Ulf Venne:
Hello everybody from sunny Cologne! The sun just came up while this introduction was happening, so it is great. As you see, we are talking today about people, process, and technology, and we will be, as you will also hear, a vital part of Schaeffler’s risk and resilience initiative from a technology standpoint. But it takes more than that to really create value for the organization, right? You need the people, you need the process, and all of that is something we will cover today. We’ve made this one hour because it’s a really vital topic, and there’s a lot to talk about. Even in one hour, Nadine is not going to be able to cover all of it, but we are trying our best. She unzipped everything she has into one thing, and therefore my introduction is very simple. Hi, we are Everstream Analytics, look at this screen. If any of these things are things that you want to achieve with your organization and haven’t yet, you should talk to us. If you are in supply chain planning, procurement, or logistics, we can probably help you with that. If you are one of the lucky ones that already has our solution and wants to expand its usage to drive even more value, well, Nadine is the right person for you today. That’s all I have to say. Over to you, Nadine.
Nadine Kiratli-Schneider:
Great. Thank you so much. Thank you for the introduction and hi from my side, just 70 kilometers away from you. I’m very honored to share our approach to building a resilient transport supply chain for Schaeffler. But before we jump into the session, let me briefly, for those who don’t know Schaeffler, introduce what we do.
Schaeffler identifies as a motion technology company. We produce high-precision components and systems for train, drive, and chassis applications, as well as rolling and bearing solutions. We essentially make things move, and with the current merger with Vitesco that you might have read about in the news, we not only want to strengthen our mobility business but also intend to become one of the world’s largest industrial and automotive suppliers. Maybe to present you with some facts and figures about Schaeffler before I highlight a few products on the next slide: We are a three-dimensionally organized matrix organization with central functions situated in our headquarters in beautiful Herzogenaurach, Bavaria—or better yet, Franconia, I have to say. You can’t tell a Franconian they’re Bavarian. So that’s very particular. We have our four regions: Americas, Greater China, Europe, and Asia Pacific. And of course, we have our three divisions: Automotive Technologies, Vehicle Lifetime Solutions, and Industrial, which are responsible for profit and loss business. This is exactly where the money is earned. We currently have 84,000 employees, and after the merger, we will grow to a 120,000-employee company. We are present in over 200 locations in over 50 countries, so we’re everywhere. After the merger, we will have more than 100 plants, meaning lots of operations to handle.
To highlight a few products on the next slide, just to give you an idea of where you find our products, they are basically in anything ranging from two-wheelers and trucks to industrial equipment, planes, cars, and windmills. So, chances are very high that you have been moved by a Schaeffler product by using one of these vehicles. The most prominent example is probably the bearing of the London Eye in London, with an outer diameter of six meters. We produce anything from six-meter bearings to very, very small bearings, all with high precision. Well, bridging over to risk management, the topic of today, our mission in risk management is to ensure that all of these great products can be produced on time and reach our customers on time. We do this by applying systematic and strategic risk management, all with a goal to keep the shipments that carry our components or our finished goods from A to B. From A to B could mean anything like components and raw materials from our suppliers to our plants, finished work-in-progress goods, or spare parts between our plants. It could be from plants to warehouses and customers. We look after everything that Schaeffler is freight responsible for, and we do this by focusing on three key ingredients or elements, which you see demonstrated here.
Let me use a few minutes to set the scene for this webinar and explain why we focus on these three elements. You see the top right corner; you see the first circle: people. You can’t do this alone. You can’t do this in a central or a local team alone. Risk management, especially in transportation, is truly a global effort. It requires collaboration with all our four regions and all our three divisions. I’ll dive deep into how we are organized, dividing the work in a few minutes. Then the second ingredient is process; once you have the people, they need to know what to do and what their role is. You need to make sure that you have a process in place that is pragmatic enough for people to understand it and live by it and stick to it. At the same time, it needs to be rigid, prudent, and detailed enough to survive any audit. Finally, technology: you cannot possibly monitor a supply chain or a network of Schaeffler’s size and identify all the risks that happen daily without technological support anymore. This is where Everstream Analytics comes into play, and I’ll also showcase an internal tool that we’ve built to complement the functionality of Everstream.
