Case Study Approaches to Managing Global Sourcing Risk

2862 Words Apr 26th, 2013 12 Pages
APPROACHES TO MANAGING GLOBAL SOURCING RISK

1.0: INTRODUCTION
In globalization ever more efficient transportation and logistics has driven the outsourcing of manufacturing to, and sourcing of parts and goods from, distant regions to reap the benefits of lower sourcing and production costs. This has been managed by developing global supply chain management.But with its inherent complexity a global supply chain is at risk from many potential issues that could disrupt the chain. Risk must therefore be mitigated as far as possible at both a strategic and tactical level in order to reap the continued rewards of global sourcing. Many companies fail to do this when initially expanding their supply chains.

They look at the rewards of
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This strategy using by company may reduce process and control risk.
For oil or gas company will uses a standard methodology to assess and evaluate demand and supply risk. The level of risk is continuously assessed on quality, safety and technology to work out the optimum strategic sourcing option. Oil company uses a techniques which is a checklist of “what if ?” to maintain the suitability of certain suppliers. Company apply cross functional team method which has an expert from safety, supply chain and technical expert who work together to articulate risks from those different perspectives to reduce the risk. These company need to analyse out the probability of outcome and keep controlling the process by time to time. It will easily affect environment problem, they need to have a strong team to monitor the progress. Mechanical and electrical equipment company conduct in project-specific risk assessment and at the same time manage risks to wider supply network. Companies have developed a low cost manufacturing (LCM) project team to manage the risks of low cost sourcing decisions.
This company strategy may reduce the demand risk in term of uncertainty demand in the market can solve by wide supplier.
FMCG food and drink needs support by health and safety team. Companies need to continuity plan for every plant and engineer need to be responsible, accountable and able to assess risk in the supply base as well. This process