Managing Supply Chain Risk and the Standards Making Process

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Managing Supply Chain Risk and the Standards Making Process

04/19/2023


219/04/2023

Who is BSI?

• By Royal Charter – focused on the development of standards, training and certification

activities designed to Improve performance, manage risk , reduce cost and enable

sustainable growth

• Leading Global Standards Creation Body: British, European, ISO, Public and Private

Standards

• Global Network: 70,000 clients in 150 countries

• Experienced: The world’s first National Standards Body established in 1901

• Thought Leaders: Founding member of ISO and shaped the world’s most adopted

standards, incl. ISO 9001, 14001, 18001, Information Security, Business Continuity, Energy

Management, FSCC 22000

• Trusted: We’re a Royal Charter Company, reinvesting profits back into our business to keep

business relevant – Improve performance, reduce cost, ensure sustainability.


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A truly global brand and network – trusted and recognized

• Global key account management

• Facilitating governance, risk &

compliance

• Certifying and verifying global

suppliers

• Stimulating international trade

• Clients in 150

countries

• 65 offices worldwide

• 3 regional hubs:

• UK

• US

• Hong Kong


Reputational Risk - Hidden Supplier Risk

A Social, Quality, Environmental and Security Challenge


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Everybody is talking about it

http://upload.wikimedia.org/wikipedia/commons/5/51/IBM_logo.svg

http://images.google.com/imgres?imgurl=http://www.gradjobs.co.uk/uploaded_files/28561127463600P&G-logo.gif&imgrefurl=http://www.gradjobs.co.uk/company_profile.php?id=2856&h=150&w=150&sz=1&tbnid=GqqNkdrr9aa7dM:&tbnh=96&tbnw=96&prev=/images?q=proctor+and+gamble+logo&start=3&ei=cyM1RvVkkL6AA6jN4IUD&sig2=oH5oP6sVP4s2QiAyof-0Sw&sa=X&oi=images&ct=image&cd=3

http://images.google.com/imgres?imgurl=http://www.dashermagic.com/Pics/coke%20logo.jpg&imgrefurl=http://www.dashermagic.com/Corporate.aspx&h=558&w=552&sz=41&tbnid=fgI9IkDvkZiRVM:&tbnh=133&tbnw=132&prev=/images?q=coke+logo&start=1&ei=vCM1Rp_EOKe0gAPvqOSuAw&sig2=jnXcEBNNr_-Lf7LWfS1iTg&sa=X&oi=images&ct=image&cd=1

http://images.google.com/imgres?imgurl=http://www.jaybrewer.net/fastfoodfever/pictures/mcdonalds-logo.jpg&imgrefurl=http://www.fastfoodfever.com/blog_archive/2004_05_02_fastfoodfever.html&h=150&w=200&sz=4&tbnid=hBdnbTiKQf-ZDM:&tbnh=78&tbnw=104&prev=/images?q=mcdonalds+logo&start=2&ei=0CI1RoOCGqTIgwPf4IWVAw&sig2=QPuGeNLEdmppIfMx-wcUTQ&sa=X&oi=images&ct=image&cd=2

http://www.entropy-international.com/customers/videos/video-toyota.asp


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The Challenge: Hidden Supplier Risks

Many Supply Chain Black Holes

What You Don’t See – You Don’t Know

What You Don’t Know – You Can’t Manage


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Reputational Risks

WORKPLACE CONDITIONS

SECURITY & CUSTOMS WATER RESOURCES

& CHEMICAL WASTE

POLLUTION

COUNTERFEIT PRODUCTS

FOOD SAFETY

FOOD FRAUD


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Environmental & Social Challenges


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World Population growth will magnify the challenge


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Global Carrying Capacity – the planet can support

1 Billion1 Billion

4 Billion4 Billion

14 Billion14 Billion


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Increasing Supply Chain Complexity

• The World’s Largest Shoemaker doesn’t actually make shoes, but only designs and sells • The World’s Largest Personal Computer Direct seller doesn’t manufacture its products but assembles them from components sourced elsewhere• The World’s largest beverage manufacturer has an outsourced manufacturing franchise model

http://www.google.com/url?sa=i&rct=j&q=complex+supply+chain&source=images&cd=&cad=rja&docid=ClSWEZw3bkpvOM&tbnid=bxkJy0mOB3UpKM:&ved=0CAUQjRw&url=http://www.piperreport.com/archives/2005_03.html&ei=U5K0UdTNB4nOyAGRtoHoAQ&psig=AFQjCNHlca9Eg22FrPBk-50mrx-MUsfHkg&ust=1370874830204284


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Your REPUTATION isyour

of Executives say a strong corporate brand is just as important as strong product brand

87%

of a company’s market value is attributable to its brand reputation

60%

of consumers avoid buying a product if they don’t like or trust the company behind the product

70%Source Weber Shandwick 2012The Company behind the Brand: In Reputation We Trust

http://www.google.com/url?sa=i&rct=j&q=Brand+reputation&source=images&cd=&cad=rja&docid=RYLIHlWhlwtONM&tbnid=oDqvdePVrnND6M:&ved=0CAUQjRw&url=http://www.wizseoservicesaustralia.com/reputation-management-australia/&ei=7pi0Uf7wDMnlyAGx3IGIDg&psig=AFQjCNFn8MgBMZiYYCKwM2a72Qi7A2lx7g&ust=1370876494091409




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• Understanding your hidden supply chain risk is critical to protecting your brand.

