Global Supply Chain Network Challenges

Changes within the supply chain can disrupt the normal flow of goods and services because each change hasn’t been fully scrutinized. A firm can plan and speculate that a change with have a certain effect on the supply chain, but until those processes have been measured it is impossible to know the true cause and effect of any disruption.

Risk management is a critical component to the success of any supply chain, yet this is still an area that sees little forward movement. In many organizations, risk management is viewed more as a reactive department, only becoming operational when a significant disruption arises in contrast to being an active and continual department with focused effort. As a supply chain moves to take on a global stance, risk management cannot be treated as a reactive measure. Global supply chains are exposed to greater risk than local/domestic supply chains as their linkage is more

Risk refers to any potential problems that would threaten the likelihood of success for or any project. These potential problems might prevent a project from achieving some or all of its objectives by increasing time and cost. Risk factors can even

(Handfield, 2007) Code C should cultivate supply chain strategies that plainly deliberate two parameters that “intensify” the negative influence of interruptions on customer and brand performance: globalization and product/process complexity. Second, Code C should plan strategies with countermeasures that diminish the impact of these things, that is: better visibility to strategic supply chain nodes that can rapidly identify disruptions. They should also have well-positioned resources that allow rapid short-range retrieval plans. They need to have in place long-range cooperative methods to remove disruptions in the future. Research also recommends that companies with a great exposure to global supply chain risk invest more in improved inventory and capacity visibility

Others risks involved in such projects include the external risks. These risks are linked to the project externally. They are, for example; new labor regulations, weather, changes in ownership, and in some cases, foreign policies might affect if the project is being carried out in a foreign place. Catastrophic risks can also be categorized under the external risks. The risks include occurrences such as; terrorism, earthquakes, floods, civil arrests and unavoidable circumstances that are most likely to occur unexpectedly. These are physical risks are normally beyond control.

When it comes to supply chain management all business must be aware of the risk and best practices to prevent problems with their product. Neither the seller or buyer is immune to the risks of bad supply chain management. When it comes to cybersecurity, companies must be sure that their products do not have vulnerabilities that they are unaware of. This can lead to reduced sales, damaged reputation, and cost a significant amount of money in remediation.

Tang (2006, cited by Diabat et al., p. 3040) divided risk into operational risks and disruption risks. Operational risks are associated with inherent uncertainties such as uncertain customer demand, uncertain supply, and uncertain cost, whereas disruption risks are associated with major disruptions caused by natural and man-made disasters

The purpose of this term paper is to examine the terms ‘risk’, ‘risk assessment’ and ‘risk management’ and discuss how uncertainty affects these. The first part of the paper will be discussing risk in further detail especially when risk can be disadvantageous to an individual or a corporate body, and the need to eliminate or minimize the disadvantageous risk, especially if human life is at stake. The next part will start discussing the process of how industrial companies in particular go about starting the process of mitigation and reduction of risk to as low as reasonably practicable (ALARP), which is assessing risk through the use of variable tools. After the risk is assessed, then the process of actually putting things in place to manage the risks and their probable effects is discussed. The paper will round off with a discussion on uncertainty and how uncertainty affects the processes of risk assessment and risk management.

In a general scenario, there are different classifications of risk. Our daily life pose as risk and everything we do or have.

Concept of risk, risk assessment, risk management and how uncertainty affects the process will be discussed.

The sort of risks can be on a very basic level subdivided in primarily of two types.

First of all, risk is a complex construct because of the nature of risk is a human-defined subject and most of time, we cannot measure it exactly by quantifiable measures. The characteristic decides risk analysis is also a very complicated process. This indicates that any risk-related analysis is impossible to provide a complete strategy for risk management. We can only try our best to analyze specific risks in some specific fields.

Supply chain performance has never been as important as it is today. In a global economy where supply chains, and not companies, battle one another, how a supply chain performs determines who will win the battle. To achieve maximum benefit from a supply chain, a supply chain must be performing at its best or anything it has gained will be short-lived. Yet, many companies are not aware of how their supply chains are performing or even what supply chain they are in.

Main of them is the operational risk. This type of the risk includes internal and external factors. Also, they are subdivided into the

vulnerable in the supply chain—a problem that only seems to be growing. The US-based Center for