I hope to have set the scene, but before we jump into the first dimension of people, let’s briefly discuss the principle of the three-legged stool because this is basically the metaphor that we apply to risk management. All of these three dimensions that you’ve seen, we regard them as one leg of our risk management stool. The message is simple: to sit comfortably, you need all three legs. If one of them is unstable, too short, or starts to break off, it becomes difficult to keep your balance. If one leg breaks, you will eventually find yourself on the ground. The message is you must work on all three elements or legs at the same time not to lose your balance. I hope that at the end of this webinar, I have made clear why that is the case, why these things are integrated with each other, and that you start embracing this principle yourself. But without further ado, let us jump into the first dimension, which is the people dimension. I would like to cover with you three points: the setup of our global risk management, how we divide the responsibility in our three-dimensional matrix organization, and how we empower and train everyone involved in the network.
On the next slide, let us focus on how we set up the organization for effective risk management. You really need everyone in the organization. You see here a world map to demonstrate that the corporate risk team spans all of it. We are situated in Bavaria. We have then our regional teams in the Americas, Europe, Greater China, and Asia Pacific, and of course, our internal customer divisions: Automotive Technologies, Vehicle Lifetime Solutions, and Industrial. Starting with the corporate team—my team—we hold the ultimate responsibility for transport risk management. This means we are ultimately responsible for developing the process, setting the standards for it, and making sure we are audit-proof. It’s our responsibility to ensure that a process exists, is clear to everyone, and is adhered to by everyone. My team also leads the day-to-day conversation with Everstream, discussing things such as enhancement requests, feedback about tool functionality, and necessary user support that Everstream can provide. We issue tickets, you name it, and we also develop new ideas with Everstream for enhancing functionality. That falls under the category of tool ownership. I have someone in my team who’s the tool owner for Everstream Analytics. Beyond that, we also coordinate this entire global network that I’m presenting right now. This means we take the lead in identifying risks daily, and I will talk about the process in the next dimension so that you understand what I mean by this. Of course, we also take charge of risk reporting, providing anyone interested with an overview of risks, incident history, or a deep dive into a particular risk category, based on Everstream data, complemented with our own data. As the global lead of risk management at Schaeffler, it’s my responsibility to keep in touch with our regional and divisional leads to make sure we are on track and involve everyone.
That’s a good bridge to describe the tasks of our regional teams. In every region, we have at least one risk representative. I think in one or two regions we have 1.5 FTEs, depending on how much time people can allocate to risk management. But for sure, we have one go-to person in every region we can talk to. Essentially, they are our eyes, ears, and hands in the region on the local ground. They not only connect with local plants to double-check on the state of shipments and understand if a certain shipment is urgent or at risk, but they are also the connecting dots to our operational teams in the regions, in the plants, and to our local service providers. They essentially run operations and support any mitigation impacts on the ground in our regions.
Lastly, we have our divisions and internal customers. Essentially, the corporate and regional teams perform risk management in transportation on their behalf. They indicate to us their level of risk appetite, which means they tell us what kinds of risk categories to focus on in our daily risk screening and which risks we should look out for and have a plan B ready because they know it will hurt them in terms of value impacted, customer impact, you name it. And in essence, they are our eyes and ears and actually also hands in the region on the local ground, they not only connect with the local plans to double check on the state of shipments and understand if a certain shipment is urgent that is at risk, but there are also the connecting dots to our operational teams in the regions and in the plants and also to our local service providers. They indicate to us their level of risk appetite, so to say, which means they tell us what kind of risk categories to focus on in our daily risk screening and which risk we should look out for and have a plan B ready because they know it will hurt them in terms of value impacted, customer impacted, you name it. For one division, the risk appetite could be, “hey, take care of seaports because we have lots of C volume going around in the world”. So, we want you to watch port strikes so that we know if stuff is going to be late or if we have to divert to another region. It could be a regional weather situation leading to floods and the blockage of roads for road traffic.
