Case Study Supply Chain Risk Management at Leica Camera

• Functional Applications - Enterprise Resource Planning Systems (ERP)
• Analytics & Modeling - Predictive Analytics

• Consumer Goods
• Electronics
• Professional Service

• Procurement
• Quality Assurance
• Business Operation

• Supply Chain Visibility
• Predictive Maintenance

• System Integration
• Software Design & Engineering Services
• Training

Modern global supply networks are complex and vulnerable. Like many companies with suppliers in the region, Leica Camera AG was affected by the floods in Thailand and the earthquake in Japan. Having weathered the impact of these events, the company recognized the need for comprehensive supply chain risk management: Reduce manual effort and automate information procurement, Preventive action planning and an early warning system for safeguarding supplies, Constant monitoring of all direct suppliers, up to second-tier suppliers, Risk management as part of supplier management.

Leica Camera AG is an international premium-segment manufacturer of cameras and sport optics products. The legendary status of the Leica brand is founded on a long tradition of excellence in the construction of lenses and optical devices. Today, in combination with innovative technologies, Leica products continue to guarantee better pictures in all situations in the worlds of visualization and perception. Leica Camera AG‘s headquarters are situated in Wetzlar, in the German state of Hesse, and the company‘s second production location is in Vila Nova de Famalicão, Portugal. The company has representative offices of its own in Australia, England, France, Italy, Japan, Switzerland, Singapore, South Korea and the USA. Innovative products have been the driving force behind the company‘s positive development in recent years.

Leica Camera AG monitors risks along its global supply chains all the way to sub-supplier structures, with production plants and logistics hubs all being taken into account. To determine the financial consequences of potential risks to sales and corporate success, Leica creates criticality assessments on the financial impact of the damage. Strategic action plans have been developed for effective risk prevention and crisis response management. Risk management is integrated in the sourcing and supplier management processes and entrenched in the daily operations of Purchasing. Leica implemented riskmethods‘ Supply Chain Identification Service to identify sub-suppliers and second-tier suppliers and increase transparency across the entire supply chain. Leica uses riskmethods’ Risk Radar, Risk Intelligence Service, and Impact Analyzer to monitor and assess risks, visualize supply chains, and create early warning systems. This comprehensive approach makes risk management a decisive competitive factor and core element of the daily operations of Purchasing at Leica Camera AG.

• This comprehensive approach to risk management enables Leica Camera AG to create transparency into risks and dependencies along the entire supply chain of its direct suppliers, through to sub-suppliers.
• Early warnings allow Leica Camera AG to act immediately and prevent disruption in the supply chains of its most important products.
• Risk prevention and supplier development measures are planned and implemented, safeguarding future production and ensuring quality remains at a high level.

• Leica’s first evaluation yielded significant findings: extremely high dependencies for several strategic suppliers, requiring at least 12 months to procure replacements.