory and Demand within Obsolescence Horizon.

Additional reports that you can access from the Excess and Obsolescence report are (in alphabetical order):

Safety Stock Scenario Analysis

This report provides the ability to compare safety stock by category, organization, or period across the various scenarios.

The View list provides the following options for the report data to be displayed:

Additional reports that you can access from the Safety Stock Scenario Analysis report are (in alphabetical order):

Inventory Analysis

This report allows you to compare the projected available balance against the safety stock targets for each scenario.

The View selector provides the following options:

The Scenario selector allows you to choose which scenario data to view.

Additional reports that you can access from the Inventory Analysis report are (in alphabetical order):

Service Level Scenario Comparison

This report provides a summary of the service level shortfall by customer, period, and category or demand class and can be used in gauging customer service risk.

Service level difference is calculated as follows:

Service Level Difference = Service Level – Target Service Level.

Additional reports that you can access from the Service Level Scenario Comparison report are (in alphabetical order):

Unmet Revenue Analysis

The magnitude of unmet revenue by customer, category, or fiscal period can be compared across scenarios to identify the largest shortfall of revenue across these different dimensions. With this knowledge, actions can be taken to mitigate revenue risk.

Additional reports that you can access from the Unmet Revenue Analysis report are (in alphabetical order):

Using the Supply Chain Sourcing Page

This section provides an overview of the Supply Chain Sourcing page and discusses:

Understanding the Supply Chain Sourcing Page

The Supply Chain Sourcing page allows the Supply Chain Risk Analyst the ability to compare supply, manufacturing, and transportation sourcing between two scenarios. To be able to compare the scenarios effectively, we limit the choice to two scenarios.

To access the Supply Chain Sourcing page:

  1. Select the Supply Chain Risk Analyst responsibility.

  2. Select Supply Chain Risk Management Dashboard.

  3. Select the Supply Chain Sourcing tab.

Page-Level Filters

Page-level filters are provided at the top of the Supply Chain Sourcing page. Page level filters are used to filter the results of the work areas.

The table below lists the page-level filters for the Supply Chain Sourcing page.

Filter Description
Comparison Scenario Select from a list of scenarios by which to compare to a baseline scenario. This is a required field.
Baseline Scenario Select from a list of scenarios to be used as the baseline. Only one scenario can be selected. This is a required field.
Fiscal Year Select from a list of fiscal years. Multiple years can be selected. This is an optional field.
Category Select from a list of item categories. Only one category can be selected. This is an optional field.

Supplier Sourcing

Supplier sourcing can be compared across different scenarios to analyze overall distribution of purchasing dollars across suppliers and can provide visibility to highlight an unbalance allocation of supplies across suppliers.

Table and chart views allow you to view the supply distribution by supplier.

Additional reports that can be accessed from the Supplier Sourcing reports are (in alphabetical order):

Manufacturing Sourcing

Manufacturing sourcing can be compared across the different scenarios to analyze the overall manufacturing cost distribution across the different organizations.

Table and chart views allow you to compare the manufacturing sourcing by plant for each scenario.

Additional reports that can be accessed from the Manufacturing Sourcing reports are (in alphabetical order):

Transportation by Mode

Comparison of transportation modes can be analyzed in this report to assess the amount of transportation dollars allocated to a specific mode.

Table and chart views allow you to compare the transportation cost by mode for each scenario.

Additional reports that can be accessed from the Transportation by Mode reports are (in alphabetical order):

Supply Chain Risk Management Secondary Drill-Down Reports

Primary reports are located on the three tabs in the Supply Chain Risk Management Dashboard. Secondary reports are reports that you access from the primary reports.

The table below list secondary reports for the Supply Chain Risk Management Dashboard in alphabetical order.

