Offshore supplier risk Vs onshore supplier risk

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.

The supply chain management is considered as a management concept from past two decades as the customers are concerned about timely and safe delivery. The competitiveness has been increasing among the companies to deliver the products as quickly as possible to the customers all around the world. This has made the supply chain management as a vital tool for the management. This is also measured as a competitive parameter for the companies.

Today’s global supply chain has been shaped by the past decades of focus and strategies based on achieving the lowest operational costs coupled with a push towards market expansion and supplier outsourcing. The expansion of global supply chains combined with the increasing number of joined connections to external business partners has significantly raised the possibility for supply chain disruptions (Poirier, Quinn, & Swink, 2010). In today’s global business environment, the importance of risk management continues to grow daily.

Supply chains manage the movement of products from the acquisition of raw materials through production and finally distribution to the end user. A properly designed supply chain can create many opportunities to drive down cost and increase revenue opportunities. In order to create a supply chain that is sustainable and flexible it is necessary to identify and align company goals and initiatives with the manufacturing and distribution of products.

Outsourcing has become an integral part of many organizations today. Outsourcing has its advantages and disadvantages that organizations will have to weigh to decide whether or not outsourcing is the best possible solution to their current problems and business operations. Outsourcing refers to the process of hiring external provider to operate on a business or organization function (Venture Outsource, 2012). In this case, two organizations or businesses enter a contract where there will be an exchange of services and payments. This paper will discuss the possible risks an organization may encounter in outsourcing in relation to the use of an external service

The larger a company’s supply chain, the more vulnerable the company becomes. When the company’s suppliers spread further and further away from the company, the company becomes even more vulnerable to political and currency risk, cyber attacks, missed inventory goals, and failed communication with the supply chain. For a company to overcome those potential vulnerabilities, a company must build safeguards into their operations. Those safeguards include a strong corporate backing in supply chain management, solid relationships with suppliers, more attention to forecasting, and a holistic approach to sustainability.

Risk and Consequence: Tales from the Industry Supply Chain Risk Categories Disruptive Events, Uncertainty and Impact Models and Methods for Supply Chain Risk Management Example of Risk Management for IBM’s Product Supply Chains An Approach for Measuring the Impact of Identified Supply Chain Risks Key Lessons from IBM’s Supply Chain Risk Management Approach The Landscape: Supply Chain Risk Management Supply Chain Risk Management: Getting Started In Summary Authors Footnotes

Organizations having supply chain world-wide face more risks such as supply disruptions, longer lead times etc. caused by global customs, foreign policy regulations, port delays, political instability, recession in a specific region’s economy etc.

This is no different for the world of procurement and supply management when it comes to overseas suppliers. Businesses need to be aware of the possible communication barriers, international laws, regulations and even customers. The costs that may come with being able to export and import the items being made overseas can become a huge money and time pit. This could cause the savings being had by making the items overseas to quickly disappear. Quality of items is also a possible disadvantage that can come from making products overseas. In a lot of cases of overseas manufacturing follows the trend that you get what you pay for, low price means low quality. More of the luxury types of companies are beginning to bring their business back to the United States according to Schmidt (2016) because they are starting to realize that cheaper is not always

3039). A failure of any one element in a supply chain potentially causes disruptions for all partnering companies upstream and downstream (Yang and Yang 2010, cited by Diabat et al, 2012, p. 3039). Although many risks exist in business, three have applicability to the supply chain, namely supply risks, operations risks and demand risks. Supply risks reside in the course of movement of materials from suppliers to the firm and include the reliability of suppliers, and considerations such as single versus multiple sourcing and centralized versus decentralized sourcing. Operational risks affect the firm’s internal ability to produce goods and services, ultimately affecting the profitability of the company, and may result from a breakdown in manufacturing or processing capability and/or changes in technology. Demand risks reside in the movement of goods from the firm to the customers, and include the risk of obsolescence, stock-outs, and over-inventory. The development of effective strategies for managing risk depends on understanding the sources of risk and their relationships (Diabat, Govindan, & Panicker, 2012, p. 3039).

Supply Chain Management is defined as the oversight of materials, information, and finances as they move in a course of action from supplier to manufacturer to wholesaler to retailer to consumer. It includes numerous activities such as coordinating and integrating these flows both within and amid companies. By directing the supply chain, companies are able to cut excess fat and provide products faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales and the inventories of the company 's product purchasers, therefore completing the objective in a Supply Chain Management system by decreasing inventory. However there are risks taken by companies as the globalization of their supply chain is paired with concerns about the quality of products that are made in other countries may not meet regulatory standards, therefore puts their products in jeopardy of being recalled. This means that supply chain managers are responsible for ensuring suppliers and their products maintain safety and quality standards. Recalls or safety issues can damage a company’s reputation.

Supply chain is long and penetrates almost all business processes. The chain can extend from raw materials to final sales or deliveries to end users. It connects an organization with multiple levels of customers as well as suppliers, and acts as a channel on which to exchange information and transfer orders in terms of product flow (CIPS, 2013). The role of supply chain plays in a business determines the necessity of supply chain management (SCM) improvement. According to APICS Dictionary (2016), SCM involves “design, planning, execution, control, and monitoring of supply chain activities”. It affects

Supply chain risk comes from what you do not understand and underestimate. When you have foresight of what could happen you are able to develop plans to mitigate the effects. What Simchi-Levi, Schmidt and Wei have outlined is a way to have improved foresight. What they have stated is that most supply chains presume that the greatest risk is from whom they spend the most money. The mathematical model that they have developed indicates that this is not always true.

In the supply chain, supplier and manufacturer could meet such as supply risk, strategic risks and operational risk. The main risk comes from the manufacture and purchasing merchandise, the inventory risk and alternative possibilities. According to Steele and Court (1996) supply risk occurs mainly caused by the imbalance between supply and demand.

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