OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety...

23
OPERATIONAL RESILIENCE TURNING THREATS INTO COMPETITIVE ADVANTAGE Washington D.C. October 2 nd 2014 TAPA AP Conference| HCM City | 06 th October 2016 Robert Larson, Vice President Head of Global Security,Operational Resilience and Health & Safety DHL Global Forwarding, Freight

Transcript of OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety...

Page 1: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

OPERATIONAL RESILIENCE –TURNING THREATS INTO COMPETITIVE ADVANTAGE

Washington D.C. October 2nd 2014

TAPA AP Conference| HCM City | 06th October 2016

Robert Larson, Vice President

Head of Global Security,Operational Resilience and Health & Safety

DHL Global Forwarding, Freight

Page 2: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

2

Logistics is the Backbone of International Trade ….

Investing in mature and

emerging markets

Connecting Consumers,

Suppliers & Manufacturers

Taking cost out of value chain

Supporting the development of

world-class infrastructure

Securing the global supply chain

TAPA AP Conference| HCM City | 06th October 2016

Page 3: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

3

.. .And Trade Volumes are Continuously Increasing

2020 (est.)1990

Eastern EuropeWestern

Europe

Canada

US

Middle East

Latin America

Africa

Japan

Asia-Pacific

2020 estimate

4.8%

8.8%

3.5%

9.8%

8.7%

17.5%

17.9%

4.0%25.1%

Latin America

Canada

JapanEastern Europe

Asia-Pacific

US

1990

Middle East

Africa

Western

Europe

6.4%

4.0%

13.1%

6.2%

7.0%

23.7%

23.3%

2.6%13.8%

50‒100 Mrd. USD

101‒500 Mrd. USD

>500 Mrd. USD

TAPA AP Conference| HCM City | 06th October 2016

Page 5: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

Supply Chain Risk and Business Interruption are the Major Risks01

TAPA AP Conference| HCM City | 06th October 2016

Page 6: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

Why Resiliency Matters

Source: 1) Business Continuity Institute & Experton Group; 2) World Economic Forum Supply Chain and Transport Risk Survey 2011; 3) Jeff Dobbs, Global Sector Chair, Diversified Industrials and a

partner with KPMG in the U.S 4) Hendrick & Singhai, “The Effect of Supply Chain Disruptions on Long-Term Shareholder Value, Profitability and Share Price Volatility

01

of companies had at least one

SC disruption in 2013 with

average disruption costs of 3

million Dollars1)

of the leaders of the worlds top

companies in the CEO summit

in 2012 are unprepared for

Supply Chain disruptions2)

81% 93%

TAPA AP Conference| HCM City | 06th October 2016

Page 7: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

Incidents Can Affect Supply Chains Anytime & Anywhere

Source: Desk Research: News Agencies (CNN – Toyota May Lose 500,000 Vehicles of Output Post-Earthquake, Analyst Says, Business Week – Apple: The Fall of an American Icon, Chicago Tribune – Gm’s Strike Loss Grows USD 1.65Bn,

Rheinische Post - BMW stoppt Produktion in drei Werken ICIS-Japan disaster: BASF curbs production, closes plants; BDP international-Flooding Forces Shutdown of Chemical Plants in Thailand; BBC-Fuel strike begins to hit supply; Analyst Says,

Reuters - Thieves grab up to $75 million in Eli Lilly drugs; WIPRO – Supply Chain Vulnerability in Times of Disaster; MIT – Reducing the Risk of Supply Chain Disruptions); http://www.sabc.co.za/news/a/19037f8044ad98d49597fd3bfe17c0b1/

Numsa-strike-impacts-GM-production-20141007

2001CISCO had to write-down USD 2.2bn due to an inefficient inventory management only designed for high demand & big buffers.

2010ELI LILLY & CO lostdrugs worth USD 75mnin a single theft froma warehouse.

2010BMW halted production, losing 7,000 vehicles in a week after a volcanic ash cloud delayed delivery of vital electronic components.

2014SAMSUNG lost 40.000 electronic devices worth more than USD 6mn from a single cargo theft in a factory in Brazil.

2008Around 15% of SHELL’s sites in UK were impacted and some 112 out of 8,900 petrol stations were forced to close due to a labor strike.

