As the discipline of supply chain risk management emerges, it's becoming especially relevant for the automotive industry. Learn how automotive supplier Dana Incorporated tackles supply chain risk, and get best-practice tips for designing your own company's supply chain risk management processes.
One of the most challenging aspects of dealing with supply chain risk is that it’s an emerging discipline. However, best-practice methodologies are becoming more established, and riskmethods customers are at the forefront of it. In this blog, I highlight one of our supply chain risk management leaders: Dana Incorporated.
Dana Incorporated is a major supplier for the automotive industry and a world leader in highly-engineered solutions for improving the efficiency, performance and sustainability of powered vehicles and machinery. Their vision is to be the global technology leader in efficient power conveyance and energy-management solutions that enable their customers to achieve their sustainability objectives.
Dana decided to address supply chain risk because they were tired of being caught unaware about risk to their enterprise. According to Chris Dawson, Senior Manager Purchasing Analytics: “At Dana, we decided that we didn’t want any more surprises. By taking a proactive, instead of a reactive, approach to supply chain risk management, we knew we’d be able to save money and react more quickly when crises did occur.”
Though Dana previously had a manual process for identifying risk in their supply chain, it wasn’t enough for them to capture the big picture of all the threats to their organization, especially with respect to natural disaster and geopolitical risk. Dana took a number of steps to close the gaps.
Dana automated their risk identification processes so that they were alerted to all risk, from financial risk to geopolitical and natural disaster risk. They could then monitor their suppliers, own sites and supply paths.
Dana used their risk identification data to inform supplier scorecards containing four main indicators: a product score, a dependency score, a performance score and a financial score.
Dana established Supply Risk Review Councils on business unit and regional levels, and created action plans that were regularly maintained for risky suppliers.
The end result of Dana’s program was an improvement in proactive risk mitigation that allowed them to more effectively respond to supply chain disruptions, saving them time and money—and even allowing them to provide better service for their customers.
Want more details about exactly how Dana tackled supply chain risk? Read the full case study here.
Dan is the account executive for the automotive industry at riskmethods. Got questions about how supply chain risk is threatening your business? Drop him a line at om@riskmethods.net.
