Risk Intelligent Supply Chains: How Leading Turkish Companies Thrive in the Age of Fragility, 1st Edition (e-Book) book cover

Risk Intelligent Supply Chains

How Leading Turkish Companies Thrive in the Age of Fragility, 1st Edition

By Çağrı Haksöz

CRC Press

290 pages

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Hardback: 9781466504479
pub: 2013-04-02
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pub: 2018-10-08
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Description

The Turkish economy is very dynamic and growing at phenomenal speeds. For instance, Turkey’s first quarter GDP growth rate was 11 percent in 2011. This growth brings its own risks and benefits. The lessons learned from surviving and thriving in such an environment can be applied to supply chains in any country. Packed with interesting and timely examples from industries such as automotive, airline, and manufacturing, Risk Intelligent Supply Chains: How Leading Turkish Companies Thrive in the Age of Fragility presents strategic insights from various leading Turkish companies regarding their management of supply chain risks.

Çağrı Haksöz brings the risk intelligent supply chain (RISC) concept to life for the first time. It answers the question of how to become a risk intelligent supply chain. He proposes the I-Quartet Model with four essential roles "Integrator, Inquirer, Improviser, and Ingenious," that any supply chain network must play to become risk intelligent. The book also presents never-before-published cases and practices of leading Turkish companies that thrive globally in the age of fragility with their supply chain risk intelligence.

While providing real-life examples, the book also shares insights obtained in various scientific disciplines. It provides not only an industry focus but also details numerous industry approaches, analyzing their similarities and differences in a manner that allows each industry to learn from the other.

Reviews

"This is an amazingly timely and lucidly written book focusing on a topic of extreme importance. Even though this book is dealing primarily with Turkish industries, it is a must-read for supply chain specialists anywhere in the world."

—Michael L. Pinedo, Julius Schlesinger Professor of Operations Management, Leonard N. Stern School of Business, New York University

"Like a great classical composer, Professor Haksöz masterfully scores the four necessary voices of evermore critical risk intelligent supply chains (RISC) through his innovative and actionable I-Quartet Model--Integrator, Inquirer, Improviser, and Ingenious. Supply chain executives, take note!"

—Brian W. Hagen, Ph.D.,Managing Director of Decision Empowerment Institute

"Through a number of fascinating case studies of some of Turkey’s most successful companies, this book offers important new insights into how to best manage supply chain risk in these times of global uncertainty."

—Fatih Birol, Ph.D.,Chief Economist and Director of Global Energy Economics, International Energy Agency

"Çagri Haksöz has written an important and original book. Risk Intelligent Supply Chains is a pioneering study that clearly elucidates the interrelated issues of risk and supply chains. In this timely and well-written book, Haksöz competently shows how leading Turkish companies manage risk in their supply chains. Çagri Haksöz combines a deep understanding of supply chains and Turkish industry to produce an outstanding book that illuminates both theoretical and implementation questions applicable to a wide cross-section of industries and companies world-wide."

—Ömer S. Benli, Associate Dean, College of Business Administration, California State University, Long Beach

"This is an excellent and thought provoking book. Çagri makes a compelling case for why top management should proactively manage supply chain risks to survive in a global and intensely competitive market. The operationalizing of the concept of "risk intelligent supply chain" is very clear and rational and provides a framework that managers can use to develop supply chain risk management capabilities. The case studies of Turkish companies provide actionable takeaways in managing supply chain risk. It is a must read for practitioners and academicians."

—Vinod Singhal, Brady Family Professor of Operations Management, Scheller College of Business, Georgia Institute of Technology

"Risk Intelligent Supply Chains is a thoughtful and timely book dealing with the topic of supply chain risk management in the context of emerging markets, interspersed with compelling data, metaphors, examples and case studies. Professor Haksöz explains the sources of supply chain risk in easy-to-understand terminology, and postulates that supply chains must be "risk intelligent" to be sustainable and resilient over the long run. He describes his I-Quartet Model of four types of roles that companies in supply chains must discharge in order to be risk intelligent--as an Integrator, as an Inquirer, as an Improviser, and as an Ingenious risk taker. This strategic framework is thought-provoking and worthy of reflection by supply chain strategists. He presents rich case studies of three Turkish firms at different stages of the supply chain in the tire industry showing how these companies have built risk intelligent supply chains. Kordsa Global, with 35% worldwide market share in nylon 66, manages a network of factories and distribution facilities across nine countries. Brisa is an award-winning Turkish manufacturer of tires in a joint venture with Bridgestone Corporation. AnadoluJet is a low-cost Turkish airline with a unique hybrid model, as opposed to point-to-point or hub-and-spoke models, borne out of analysis of international and domestic passenger flows in Turkey. In presenting his thesis and field research, Çagri Haksöz tells us insightful stories about managing risk in supply chains in emerging markets. The case studies and ideas presented in this book will be useful not only to managers and business students in Turkey, but also to those in other emerging markets and MNCs seeking to enter such markets."