And they are also the ones essentially approving our plan Bs that develop because as soon as you have a signed off plan B and the drawer, the moment risk hits, you can take it out and just go ahead without any further delay in response. And that’s what it’s all about in risk management – speed, transparency and collaboration.
Then next you might wonder, how on earth do we stay in touch with this global network? Well, if you look at this and as the house of supply chain risk management at supply chain at Schaeffler and supply chain management logistics, so to say, my global team is in the lead, so it’s the corporate transport risk management team. And you see in these different colors, the different stakeholders, the first three of our divisions, we also talk to our corporate transport provider management, our regions and corporate purchasing. We hold a number of regular committee meetings and the first one that you see blended in here is the weekly leisure fix with our client success manager from Everstream Analytics.
The happens once a week and besides the corporate team, so my team joining, we also invite our counterparts from our divisions, automotive technologies, lifetime vehicle solutions and industrial. And in this meeting, we basically follow up on topics such as tool enhancements, bug fixes, we discuss ideas for new functionality. So, anything related to the tool. And the reason we have our business partners in there is that our business basically pays the bill in the end, right? So, we need to justify the expenses that we have on tools such as Everstream Analytics, and in this way, we have very short communication channels to make decisions further enhancement very quickly. Then we have another meeting. So, once a month we meet with the entire global risk management network that includes the divisions, our corporate transport and provider management team, and our regional risk counterparts.
And in this meeting, we follow a standard agenda, we share any news and updates of any activities or projects driven by our corporate team. We review last month’s risk incident history and we discuss what went well in terms of reaction, what did not go so well, what can we still improve, but we also collect any ongoing topics from the regions to then include in the other meeting we have for instance with Everstream to give them some idea and some input from our regional people on the ground. Lastly, it is a great platform for sharing best practices. The last meeting, well there’s many more, but this is the most prominent ones. The other essential meeting is a weekly Azure fix with our colleagues from the supplier risk management team and purchasing. We work also with Everstream Analytics to monitor manage supplier risk, and my team focuses on the transportation risk side and obviously occasionally there’s common incidents that you have to review together and come up with a reaction in a holistic and concerted way.
So this happens on a weekly basis and sometimes on a daily basis and multiple times a day if we have something going on and together we review. Then also tool enhancement requests so that we don’t come with the same ideas into this meeting so that we’re really speaking with one voice to have stream analytics. So the key message here on this slide is regular and systematic communication really is key. You must engage people, or they keep forgetting. With all this operational haze going on, I would like to conclude the people dimension with the next slide because the final aspect is training and qualification. You need to make sure that you empower the global risk management network through a portfolio of training and engagement activities. So some people must only have a general awareness of transport risk management such as purchasers and salespeople for instance.
So purchasing, they have their own risk management process governed by the purchasing team, but it’s also good for them to know that there’s also a team working on transport related risks and salespeople might want to know about transport risk management as well as supplier risk management. In fact, in case customers are getting nervous about a certain event that they have read in the news and the sales team can basically tell them, don’t worry, we have processes in place. I will investigate. I have a person to go to and I will find out without further due. And here we are currently developing a common web-based training with our purchasing colleagues that will probably be published in October and November.
Then another set of people need to know in detail how the process works and understand their role in the risk management process regarding transportation. And for this we’re developing currently a second training which will train our people on the details of the transportation risk management process. And the target group for this is of course anyone in the global risk management network, anyone who will join the risk management network, but it’s also plan managers or production planners that will need to do this training. Why not only on a day-to-day basis, but they also need to know what is this risk process, what is my role in it? But in case audit comes by external audit or internal audit, they need to be able to describe the process and they also need to demonstrate that they know whom to involve, where to go to address the questions to the right person.
Ideally they have the answers, but you know how auditors are. They are sometimes very nitty gritty in asking these questions and then you make sure to better make sure that your people know what the process is and where to go to. Last but not least, also Everstream is supporting its users with a bunch of tutorials. They have actually recently launched the Everstream University that has plenty of videos, webinars on various topics ranging from the CS Triple D announcement, and I believe that it is in further development. So in essence, what you need to take from this is that it’s essential to provide a variety of formats because different people like different things. Some like click instructions that you can do on your own timing. Some people like to tutorials videos, some web-based training. You get the gist of it. So vary the formats to cater to different type of learners and also to mix up the dynamics a bit.