Report Name Measures or Facts Dimension or View by
Carrying Cost by Category Carrying Cost Scenario, Fiscal Period
Carrying Cost by Fiscal Period Carrying Cost Scenario, Fiscal Period
Carrying Cost by Item Carrying Cost Scenario, Fiscal Period
Carrying Cost by Organization Carrying Cost Scenario, Fiscal Period
Comparison of Inventory and Safety Stock by Category Inventory Value, Inventory Days of Cover, Inventory Quantity, Safety Stock (units), Safety Stock (Days), Ratio (Inventory Days of Cover / Safety Stock in Days) Category
Comparison of Inventory and Safety Stock by Organization Inventory Value, Inventory Days of Cover, Inventory Quantity, Safety Stock (units), Safety Stock (Days), Ratio (Inventory Days of Cover / Safety Stock in Days) Organization
Consensus Forecast by Fiscal Period Consensus Forecast Fiscal Period
Constrained Forecast by Fiscal Period Constrained Forecast Fiscal Period
Cost by Resource Resource Cost Resource
Excess Details by Category On Hand, On Order, Demand within Excess Horizon, Excess On Hand, Excess On Order, Total Excess, Excess On Order (value), Excess On Order (value), Total Excess (value) Category
Excess Details by Organization On Hand, On Order, Demand within Excess Horizon, Excess On Hand, Excess On Order, Total Excess, Excess On Order (value), Excess On Order (value), Total Excess (value) Organization
Fixed Cost by Organization Fixed Cost Organization
Fixed Cost by Period Fixed Cost Fiscal Period
Inventory Turns by ABC Class Inventory Turns Item
Inventory Value by Category Inventory Value Category
Inventory Value by Organization Inventory Value Organization
Items Single Sourced Order Quantity Item
Manufacturing Cost by Fiscal Period Manufacturing Cost Fiscal Period
Manufacturing Cost by Organization Manufacturing Cost Organization
Manufacturing Volume by Category Manufacturing Volume Category
Manufacturing Volume by Fiscal Period Manufacturing Volume Fiscal Period
Margin by Fiscal Period Margin Fiscal Period
Margin by Organization Margin Organization
Obsolescence Details by Category On Hand, On Order, Demand within Obsolescence Horizon, Obsolete On Hand (value), obsolete on-order (value), Total Obsolescence (Value) Category
Obsolescence Details by Organization On Hand, On Order, Demand within Obsolescence Horizon, Obsolete On Hand (value), obsolete on-order (value), Total Obsolescence (Value) Organization
Postponement by Category Carrying Cost, Carrying Cost without Postponement, Safety Stock, Safety Stock without Postponement, Carrying Cost Savings, Safety Stock Savings Category
Postponement by Organization Carrying Cost, Carrying Cost without Postponement, Safety Stock, Safety Stock without Postponement, Carrying Cost Savings, Safety Stock Savings Organization
Purchasing Cost by Category Purchasing Cost Category
Purchasing Cost by Fiscal Period Purchasing Cost Fiscal Period
Purchasing Cost by Item Purchasing Cost Item
Purchasing Cost by Organization Purchasing Cost Organization
Purchasing Cost by Supplier Purchasing Cost Supplier
Resource Utilization by Fiscal Period Resource Utilization Fiscal Period
Resource Utilization by Organization Resource Utilization Organization
Resource Utilization by Resource Resource Utilization Resource
Revenue by Category Revenue Category
Revenue by Customer Revenue Customer
Revenue by Fulfillment Organization Revenue Fulfillment Organization
Revenue by Item Revenue Item
Revenue by Organization Revenue Organization
Service Level Difference by Category Service Level Difference Category
Service Level Difference by Fiscal Period-Category Service Level Difference Category, Fiscal Period
Service Level Difference by Fiscal Period-Customer Service Level Difference Customer, Fiscal Period
Service Level Difference by Item Service Level Difference Item
Shutdown/Startup Cost by Period Shutdown/Startup Cost Fiscal Period
Single Source Count by Category Number of Items Single Sourced Category
Single Source Count by Organization Number of Items Single Sourced Organization
Startup/Shutdown Cost by Organization Startup/Shutdown Cost Organization
Supplier Utilization by Fiscal Period Supplier Utilization Fiscal Period
Supply Value by Category Supply Value Category
Supply Value by Item Supply Value Item
Supply Value by Source Organization Supply Value Source Organization
Top – Days of Cover by Item Days of Cover Item
Top Service Level Difference by Customer Service Level Difference Customer
Top Supplier Item Utilization Supplier Utilization Scenario, Customer
Top Unmet Revenue by Customer Unmet Revenue Customer
Total Demand by Category Total Demand Category
Total Demand by Customer Total Demand Customer
Total Demand by Fiscal Period Total Demand Fiscal Period
Total Demand by Item Total Demand Item
Total Supply by Category Total Supply Category
Total Supply by Fiscal Period Total Supply Fiscal Period
Total Supply by Item Total Supply Item
Transportation by Category Transportation Cost Category
Transportation by Source-Destination Transportation Cost Source-Destination
Transportation Cost by Fiscal Period Transportation Cost Fiscal Period
Transportation Cost by Item Transportation Cost Item
Transportation Cost by Lane Transportation Cost Lane
Transportation Cost by Ship Method Transportation Cost Ship Method
Unmet Revenue by Category Unmet Revenue Category
Unmet Revenue by Customer Unmet Revenue Customer
Unmet Revenue by Fiscal Period Unmet Revenue Fiscal Period
Unmet Revenue by Fiscal Period-Category Unmet Revenue Category, Fiscal Period
Unmet Revenue by Fiscal Period-Customer Unmet Revenue Customer, Fiscal Period
Unmet Revenue by Item Unmet Revenue Item