global supply chain: managing risk and maximising opportunities
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Dr Patrick Dixon Chairman Global Change LtdFellow, Centre for Management Development
London Business School
Managing risks – maximising opportunities
Patrick Dixon is Chairman of Global Change Ltd, Author of 15 books and has been ranked one of the 20
most influential business thinkers alive today (Thinkers 50)
Global Supply Chain: Managing risk and maximising opportunities for
Danish Wind Energy (2011)
500 videos of keynoteswww.youtube.com/pjvdixon
Over 4 million views
www.globalchange.com14 million unique visitors
Supply Chain Issues
• Rise of new competitors• Supply of components to other regions• Maintaining competitive presence• Mergers and economies of scale• Joint representative offices• What should industry look like in 10 years?• What steps needed to make that happen
Wild Cards: Risk Management
Low probability, high impact events
$40 TrillionGreen Tech
Boom
120,000 terawatts of sunlight /day7,000 times total power use
Why Biofuels Are No Answer
A6 – 85 door components50,000 product combinations
Gold standard online : 6pm 10am
Gold standard:10am orders for 3pm Delivery
Anywhere in same country
10am orders for 3pm Delivery
ECONOMY OF SCALE
Chance of 2 in 24 people sharing same birthday
Chance of 2 in 24 people sharing same birthday
50%
Chance of 2 in 30 people sharing same birthday
70%
Chance of 2 in 50 people sharing same birthday
90%
Chance of 2 in 57 people sharing same birthday
99%
Aerospace Industry
• 5,452 mergers and acquisitions• $579 billlion• 1988-2010
Supply chain can be smaller than number
of manufacturers eg car seats
• Headcount reduced in purchasing• Bigger negotiating power
Why manufacturers are consolidating suppliers
Supply Chain
• Focal point is wind turbine suppliers• New Focal point will be utility co / developer• Transfer away from private equity investors
and government grants• Wind turbine manufacturers become suppliers
Why we expect consolidation
• Economies of scale in– Production– Marketing– Research and development
• Developers and manufacturers already consolidated 2nd level inevitable
Eat fast or be eaten
by a giant
Consolidation towards optimum size
Supply Chain Issues
• Rise of new competitors• Supply of components to other regions• Maintaining competitive presence• Mergers and economies of scale• Joint representative offices• What should industry look like in 10 years?• What steps needed to make that happen
Patrick Dixon is Chairman of Global Change Ltd, Author of 15 books and has been ranked one of the 20
most influential business thinkers alive today (Thinkers 50)
Global Supply Chain: Managing risk and maximising opportunities for
Danish Wind Energy (2011)
500 videos of keynoteswww.youtube.com/pjvdixon
Over 4 million views
www.globalchange.com14 million unique visitors