And what is also very important, that’s the second important point, is that you need to verify and update these trainings regularly because sometimes legal and audit requirements change. So we need to integrate this. So this concludes the people dimension. Let’s jump into the process. I will like to cover the risk management process itself and as well as the contingency planning. So let’s jump right in. You will see that we follow the generic steps of any risk management process. It starts with identifying risks in the first place. Then you need to assess the impact of the risk for your supply chain, and you need to also then respond and mitigate afterwards. You need to evaluate how did you respond and mitigate to learn and include this in the new cycle. We have two horizons that we do this with the short-term horizon. So that’s anything that’s happening in the next three months.
How do we go about on a daily basis, we do daily screening using everstream. So there’s network alerts that we receive from Everstream using a set of configurations that are catered to our needs. We get three times a day a network digest or a newsletter with alerts that hit our network, and we can also set customized notifications. What we would then do with this identified risk is assess the impact, and we would do this by checking any active shipments on any risky lanes. And so if you blend that in briefly, so we would check active shipments, and at the end I will briefly show you the power BI dashboard that we have built in order to assess the impact that current means a functionality that we don’t use in everstream, and we check whether our transports ETA will be violated. So the estimated time of arrival, if that is the case, we will with this very dedicated information only go to the affected plans and ask them to check whether they can handle the risk.
And then basically the risk response follows one of three strengths either. Either they’re able to accept the risks by either changing the production schedule just because they know they can do something about it or they take from their own stock. Second option is they tell us, “Hey, we can’t handle this. Please help us speed up the post carriage once the stuff comes in delayed, make sure it’s express delivery”, or they ask us to help organize air freight so the stuff arrives from the supplier or another plant. The same steps we go through for the mid and long term. We use slightly different sources. So, for mid and long term. So anything beyond three months, we use three sources, Everstream analytics. So if we see any alert patterns, so the Panama Canal, it was like for months, you saw that there were alerts coming in, you get the idea how something is going on.
It’s webinars, situation, briefings, you name it. We also talk to external experts, and we also use our internal network. Then for assessing, we do the same thing. We overlay the information about where risk is looming, we overlay it with our LAN network and check the impact on our top lanes in terms of absolute and relative impact. And then in case we say, oh, we have to do something about this, we’ll come up with a plan, align the plan with our division, our business, align with our transport management and provider management, and then finally prepare communication plan and the measures to mitigate the risk. So I talked about contingency planning at some point, preparing for risk, and I would like to briefly show you the templates that we use to identify risks that are most probable and impactful for Schaeffler. So on the left-hand side, you see the risk matrix with a Y and X axis level of impact and probability for currents.
And what we do is we plot all the listed on the right-hand side risk categories that Everstream provides us with. We plot those ones in the matrix to get an idea of any very certain and disastrous events that we have to prepare for. And to give you an example, I highlight two things. So category 12, which is waterway disruption enclosure. You all might take from the news that there is, well there’s territorial conflict in the South China Sea between various parties, over territorial, over resources, and it’s possible no one knows how likely it is, but if it happens, it’s disastrous because it’s the main trade route in the world. So this is something that we would definitely want to prepare for. And another example is category number three, tropical cyclone. We know from briefings with everstream that the hurricane season will be very intense, and hurricanes become more frequent along the US East coast and Mexico, so you also want to better prepare for it.
Preferably you use objective data to populate this risk matrix, and this year we’ll be able to use everstream data to pre-populate this matrix based on the severity score that everstream gives us and the number of these risk categories and that we cite with divisional and regional information. And this will be updated yearly and distributed to everyone so that everyone knows how and what we prepared. Then preparing for risks is one thing, but taking note of what is happening and impacting your supply chain currently is another. So for that purpose, we have set up a global risk register. So it’s essentially a risk log of everything that’s happening right now. And this is administered by my central team. It’s updated daily, and we use several columns I want to explain to you.