1998GM lost over USD 2bn due tolabor strike that disrupted production in several US states.

2011TOYOTA produced 500.000less vehicles than planned and quarterly profit shrank 75% following the tsunami in Japan.

2013A strike by 220,000 members of the National Union of Metalworkers in South Africa resulted in a six day production stop for General Motors.

2011SHIN-ETSU CHEMICAL,and ASAHI KASEI experienced production outage in Thailand due to widespread floods across the country.

TAPA AP Conference| HCM City | 06th October 2016

Page 8: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

8

A New Threatening Coalition – Cargo Theft Gangs And Drug Smugglers

Collaborate With Hackers

1044 kilos cocaine / 1099 kilos heroin

TAPA AP Conference| HCM City | 06th October 2016

Page 9: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

99

AON terrorism risk map 2016

TAPA AP Conference| HCM City | 06th October 2016

Complex Risk Assessment due to Broader Spectrum of Potential Impacts

Page 10: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

10

Terrorist Attacks Globally on Transportation

Source: Aon’s 2010/2014 Terrorism Threat Map; National Center for Ecological Analysis and Synthesis; PwC Transportation & Logistics 2030, Volume 4: Securing the Supply Chain; International Maritime Bureau; Gateway Regions – very high cargo flow regions, Chokepoints – only one narrow way across a strait, valley or bridge e.g. Suez Canal

90 percent of the entire global trade flows through only 39 bottleneck regions.

TAPA AP Conference| HCM City | 06th October 2016

Page 11: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

11

Natural Disasters have Increased by Around 10%

© 2015 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE – As at January 2015

TAPA AP Conference| HCM City | 06th October 2016

Page 12: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

12

Are you Ready to Respond?

TAPA AP Conference| HCM City | 06th October 2016

Page 13: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

13

DHL Response – Integrated Security & Operational Resilience Program

13

Over 100 full time Security & Ops

resilience professionals

Comprehensive program for

Security, Business continuity and

Health & Safety management

Site & lane assessments and

audit program

Innovations in technologies &

tools ( 360 Resilience)

Training program named „C-TPAT

best practice“ by US Customs

Border protection “CBP”

More than 60 TAPA-certified

sites worldwide

ISO 22301 BCM certification as

the first forwarder for more than

40 stations

Global Security Partnership program

with more than 30 carriers, ground

handlers and authorities

Secure Ocean Freight service Secure Railway service out of

China to Europe

High-value land

transportation service

TAPA AP Conference| HCM City | 06th October 2016

Page 14: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

Innovation is Reciliency

Rates your supply chain risks

and resiliency, identifies risk

hot spots and recommends

suitable mitigations

Monitors your supply

chain in near real-time for

incidents, filters relevant

information and triggers

follow-up

24/7 Risk Control Towers

determines your impact on

business continuity, highlights

existing gaps and implements

efficient mitigation actions

01

TAPA AP Conference| HCM City | 06th October 2016

Page 15: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

Application for the Deutsche Post DHL Group

…collect and assess all relevant intelligence

• Type and time of incident

• Affected area / asset

• Impact on the Deutsche Post DHL Group

…disseminate relevant information to

stakeholders

• Draft and distribute quick assessment report

• Inform the Group’s Security Function

without delay

• Raise awareness of relevant management.

…perform trend analysis and forecasts

• Develop incident database

• Relate incidents to each other

• Develop trend graphs

• Predict future incidents / impacts

02

The tool allows us to ….

TAPA AP Conference| HCM City | 06th October 2016

Page 16: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

16

Business Continuity is a Management Process

Business Continuity Management involves

managing the recovery or continuation of

business activities in the event of business

disruptions

The Management process:

- identifies potential threats to the

organization and impacts to business

operations

- provides a framework for building

organizational resilience for an effective

response that safeguards, reputation,

brand and value-creating activities

TAPA AP Conference| HCM City | 06th October 2016

Page 17: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

17

Requirements for a BCM program

Framework to be created based on specific

business related requirements.