—Vishal Gaur, Professor of Operations Management, The Johnson School, Cornell University

"Professor Haksöz has made a strong contribution to the study and practice of risk management. He presents a coherent framework for approaching the myriad risks faced by enterprises competing in an increasingly interdependent global marketplace. The analogies he draws between adaptive supply chains and natural ecosystems display his profound understanding of these complex processes. The connections to art, music, history and philosophy are similarly insightful. Finally, the examples of I-Quartet in practice at leading Turkish companies provide concrete context for application of his theoretical model. Risk Intelligent Supply Chains is an excellent resource for students, academics and practitioners."

—Seth Hoffman, Vice President and Chief Compliance Officer, American Investment Services, Inc.

"Supply chain management is one of the key concepts that improve the competitive advantage of a company substantially. Moreover, it is one of the most critical areas in management which determine the success and failure of a company in today's highly competitive and volatile environment wherein information moves very fast. Companies have to find ways to improve customer services while at the same time bringing down costs. Corporate managements also need to work on risk management issues throughout the company involving all the operational processes and financial issues. This book introduces Risk Intelligent Supply Chain Model (I-Quartet Model) which I found very applicable and useful. The model is explained in detail throughout the book and various roles that a risk intelligent supply chain plays under different conditions and their interrelations are examined. These four roles are; Integrator, Inquirer, Improviser, and Ingenious which are explained in the book in a very innovative and practical way. Last part of the book consists of case studies from Turkish companies. This part is written in an interview format which improves the clarity of the concepts. Last part also helps the reader to familiarize himself/herself with various industries covered in the book. I recommend the book to all practitioners."

—Zafer Kurtul, CFA, CEO and Board Member, Sabanci Holding, Turkey

"There are lots of books and proceedings on supply chains. But this book is different in the sense that it brings the concepts of fragility and resilience to the attention of scientific community. It answers the question of how to become a risk aware supply chain. I really enjoyed reading this book and strongly recommend it for everyone working in this field."

—Ihsan Sabuncuoglu,Professor and Chair, Industrial Engineering, Bilkent University, Turkey

"While global corporations have been snatching Turkish executives, to tap into their expertise in dealing with geostrategic fragility, Mr. Haksöz finds a way to analyze their innovative techniques, to develop a unique model for risk intelligence. As an executive, managing US, Turkish and Indian operations, I find I-Quartet model appealing to emerging as well as developed markets."

—Ilhan Bagören, CEO, Telenity, Inc.

"Coming from an operational and quantitative background, I found Çagri Haksöz's original look at strategic supply chain risk management revealing, informative and full of actionable lessons. Risk Intelligent Supply Chains with Turkish backdrop is captured vividly and skillfully, bringing together as disparate and diverse areas as history, art, nature, politics, literature, music (my favorite), and of course, business. Breaking away from the books that focus on one thing at a time, Çagri's observant mind and his cross-cultural upbringing produce us a creative way of integrating ideas, research, teaching, and arguably more importantly, practice. Reading the refreshing, Charlie Rose style conversations with executives, I no longer wonder why Turkish economy is thriving at a time and in a region where crisis and stagnation are the norm, showing the underpinnings of the good old method of achieving prosperity, one company, one sector, one citizen, at a time. In fact, I would argue that Çagri's book is a counterexample to the impossibility of teaching wisdom: He achieves the impossible masterfully by distilling the wisdom of risk intelligent supply chains for the rest of us!"

—Erhan Kutanoglu, Associate Professor of Operations Research and Industrial Engineering,

The University of Texas at Austin

"Haksöz's book is a good reference for risks in supply chains and addressing these in real-life. The book has two main sections: theory and practice. The practice section has the refreshing approach of presenting interviews with supply chain executives and thereby provides us with unfiltered information that cannot be found anywhere else. This approach and information both differentiate the book from others. The book focuses on supply chains of companies headquartered in Turkey. Hence it is relevant for professionals working at or with Turkish companies or in other emerging markets."

—Metin Çakanyildirim, Associate Professor of Operations Management, Navin Jindal School of Management, The University of Texas at Dallas

"In a quickly getting smaller world with intense and complex relations between companies and suppliers, and partners, the largest risk is not to have the intelligence of risk. To understand all dimensions of risks in a complex supply chain and to manage them -while taking care of financial, physical and geographical conditions- now needs Risk Intelligent Supply Chain (RISC) mindset. In the presence of intense data flow, today's world now has more unknown and unknowable risks because of global warming, long term and wide-based financial crises, wars, etc. More capacity is needed to understand and interpret this data flow and take necessary steps to manage global risks. Professor Haksöz based on his observations of natural ecosystems starting from childhood and his belief in the historical upbringing of Turkish people—honed during migratory journeys from Central Asia to Turkey—demonstrated how Turkish companies understand and manage risks in order to create the 16th largest economy of the world. This gripping book should be kept under the hand of every manager."