It’s small for a reason. You don’t have to know the details in there, but the columns are important. So you see on the right-hand side the five key elements that we track. So first of all, the first two columns are reserved for unique identifiers. So we not only have a Schaeffler ID that we track, so one through we are at 160 plus now, and we also use the unique web codes from Everstream so that at any point in time we can click on the link and it takes us to the risk information everstream. Then the next two columns are reserved for taking note of when the issue was raised, so the calendar week and dates. And then the third point is all about accountability. Because we’re a team of four people, we have vacation, we fall sick. Sometimes someone cannot join the morning screening because of conflicting appointments.
So we need to make sure that we write down who is raising this risk, who has identified it, who takes care of triggering the network, informing people so that we can go back to this person, ask for more information for transparency reasons. Then what is also important is that you keep track of the risk attributes itself. So we have a few columns reserved for the risk headline that Everstream gives us. So it’s a verbal description of the risk itself. Let’s say eight air traffic control union threatens to strike across France on April 25th. That’s the first risk that we locked. We also write down the region where it originated so we can easily filter in the table and see which regions deal with the most risks. Also for reporting reasons, we also recently started to note down the mode that is affected.
So is it the pre main or post lag, and is it road, air, sea or rail? We also note down the risk category. So in the first line it would be aviation worker strike also for reporting and analysis purposes, severity is also part of it so that you get a bit of an idea what kind of risk incidents do you track? Is it really the minor stuff or is it really the big stuff that’s impacting active shipments? Last but not least, the major portion of the table is for risk administration purposes, internal risk administration purposes. So we note down things such as is a mitigation plan, so is something needed? So does someone have to do something and what needs to be done in order to form a response? And it could be that it’s not applicable, which is the case for most of them.
I see there was one blank spots, but this is exactly the place where we would bring it all together so that if any auditor or any top management stakeholder would come to us and ask us, Hey, what is happening in our network? We can do the analysis and give information about what happened. We also a note if there’s a contingency plan in the background and also we note down what’s the feedback coming back from our network. So let’s say we know about a port strike in Hamburg, we talk to our European colleagues. Any impact on shipments? Are you hearing anything on the ground? If they say a negative, everything fine. This will flow into our notes column here. So we started this in April only, and we have since then more than 160 risk registered.
It’s quite sizable I would say. And so far, I checked the status a few days ago when I submitted the slides, about 120, were close. So to see that there’s still some maturity, some work that we have to do on the people that I mentioned in terms of discipline for people to really feed back what is the status on several risks. So again, three-legged tool, principle, the process works, the tools that we use to fill this risk register works, but maybe the people, it’s a new dimension, it’s something else in addition, they have to do. So you have to provide proper training and hence a few slides. Previously I showed you the training that we’re developing. That’s part of it.
Okay, so now that I’ve talked about the process that we go through, how we prepare for the most impactful and relevant and probable risk and how we keep track of them, I think you really want to know how we tackle some of the more recent events. So I brought three examples with me. So this one might be known by some of you depending on where your operations sit, but it’s Hurricane Debbie. That was I think two, three weeks ago, at the beginning of August I believe. And Hurricane Debbie basically led to the closing of the port of Savannah on the east coast of the United States and to reduce operating hours in Charleston. So what did we do to identify that this risk would be hitting us? Well first of all, everstream analytics provides you with a trajectory and landfall projections, and that’s indicated by this little funny speech bubble.
There’s even a more detailed view. If you click on a different view, it will show you the timestamps when the eye of the hurricane is expected to be where. So it’s really near to real time or real time information about weather updates. And we also at some point receive from everstream the notification that there would be port closure in Savannah. And we also then investigated with people on the ground and found out that Charleston actually said they would reduce operating hours with this information on the assess stage, we would then check for potentially affected shipments coming into the ports or going out of the ports and look at which shuffler plans are behind it. We saw at this point in time that there would be receiving plans in the region Americas itself, but also in the other four regions. And with this information about the duration of foreclosure, the reducing of operating hours in Charleston, we could dedicatedly inform the affected receiving plans.
