As part of the MSc Logistics, Supply Chain & Project Management, Kevin Mc Cormack, visiting professor from NC State and the University of Oklahoma, USA, and president of DRK Research came to SKEMA for three days of teaching on the hot topic of supply chain risk.

Almost every year since 2000, there have been catastrophic events (9/11, SARS, Bird Flu, Hurricane Katrina, the global economic crisis and now Iceland’s Eyjafjöll volcano) that have impacted people’s lives and supply chains to the tune of billions of dollars. Added to this, globalisation’s further development has (over-) extended supply chains and exposed vulnerabilities: now many companies are nearshoring rather than farshoring.

Supply chain risk has been emerging over recent years to take on a central role for supply chain managers and companies.

“This course has alerted me to the importance of understanding risk as a supply chain manager,” Zu Feng Li, an MSc Logistics student from China explained afterwards. “Before doing this course, risk seemed like a small issue, but if you don’t take it seriously, it can destroy your business,” he added.

Prof. McCormack gave MSc Logistics & Supply Chain students three days of classes to get to grips with this new discipline and learn how to use a newly developed tool: Risk Simulator, a DRK research software application that diagnoses –and even predicts– risk in the supply chain.

Users of Risk Simulator map their portfolio of suppliers according to the risks associated with each. The risks are typically environmental (flood, earthquake), strategic (company is too big / small), HR related (unionised workforce), financial (health) or performance related (quality of service).
On Day One, SKEMA students were introduced to the concepts of business and supply chain risks, examining best practice companies that have become more resilient enterprises through aggressive adoption of formal corporate programs, such as Shell, Dow Chemical and Boeing.

On Day Two, students explored the supply chain dimensions of extreme events such as a hurricane, terrorist attack or pandemic. They assessed and analyzed the risks presented by environmental factors and developed ways to reduce the impact of these major events. 

On Day Three, a full day’s course on supply chain risk mapping tools and techniques was provided. It specifically focused on the Risk Simulator and analytics of DRK Research, which has created a framework and process to better understand the drivers that create supply disruptions and mitigate the risk more proactively. This framework and process consists of a set of disruption predicators developed through several years of research and experience with global supply chains.

“I am extremely pleased that Prof. McCormack visited SKEMA to introduce students to the state of the art tools to map and manage supply chain risk. Many companies lack sufficient market intelligence, skills and information systems to effectively predict and mitigate supply chain risks. Having attended such sessions will provide a distinct advantage to SKEMA students in the employment market, explained Marie Koulikoff, director of the MSc in Logistics & Supply Chain Management at SKEMA Business School”.

Nicolas Rubiano, a participating student explained: “We all know there are risks but we tend to underestimate consequences and the potential impact on our business. This course gives students the tools to mitigate risk by managing and planning. As future managers, our decisions will take into account these variables, creating a more secure business environment. This was a proactive type of class where we benefited from the expertise of Prof. McCormack and the way he addresses the topic to make an exceptional course.”