A Conversation with Tom Ramos, Director, Global Logistic Oversight Risk and Compliance
How is GM using technology to monitor risks in its supply chain?
We recently began using a supply chain visibility and mapping tool that provides a visualization of GM’s entire footprint, including our own facilities, our Tier I suppliers, and many of our Tier II suppliers. Using this map as a base, we can get answers to questions about supply chain risk by superimposing information like geopolitical events, hurricanes, water scarcity and other possible disruptions. With more than 200 incidents disrupting our supply chain every year, from earthquakes and floods to civil unrest and regulatory actions, it’s easy to see why robust tracking and visibility tools are essential.
What process do you follow after identifying a potential risk?
We have a dedicated team of employees who do nothing but conduct incident management across the globe, assessing thousands of alerts. When an incident is reported, this team determines whether the situation has the potential to affect GM’s tiered network. If it does, the team notifies relevant members of our supply base. At the same time, local crisis teams in each region help to mitigate potential supply chain interruptions that could cause production losses.
What’s an example of how this process works?
The 2017 hurricane season was an excellent demonstration of the climate and weather-related risks we manage. Our tool has a dedicated storm tracking capability that allowed us to prepare for the aftermath of Hurricane Harvey before the storm even made landfall. We used National Weather Service data to track the expected path and intensity of the storm. By overlaying this with our supplier tool, we could see which Tier I and Tier II suppliers, and even which specific part numbers, would be affected. As the storm matured, our crisis teams prioritized plant coverage for all parts, worked with Tier I suppliers to pull ahead shipments and encouraged them to do the same with their own suppliers. With these proactive efforts, we made it through the storm with no impact to production.
How does GM quantify a supplier’s level of potential risk?
There are two key metrics that we use. The first is a Location Risk Rating, which assigns a rating to suppliers based on their geographic location. If a buyer wants to source from a facility with a Red, or high-risk, rating, they must first establish a mitigation plan. The second metric is dependency, which focuses on understanding where our tooling is located, and which supplier locations supply which GM plant. This measure allows GM to better understand the impact a Tier I supplier disruption could have on GM's global manufacturing operations.
What future capabilities is GM building in supplier risk management?
We are always looking to achieve deeper tier visibility. We recently began collaborating with a third party to identify supplier relationships deep within our tiered network and identify risks at an unlimited number of tiers. While we don’t have financial relationships with suppliers multiple tiers deep, our goal is to understand where the supply base is located and what types of risks and issues may be occuring. We are also exploring tools that would monitor web and social media channels for potential issues that could affect our deep-tier supply base. Ultimately, we want to know what the emerging hot-button issues are, so we can act proactively.