And basically, what they did in the response stage, they would run checks for affected raw materials. If you blend that in, affected raw materials, if there’s real production and customer demands behind the material, if there’s any open customer orders and if they have available stock. And the outcome was that plans told us, listen, we can handle the risk. No need to do anything. We are dealing with this ourselves, no needs for air freight or speeding up. So the benefit here is clearly that we avoided special air freight, which is helping us to keeping costs low and also work on the CO2 emissions, which I’m also responsible for as the global lead for sustainability and transport. And we also safeguarded customer satisfaction at the same time. So at the end check that risk was taken care of and we actually did due diligence and made a round.
So my team called all of the production planners and schedulers and checked with them, did you have a problem or not? And in the end it was really negligible. Of course it was here and there, difficult to accommodate for this, but we could avoid any big repercussions from Hurricane Debbie, I hope that you stay safe. So if Hurricane Debbie hits one of you, I hope that you were safe, your families were safe. So I’m of course talking about transportation risk management. I know of course that with Hurricane Debbie there’s other stuff a danger as well. So keep safe, everyone in this stormy season is more to come. I think. Let’s go to the second example, and this is one of my favorites because it goes in the mid-long risk management section. So we have here the situation that since last year April, we got continuous and frequent alertings about the situation of Panama Canal worsening in terms of vessel waiting times and the increase of passage fees.
Why was that? Because of the drought in Panama. So it didn’t rain in December 20, since December 2022. And that led to a problem with the operations of the canal because not many of you might know this, the Panama Canal does not operate on ocean water, but it operates on freshwater supply that’s pumped back and forth from two adjacent lakes next to the canal. And this freshwater supply also was important for the people living in the area. So from April to I believe beginning of June or something, we monitored the situation and we actually saw a clear trend for a higher probability for increasing waste of vessel waiting times and transit fees in 2023. With this realization, we checked for potential in the assessed stage, we checked for all potential effective shipments in the sense we checked what volume is going through the pandemic now, where is it going to?
And then we also consulted with the service providers, don’t we have any other route except for the Panama Canal to supply our plants in the US for instance. And they offered us a few solutions and with this solution and also after alignment with our transportation management head, I went to top management, briefed them about the situation, also briefed the decision makers, and we got approval at the response stage to stepwise phase out our shipments from the Panama Canal. Today, a bit more than 50% of the volume initially going through the Panama Canal is rerouted to other ports. So the benefits are even actually that for those more than 50% of containers that are out, we have a lead time reduction achieved because of the lead time reduction. We have net savings. Why is that? Because you have less working capital on the ship. We have avoided special freight due to vessel bathing times.
The Panama cannot go up again. Some plants might get nervous order special freights. We have in general lower risk exposure. We safeguard customer satisfaction again and we also are in line with our sustainability targets from the climate action plan of Schaeffler of reducing fresh usage. So it’s really a win-win-win situation. Which brings me to the last example number three. This is the Canada rail strike. You might remember vividly that was I think two weeks ago, one and a half weeks ago maybe last week. And there basically was a threat for shutdown of all rail traffic from ports to our production plans because can rate strike was looming. So we identified again same thing. Everstream gave us real time information about strike developments and also the strike announcement and notification came in in time so that at the assess stage, same thing, we could check for potentially effective shipments, we could again consult our service provider if a moat switch from rail to truck is possible.
With this information we went to our receiving plans and at the response stage they did the same thing. They ran effective material checks, production demands, and the outcome was that some plans, not all, some could deal with the risk and some plans actually ask us to make a change from a rail to truck. In the end, the strike was called off and we could revert the decision. But another benefit was that in any case, we avoided special freight and we safeguarded customer satisfaction. So this concludes the process part and we are in the finishing stages already to relieve some room for questions still at the end, let’s focus on technology and this is exactly where Everstream comes in. I would like to briefly show you how Everstream Analytics helps us as our digital 24 7 employee. And I would like to show you also the complimentary tool we built based on Power BI for assessing any active shipments. So let’s jump right in.