• Supplier traceability leads to improved ability to manage risk• Better alignment of values with entire supply chain stakeholder • Land usage, pastoral practices, worker ethics and OHS• Animal husbandry, breeding and temperament • Animal welfare and religious issues need to be defined • Acclimatization, feeding, transportation• Post shipment management, husbandry, feeding and slaughtering• Chain of custody – supplier pre-qualification and approval will be critical to ensure supply chain integrity

Protecting Brand, Business & Livelihood


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Standards and Standards making process

Standards as knowledge

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Standards are not regulations


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Examples of where Standards have worked well and not worked well

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Lack of Standardization

BS EN ISO/IEC 7810:1996Physical Characteristics of

Identification Cards


1819/04/2023

The Standards Landscape

First Generation• Technical

Specifications• Better

Products

Second Generation• Management

Systems• Better

Processes

Third Generation• Values &

Ethics• Behaviours• Services

sector

Remember - Standards are knowledge


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Types of Standards

Low High

LowHigh

ControlTim

e

Int’l Standards

(e.g. ISO 22000)

European Standards (EN)

Publicly Available Specifications (e.g. PAS 220, 223)

Private Standards (e.g. BRC, SQF, WQA)

Australian Standards (AS 5812)

Corporate Technical Specifications (e.g. Coles, ALDI)


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Standards Development

BSI works with organisations to develop standards needed in order to:• Fix specific problems faced by that organisation or Industry • Fill a gap – no standards currently exist or in development.

We do this by:• Advising the stakeholders on their specific industry challenges• Focused on the needs of the sponsoring organisation or industry associations• Controlled by the BSI guidelines to ensure credibility


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How does it work?

Finalise StandardScope

Domain Research & Content Generation

Train Technical Experts

Drafting

FinalizeDraft

Publication

Launch

Project Scope

Review PanelWider/public consultation independently facilitated by BSI. The review group may

include:• Formal standards committees

• Government departments• Trade associations• Technical Experts• Other industry

stakeholders• Consumer groups

Steering Group: 5 – 8 key stakeholders in the subject area,

usually identified by the client


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Carbon reduction project (Taiwan Environment Agency)

Need: Increase awareness over carbon neutrality / Embed best Patrice within Taiwan Industry

Project: Revision of International Carbon Neutrality PAS

Benefits: • Consistent approach to carbons management • Soft touch regulation• International recognition for Taiwan EPA in carbon

sector


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Reputation Risk: Blood diamond

Issue: Exposure to ethical issue and quality issues

Project: Traceability in supply chain

• Establish a standard methodology for assurance of traceability in the supply chain • Train suppliers and vendors along the supply chain on

new standard

Benefits: Brand protection; underpin brand strategy & product mark; reputation


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Process consistency: Customer service (AIR CHINA)

Issue: After multiple acquisitions, Air China needed support to design and implement a new Customer Support Management System (CSMS). Their challenge was defining.

Project: Create private standards covering customer management internal best practice and ensuring commitment with the proposed process

Benefit: Customer service process consistent over the seven new air-china sites

http://www.airchina.com.cn/www/en


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Alternative to regulation – Food Industry


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Examples for Primary Industry


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Community sustainable development

Development & Commercialisation of new

technology

Chemical Usage

Biodiversity

Supply Chain stakeholder engagement

Sustainability

Traceability

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Land Usage

Origin

Farm EmployeesOHS & Social

Energy Management

Food-Agri Sector

Water Management

Animal Welfare


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1. Hope is not a method

2. Needs a strategy

3. Strategy does not happen without Governance

4. Governance does not happen without Ethics

5. Ethics does not happen without stakeholder engagement

Sustainability Tomorrow

Don’t leave it to chance


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Key take away • The meaning of quality has a new definition

• Supply chains are becoming more complex with increasing risk

• Traceability, visibility and transparency of supply chains will be critical

• Regulations are not the only means to push industry good practices

• Voluntary standardization is a key driver in most developed countries, the

market makes the good practices compulsory not government

• Governments & Industry Associations call regularly on BSI to test their

Industry

• Organization can benefit / demonstrate leadership using standardization as a

means of defining what good looks like in shaping their business model and

protecting their brand

• Be in a position where you are able to tell your supply chain story or someone

else will

04/19/2023

Documents

Managing Supply Chain Risk and the Standards Making Process