1st Edition

Risk Intelligent Supply Chains How Leading Turkish Companies Thrive in the Age of Fragility

By Çağrı Haksöz Copyright 2013
    290 Pages 39 B/W Illustrations
    by CRC Press

    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.

    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

    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
    Creativity and Design Thinking

    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

    Wisdom from Leading Turkish Companies

    Kordsa Global: Orchestrator of Transnational Supply Chain Network
    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
    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




    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.

    "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

    "Çağrı 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. Çağrı 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. Çağrı 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, Çağrı 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, Sabancı 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."
    —İhsan Sabuncuoğlu, 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."
    —İlhan Bağören, CEO, Telenity, Inc. 

    "Coming from an operational and quantitative background, I found Çağrı 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, Çağrı'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 Çağrı'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 Kutanoğlu, 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 Çakanyıldırım, 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 Yılmaz, Treasury Operations Vice President, Akbank, Turkey