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SUPPLY CHAIN RISK AWARENESS
WHY RISK AWARENESS?
Risk awareness is essential to weighing up the cause and effect of possible project risk, especially given 3rd party supply chain service providers not directly controlled by your organization.
CLIENT AND PROJECT SPECIFIC SUPPLY CHAIN ANALYSIS
Supply chain risk areas are identified and analysed, specific to individual client and project frameworks.
The findings are presented through a detailed risk workshop, including the presentation of relevant and recommended methodologies for the identification, management, and mitigation of the associated project risk.
SUPPLY CHAIN CONTROL TOWER MANAGEMENT
Risk management partnership between CIS and the project head, ensuring a supply chain ‘safety net’ is in place, stretching from administration through to on-the-ground delivery. Includes management of local government procedural requirements.
VALUE OF CIS’S SUPPLY CHAIN CONTROL TOWER MANAGEMENT
The Supply Chain Control Tower monitors and guides operational matters through accurate process screening, overseeing, and reporting on supply chain decision roll-out and execution.
SUPPLY CHAIN AUDITING
Using our Supply Chain Control Tower management processes.
CIS provides a full supply process audit. This ensures the project is correctly documented every step of the way, as per government regulation requirements.
BY ADMIN JUN 8, 2020 CASE STUDIES
CASE STUDY
CONTROL TOWER
(RISKS BASED ON PROJECT VALUE)
The control tower ensures throughout the project that all relevant supply chain and customs procedures are followed, documented, and filed from point of origin up to place of delivery.
Missing any important information or procedures, a project could face the following issues that will directly lead to costs and project delays that can be anything from a couple of hundred thousand to a few million dollars in additional costs to the project bottom line.
Customs Refusal of Cargo Clearance
If any necessary and crucial procedures are missed by the shipper, the client will be exposed to cargo that might be send back to point of origin. Customs might not accept the cargo or impose big penalties on these shipments on arrival.
To mitigate the delays, the customer will have to re-order and re-ship the cargo in the correct manner, as the original goods can be stranded in the country of origin for weeks, if not months before the disputes has been cleared.
Insurance Claims Disputes
Without the necessary checks and procedures along the supply chain the client will find it difficult to prove legitimate claims to insurance should any damages occur. Especially on sensitive cargo.
Documentation
The client will be held responsible if they cannot proof delivery, and final usage of the cargo. Documentation gathered and filed in the control tower process is a crucial part of any project.
CASE STUDY
BY ADMIN JUN 8, 2020 CASE STUDIES
CLIENT WITH EPC
(BASED ON FIDIC SILVERBOOK)
The client signed with an ECP (Engineering, Procurement and Construction) Partner expecting that all relevant supply chain matters will be covered by the EPC contractor in Kenya up to delivery at Site.
Factors to consider was that the project was fully exempted, and that the client was co-covering the supply chain insurance under the project insurance. The client also did not budget for any logistics support since the EPC contract was delivery up to site.
Due to the complex procedures with government entities in Africa in general the client engaged CIS to look at the relevant risk exposures in the supply chain that they might experience.
CIS proposed an offering of risk mitigation through a risk workshop, with the setup and implementation of a control tower to give the client full visibility and control over the supply chain. The control tower consisted of one senior project manager and 3 mid-level local consultants covering the supply chain from point of origin, local cargo clearing and dispatch, as well as goods receiving at the remote work site.
They were respectively positioned in the client’s office, the EPC freight forwarder’s office, and at the client’s site. CIS was able to give the client full visibility of all the imported cargo, by means of weekly cargo tracking reporting, as well as a weekly logics update to senior management and their relevant partners to track the overall progress of the project.
The CIS team also handled all the government specific shipment exemptions for VAT and all relevant duties, cargo bonds though the clients local insurer, and the subsequent closure of these bonds through a detailed paper trail process that is required to close the financial exposure to the client.
NOTE: THE EPC CANNOT HANDLE THE GOVERMENTAL PROCESSES ON BEHALF OF THE CLIENT.
The CIS project manager was also at hand dealing with more complex issues where government processes had an influence on timely deliveries. The information provided by CIS has enabled the client to do advance planning with the EPC. The EPC was also not able to take contractual advantages of the situation due to the full supply chain visibility on both the client’s side as well as the EPC’s side.
BY ADMIN JUN 8, 2020 CASE STUDIES
CONTROL TOWER
(RISKS BASED ON PROJECT VALUE)
The control tower ensures throughout the project that all relevant supply chain and customs procedures are followed, documented, and filed from point of origin up to the place of delivery.
Missing any important information or procedures, a project could face the following issues that will directly lead to costs and project delays that can be anything from a couple of hundred thousand to a few million dollars in additional costs to the project bottom line.
Customs Refusal of Cargo Clearance
If any necessary and crucial procedures are missed by the shipper, the client will be exposed to cargo that might be sent back to point of origin. Customs might not accept the cargo or impose big penalties on these shipments on arrival.
To mitigate the delays, the customer will have to re-order and re-ship the cargo in the correct manner, as the original goods can be stranded in the country of origin for weeks, if not months before the disputes has been cleared.
Insurance Claims Disputes
Without the necessary checks and procedures along the supply chain, the client will find it difficult to prove legitimate claims to insurance should any damages occur. Especially on sensitive cargo.
Documentation
The client will be held responsible if they cannot proof delivery and final usage of the cargo. Documentation gathered and filed in the control tower process is a crucial part of any project.
BY ADMIN JUN 8, 2020 CASE STUDIES
CLIENT WITH EPC
(BASED ON FIDIC SILVERBOOK)
The client signed with an ECP (Engineering, Procurement and Construction) Partner expecting that all relevant supply chain matters will be covered by the EPC contractor in Kenya up to delivery at Site.
Factors to consider was that the project was fully exempted, and that the client was co-covering the supply chain insurance under the project insurance. The client also did not budget for any logistics support since the EPC contract was delivery up to site.
Due to the complex procedures with government entities in Africa in general the client engaged CIS to look at the relevant risk exposures in the supply chain that they might experience.
CIS proposed an offering of risk mitigation through a risk workshop, with the setup and implementation of a control tower to give the client full visibility and control over the supply chain. The control tower consisted of one senior project manager and 3 mid-level local consultants covering the supply chain from point of origin, local cargo clearing and dispatch, as well as goods receiving at the remote work site.
They were respectively positioned in the client’s office, the EPC freight forwarder’s office, and at the client’s site. CIS was able to give the client full visibility of all the imported cargo, by means of weekly cargo tracking reporting, as well as a weekly logics update to senior management and their relevant partners to track the overall progress of the project.
The CIS team also handled all the government specific shipment exemptions for VAT and all relevant duties, cargo bonds though the clients local insurer, and the subsequent closure of these bonds through a detailed paper trail process that is required to close the financial exposure to the client.
NOTE: THE EPC CANNOT HANDLE THE GOVERMENTAL PROCESSES ON BEHALF OF THE CLIENT.
The CIS project manager was also at hand dealing with more complex issues where government processes had an influence on timely deliveries. The information provided by CIS has enabled the client to do advance planning with the EPC. The EPC was also not able to take contractual advantages of the situation due to the full supply chain visibility on both the client’s side as well as the EPC’s side.