mgt307a10

Note: The following problem is fictitious but employs names of, and news from, real organizations. The idea is to increase the reality of the situation, and to improve your awareness of various industries and organizations.

You are an operations analyst at Petroleum Products Corporation, a (mythical) refiner of crude oil with a product and geographic profile similar to Valero Energy Corporation.

Although PPC operates refineries though out North America, there is a concentration of facilities on the Gulf Coast. A primary source of supply for these facilities is foreign crude oil that comes from petroleum tankers that offload their cargo at the Louisiana Offshore Oil Port (LOOP) near Port Fourchon, Louisiana.

Due to the concentrated nature of the Gulf Coast refineries and LOOP supply source, there is growing concern about the vulnerability of PPC's supply chain to unforeseen events.

Your boss, the Technical Director, has asked you to conduct an initial analysis of the risks facing PPC's supply chain in the Gulf Coast region. Your report will serve as discussion material at an upcoming meeting of the operations steering committee (the top management team and the division managers of PPC's various operating facilities). Your job is to provide a valid, analytical framework for the managers to discuss risk at this meeting.

A few things to keep in mind as you prepare your report.

Critical to the success of your analysis will be to anticipate the questions that executives will ask regarding supply chain risk. These questions can be categorized into a few groups:

1) The nature of supply chain risk. What types of supply chain risks are we facing? What types of risk have others faced? Were it me, I'd be looking to procure at least 5 references that PPC's managers will perceive as legitimate when answering this question. I'd be headed to the www.businessweek.com, www.fortune.com archives, as well as NKU's business databases and indexes (especially Business Source Premier). Here's one reference you might find useful. Here's another one.

2) What are the consequences of poor supply chain risk management? Here is a synopsis of one study (this is a summary of a larger published paper by Hendricks & Singhal (2005) that can be found by searching the Business Source Premier data base thru Steely Library). Recent accounts of supply chain problems related to hurricanes might also prove useful. The October 3, 2005 issue of Fortune may be particularly useful in this regard since it did a special section related to Hurricane Katrina. Some potentially useful articles include: A Meditation on Risk, New Lessons to Learn, For Fed Ex, It was Time to Deliver, Risk is His Business, An Executive Risk Handbook. Some of these articles may prove useful for some for for addressing issues 1) and 3) as well.

3) What can we do to address these risks and prepare? Again, I'd seek sources similar to those noted above. Here's an interesting one. Here's one that relates specifically to your industry and competitor Valero.

Remember to fully cite your sources.

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