SECOR resilience

SECOR RESILIENCE helps you to objectively reduce supply chain risks in component development and procurement. Comparable assessment of the resilience of a component.

SECOR RESILIENCE rate provides support for component allocation and answers the question:

Which supplier offers the component with the lowest supply chain risk? 

Here is an example from an automotive manufacturer (OEM): When a component is put out to tender, the semiconductors are specified using SECOR SEARCH and defined in the specifications. At the same time, the resilience criteria are specified (see 2nd figure below), which are used in the evaluation of competitive bids.
SECOR RESILIENCE, as app on SECOR SaaS, helps the OEM to select the component with the lowest supply chain risk when making the award decision. At the same time, a Tier 1 supplier can use SECOR RESILIENCE to proactively optimise its offer in terms of supply chain risk and the requirements of the OEM’s component specification when preparing its offer. As shown below, SECOR RESILIENCE is applicable for components with and without semiconductors.
If the OEM decides to add a supply chain risk rate to its award process and communicates this to >150 suppliers, as a first major OEM did at the end of 2023, the framework conditions for awarding contracts will fundamentally change. Comparable to the introduction of the sustainability rating (S-Rating). The aim of SECOR RESILIENCE is to create a more robust and transparent supply chain for the future, from Tier 1 to the OEM as a team. It is expected that larger Tier 1s will use comparable RESILIENCE ratings when awarding contracts to their Tier 2 suppliers.

WHY SECOR RESILIENCE?

MITIGATING THE EFFECTS OF THE NEXT CRISIS

Reduction of the supply chain risk of a specific component, most economically integrated into the awarding process. The OEM compares the offers of different Tier-1s for a component (or a Tier-1 of several offers from Tier-2s) with regard to objective criteria for the supply chain risk. Similar functionalities or characteristics of several components/assemblies/components are evaluated in a comprehensible manner.

COMPETITIVE ADVANTAGES FOR THE SUPPLIER
WITH RESILIENCE CRITERIA IN THE OFFER

Suppliers (e.g. Tier-1) can use SECOR RESILIENCE to optimise the decisions regarding location, sub-suppliers, semiconductor type, material in general, … based on the RESILIENCE criteria in the offer to the OEM and thus offer a more competitive offer compared to competitors who do not use SECOR RESILIENCE.

SECOR RESILIENCE USE CASES

Which supplier offers how much supply chain risk at what price? A tabular comparison of the competitive bids based on the standardised RESILIENCE criteria facilitates the preparation of the decision document and the award decision.
Suppliers can easily optimise their offer through a prior RESILIENCE assessment and proactively compile all the necessary data and information for the OEM’s rating.
SECOR RESILIENCE has agreed criteria and their weighting as standard with experts from the automotive industry and the logistics sector. Optionally, it is possible to customise these for individual companies. This coordination leads to cross-divisional focussing within the company.

No company can tackle all components at once. Therefore, when introducing the rating, a definition is usually made using an ABC analysis.

A Components (priority 1): were/are in a bottleneck with production losses (focus 2020-2022)

B Components: in a bottleneck with adjustment of the production programme, resulting in DB losses (2020-2022)

C Components: Without impact in 2020-2022

THE MAIN FEATURES OF SECOR RESILIENCE

  • Objective criteria for assessing the supply chain risks based on the SECOR RESILIENCE criteria (see above), e.g. derived from the bill of materials (BOM), the production locations of various supplier levels (tier-1 to tier-n), limited raw materials (rare earths), sourcing strategy (single, dual or multi-source), commodity semiconductor vs. ASIC, semiconductor lifecycle vs. contractual duration of the supply relationship with the OEM.
  • Different rates depending on the production location, e.g. a supplier delivers components from Europe to China for final assembly or a Chinese supplier delivers to Europe.
  • The weighting of the SECOR RESILIENCE criteria can be configured individually for each component. Optionally, the six criteria can be RESILIENCE-programmed for specific companies.
  • Limited raw materials (rare earths) can be calibrated quickly due to changing framework conditions
  • Based on SECOR DATABASE and the commodity semiconductors of SECOR PLATFORM, ensures maximum efficiency
  • Motivates suppliers to make the supply chain as transparent as possible, so that this generally has a positive influence on the OEMs in the award process.

DISCOVER HOW BUSINESS ANALYSES
CAN CHANGE THE WAY YOU WORK

Before 2020 (Covid-19), the primary focus when awarding components was on costs, quality and time, i.e. capacity per week as well as SOP and EOP. In the meantime, other internal company ratings such as sustainability have been added. In the future, the first OEMs in the automotive industry have announced that they will include RESILIENCE Rate as an indicator for supply chain risks.

TAKE THE NEXT STEP

Would you like to gain your first experience with SECOR RESILIENCE?

Step by step, fewer risks in your supply chain…

With pleasure, we look forward to it! Please click here to register free of charge
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If you have any questions, please contact us directly at info@secor-sct.com
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