—Ender Yilmaz, Treasury Operations Vice President, Akbank, Turkey

Table of Contents

THE EVOLVING GLOBAL SUPPLY CHAIN NETWORKS: FRAGILE, CAPRICIOUS, AND ENTANGLED

Global Supply Chain Networks in the Age of Fragility

Welcome to the World of Extreme Risks and Opportunities

The Ubiquity of Global Supply Chain Risks

Recent Examples of Global Supply Chain Risks

HOW TO BECOME A RISK INTELLIGENT SUPPLY CHAIN

Risk Intelligent Supply Chains and the I-Quartet Model

Introduction to Risk Intelligent Supply Chains

Risk Intelligence versus Risk Intelligent Supply Chain

The I-Quartet Model: A Synopsis

The Acrobat over the Bosphorus

The Integrator: Orchestrating an Interdependent Supply Chain Network

Networks and Complexity

Supply Chain Network Orchestration

Risk Interdependence in Supply Chain Networks

Lessons from Turkish Carpet Weaving

The Inquirer: Sensing and Learning in Swan Lake

Sensing and Learning in Supply Chain Networks: Brightening the Peripheral Vision

Learning from Small Failures

Fail Fast, Learn Fast! Almost Fail, Learn Faster: Learning from Near Misses

Swan Lake: A Habitat of Colorful Swans

The Ladder of Mastery: Swan Lake Ignorance to Swan Lake Intelligence

Risk Anticipation in the Supply Chain Network

Technical Appendix

The Improviser: Creative–Diverse–Flexible Tinkering to Achieve Resilience

The Improviser in the Supply Chain Network

Resilience

Creativity and Design Thinking

Tinkering

Diversity

Flexibility

The Ingenious: Intelligent Risk Taking in Swan Lake

Surprises Are Not Surprises Anymore: Black Swans in Swan Lake

Negative versus Positive Black Swans

Positive Deviance: Identifying and Nourishing Positive Black Swans

Extremophiles: Positive Black Swans of Biological Ecosystems

Dragon-Kings versus Black Swans

Fork-Tailed Risk-Taking Strategy

Closed-Loop Dynamics of the Risk Intelligent Supply Chain

HOW DO LEADING TURKISH COMPANIES THRIVE IN THE AGE OF FRAGILITY?

Wisdom from Leading Turkish Companies

Kordsa Global: Orchestrator of Transnational Supply Chain Network

Prelude

Managing Global Supply Chain Operations and Risks

Perception of Global Supply Chain Risks

Strategic Risks along the Supply Chain Network

Kordsa Global Approach for Risk Assessment and Hedging

Global Supplier Management

Financial Hedging, Insurance, and Business Continuity

Operational Hedging Strategies

Intelligent Management of Supply Chain Contracts

Expecting the Unexpected: Black Swans in Swan Lake

Future Global Challenges and Emerging Risks

Developing Talent with a Global Supply Chain Mind-Set

The Future Vision for Kordsa Global’s Risk Intelligent Supply Chain

Managing Risks in Global Supply Chain Contracts

The I-Quartet Model of Kordsa Global

Brisa: Virtuoso of Supply Chain Risk Management

Prelude

Managing a Global Supply Chain Network

Managing Supply Chain Contracts and Related Risks

Risk Intelligent Supply Chain of Brisa

Managing and Mitigating Major Supply Chain Risks

Regulatory and Political Risks and Brisa’s Risk Intelligent Response

Learning from Black and Gray Swans in Swan Lake

Recruiting, Developing, and Retaining Supply Chain Talent

Managing Business and Supply Continuity

Envisioning the Future

The I-Quartet Model of Brisa

AnadoluJet: Maestro over the Clouds

Background of the Turkish Airline Industry

Turkish Airlines after Deregulation

Inception of AnadoluJet

Operational Innovations in a Risk Intelligent Supply Chain

No-Excuse Customer Service

Designing Responsive Marketing and Sales Strategy

Developing Young and Ambitious Talent

Risk Management Philosophy in Orchestrated Network

The Path Forward

The I-Quartet Model of AnadoluJet

Epilogue: Where Is Our Next Journey?

Appendix A: Scholarly Readings on Supply Chain Risk

Appendix B: Biography of Executives

Notes

Bibliography

Index

About the Author

Professor Haksöz is a faculty member of Operations and Supply Chain Management at Sabanci School of Management, Sabanci University, Istanbul, Turkey and an affiliate member of the Regent's Centre for Transnational Studies, Regent's College, London, UK. His current research focuses on risk intelligence, supply chain risk management, supply chain/energy contracts, supply chain networks on the Silk Road, climate change/weather/water risk, creativity and improvisation. His previous books include Managing Supply Chains on the Silk Road: Strategy, Performance, and Risk (with S. Seshadri and A. V. Iyer, 2011) as well as Global Perspectives: Turkey (with M. Çakanyildirim, 2012). He is a consultant for national/international firms as well as government organizations.

Subject Categories

BISAC Subject Codes/Headings:
BUS042000
BUSINESS & ECONOMICS / Management Science
BUS053000
BUSINESS & ECONOMICS / Quality Control
BUS076000
BUSINESS & ECONOMICS / Purchasing & Buying
TEC020000
TECHNOLOGY & ENGINEERING / Manufacturing