Standard guides on logical steps for a solid BCM

system

Governance by Business Experts

Usage of Management Method

Plan, Do, Check and Act

Focused around the management of

facilities, staff and processes

Covers Business, Legal & Customer specific

requirements

TAPA AP Conference| HCM City | 06th October 2016

Page 18: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

18

10 Step Approach

BCP’s

Provision of

Resource

IMT

Business Analysis

BIA Risk Assessment

Determining Choices

Determining BCP

Strategy

Testing and Exercising

Maintaining and Reviewing

1

2

9

3

4

5

6

7

8

10

Country & Station has clearly displayed the BCM Policy and has communicated this to all employees locally

Station to create Business Continuity Plans (BCP‘s) for all possible risks that could affect

critical operations and the BCP‘s are to detail how to manage the incident and how it will

recover its activities

Country & Station has appointed a BCM nominee with appropriate seniority to be accountable for

implementing BCM

Station has ensured that it‘s BCP arrangements are reviewed and documented at

planned intervals

Station has identified activities (operations) that support its key products and services and its priorities

for recovery of critical activities

Station has completed a business impact analyse and has identified and documented the sites

threats

Station has formed a Incident Management Team (IMT) with deputies for all key functions

Station has determined how it will recover each critical activity within its recovery time

objective (RTO), including the resources required for resumption

Station IMT has successfully carried out 3 table top exercises in the past 12 months

and any lessons learnt have been incoporated into future plans

Using the Risk Assessment document the station has, for each of its critical activities

identified, available risk solutions

TAPA AP Conference| HCM City | 06th October 2016

BCM policy

Page 19: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

19

Outcome of an effective BCM Program

Key products & services are identified &

Protected

Incident management capability for

effective response

Improved understanding of self

(organization) its relation to others (other

industries, regulators, stake holders, local

authorities…..)

Trained staff to respond to incidents

Secured supply chain

Protection of reputation

Compliance to legal & regulatory

obligations

TAPA AP Conference| HCM City | 06th October 2016

Page 20: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

20

Where we stand with our BCM Activities

The Americas region ISO 22301 certification have been successfully re-validated,

AP started with it’s certification process early this year whereas EU and MEA will

start later

ISO 22301

• Re-validation of ISO 22301 certification AM

• Kick-off AP BCM in April

• EU and MEA to confirm roll-out plan

• Pre-audits of identified hubs and stations

• Nomination of IMT‘s

• Conduct of BIA and risk assessments

Quantitatively Managed

• Process Measured and Controlled

• Regular Tabletop Exercise

• Executive Sponsorship

• Crisis management process

• Site compliance

• Governance model in-place

• Lead region certified

Defined Process

• Proactive

• Recovery requirements are clearly understood

• Business Continuity Program (BCP) in-place

• Comprehensive strategies andplans across business units

Managed Process

• Reactive

• Knowledgeable about disaster recovery

• Disaster response plans are documented for some businesses

• Emergency Management Strategy developed

Initial Phase

• "Fly by Seat of Plants"

• Process unpredictable,poorly defined, uncontrolled

• Poor change management between incidentand recovery

"Unfocused" “Best in Class""Mature""Capable""Aware"10 2 3 4 5

To

lera

nce t

o R

isk

High

Low

Status: 09/16

2012 2013 2015 2016

50% 75%

TAPA AP Conference| HCM City | 06th October 2016

Page 21: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

21

Benefits of an Effective Security & Operational Resilience Program

Proactively identify the impacts on your operations

Effective response to disruptions and thefts in place

to minimize the impact

Ability to manage uninsurable risks

Encourages cross team working

Demonstrate credible response through

process of exercising

Enhance reputation

Competitive advantage; ability to deliver

21TAPA AP Conference| HCM City | 06th October 2016

Page 22: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

22

Conclusion

To sharpen your security and resiliency profile within the supply chain you should

Turn challenges into

opportunities

build a security & resiliency –aware culture

link security & ops resilience functions with

others

invest in a security & resilience

management system

measure your performance also by security

& resilience related KPI‘s

promote partnership within your supply

chain

make your ICT resilient

22TAPA AP Conference| HCM City | 06th October 2016

Page 23: OPERATIONAL RESILIENCE TURNING THREATS …...Security, Business continuity and Health & Safety management Site & lane assessments and audit program Innovations in technologies & tools

Thank you for

your attention

Business must go on !