First of all, this is when you log into Everstream Analytics, this is more or less what you see. It’s a wealth map with lots of donuts we call them and triangles. The triangles basically are the risk alerts going on. And the donuts are basically our facilities, ports, airports, you name it with different color coding, green, orange, red, green means low severity, the orange means medium severity, and anything red means high severity. I’m not telling you from which date this is; my team would probably guess from 2023 or 2024. This was looking at the risk pattern here, but that’s just for confidential reasons. And what you also see here, I toggled in a lane like what is it from Europe through the Mediterranean Sea, red Sea and then going all the way to Singapore. And basically, this is how lanes then are depicted.
You really see then which part of this is marked green, which part is marked orange or which part is marked red. I can tell you as much because we’re all affected that red means the Houthi rebels shooting at cargo ships like crazy and that’s why it’s red. So the next question you might have is, okay, so why do you still go through Suez Canal? Well, this is static, so it does not show us our actual shipments. That is enhancements that we are currently discussing with Everstream. So as sets, Everstream analytics supports us in daily screening and identification. But before you can do that, you need to do some work. There are a few inputs that you have to give to Everstream and its information about the geolocations of suppliers that you want to monitor of plans and locations you want to monitor or your plans in that case, any ports, airports, rail station warehouses from a logistics point of view.
And based on this information, the lane network will be set up and uploaded to Everstream. What you then get out of it on the output side is real time and AI based monitoring and customized risk, all alerting. How does this work? In essence, Everstream is using, and maybe this is even updated now or can correct me at some point if I’m wrong, but basically there’s three sources they use. As far as I understood it’s the DHL company supporting the network. They’re everywhere, right? They know if something is going on that’s put into this monitoring. There’s open source, any freely available source on the internet and big risk institutions and organizations. But probably if you want to know more, you can get that from Everstream. And based on that, there’s a filter applied. Anything that is sticking to our network and that’s relevant to our network, will be given to us as a customized risk alert.
It also allows us incident sharing and feedback requests. That is a function that we’ll soon going to launch, and we can also generate our standard reporting. So, in a nutshell, summarizing the benefits and it Everstream really is a new source, so to say that is verified and consolidated. It only gives you contextual supply chain relevant information that is important for you to understand and to decide do you have to do something about an event or not. So it’s broad coverage on ground coverage, many different sources and verified it’s 24 7 live near to real time coverage. I believe also that Everstream is working on that and it really saves you time and speeds up the process. It frees our time to do value adding things like. And that’s the second to last slide I want to show to do things like this. Develop complementary internal tools based on Power BI in this case to assess the impact on our active shipments.
In essence, what you see here is a Power BI dashboard that uses shipment data that our LSPs are supplying. We use SAP material numbers to match our material number level. It’s an accessible user interface. I can guarantee you if I give this to you and tell you please assess if on lane X to Y we have active shipments and we have to worry about a port strike. You would be able to identify active shipments because you would type it into one of two boxes. Port of departure, port of destination. You would have to know the port code for this, either airport code or seaport codes and it would immediately spit up the active shipments. It would give you the eta. So it’s a common and objective database for us to assess whether or not a risk is relevant for us. Before our team existed, that was not the case, and everyone panicked if there was some news about foreclosure or whatever because no one knew what to do.
And now since last year, January, we are in very good shape to immediately within split seconds and identify whether we are impacted or not. Okay, let me conclude and then open the floor for questions. Key takeaways? Well, first of all, you need to understand for whom and why you’re doing risk management for, you must listen to your internal customer. You might not like some of the things they say because they might not immediately understand. Why do we need a tool like Everstream? Why do we need a team? Why do we need this? But then it’s your job to explain to them what is the benefit. So we supply chain leaders need to make sure the business understands our value add. You need to involve and keep engaging your internal customer from the get-go. You need to also the third point, invest in a network of believers and doers.
People who side with you and will work operationally put their hands in the mud to get stuff done. And then the fourth point, this is super important. There’s a reason why I presented the technology dimension last because technology follows process not the other way around. And regarding that, data quality is super important. You cannot map your network if master data is not set up correctly. And last but not least, start somewhere and then keep improving. Keep evolving. This is what my team essentially did last year. January, we had zero transportation, zero risk management knowledge and this is what you see after, let’s say one year of very hard work. That concludes my talk and I’m happy to receive any questions if there are any.
