Supply Chain Risk Management

The safety aspect for risk management will evaluate the potential for human loss of life and or injury. The potential for major incident or accident, such as fire, explosion, or spill, including environmental damage. The necessity for security within the company is a highly need aspect of safety that can lead to risk. The revenues aspect for risk management will evaluate the loss of customer base, recovering of capital loss and recognizing uncoverable capital loss, and loss of opportunity in marketing of the product. The necessity for revenue risk management is key. The costs aspect for risk management will evaluate the costs that were incurred due to preventable problems. Also, costs due to increased warehouse space, vendor changes, and discount changes. A significant risk in cost for this company is the cost of legal defense. The legal aspect for risk management will evaluate regulatory compliance failures and actions that could result

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.

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.

IBM, (2008). Supply Chain Risk Management: Management A Delicate Balancing Act - IBM Global Business Services A multi-faceted view on managing risk in a global

A holistic view of risks is crucial for business profitability and this can be achieved through a process of frequent evaluation, training, monitoring and feedback sessions with key stakeholders (Chugh, 2016). This approach provides a framework for understanding the patterns and trends of potential risks and how they relate to the industry. A successful business should have efficient procedures, which include management and financial reporting systems. There many examples of organizations which have successfully managed their risks and turned the opportunities into concrete returns for the shareholders.

Risk in relation to functions- HR management, economic operations, OHS, supply chain, local governance and compliance issues.

Prepare Contingency Plans: Supply chain risks must be identified and planned for. It is important to consider supply chain disruptions such as natural disasters, terrorism, security threats, piracy, supplier’s financial collapse, and infrastructure or process failure and there are other risks that all businesses face such as demand volatility and compliance issues. (book, p.241). Developing back up processes and plans takes considerable time yet preparation can be the difference between business continuity and end.

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.

These trends are; improvement of the levels of customer service over cutting costs. Supply chain costs are continuously going down since recession started four years ago. The focus of companies is the improvement of the service levels of supply chain and at the same time reducing the costs. Execution is also been seen to be moving ahead of the planning of demand and supply. Planning for demand and supply has been the ultimate focus since o=it is a crucial part of success in supply chain. Contingency planning has also resurged, supply chains are becoming leaner (Riley, 2012).Reduction in the level of inventory require organizations to be able to react quickly incase of occurrence of abnormal events such as stock outs. Companies focus on the development of contingency plans, their execution and checking if the plans are effective.

To align the supply chain complexity with the supply chain risk management, it is essential for the upper management of the organization to be able to understand and recognize where the company is being faced with risk. In the case with Cisco, they must first identify the needs of the customers, to align the supply chain complexity with risk management. Cisco looked to integrate the different companies to progress with the process of supply chains. Within in Cisco they

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.

The aim of this paper is to describe and analyse the supply risk management in the field of strategic purchasing.

Mitigating risks play a huge part in the supply chain strategy. Procedures put into place should not just be looked at as a cost, but as a savings. The bottom line is directly affected when damage, theft, and legal issues occur. Risk and uncertainty can be used interchangeably. “Supply chain uncertainty and risk is defined as the impacts, consequences, unexpected events and/or errors (e.g. delays, damages and loss) that may harm the logistics operations in this study” (Wang, Ji, & Abareshi, 2015. P. 489). The first task is to ensure proper insurance on the facilities and merchandise located within the warehouse, and any other equipment owned by the company. A key strategy is to shift liability onto another party like an insurance

Demand management performance, referring to the extent to which a firm is capable to fulfill its customer’s orders efficiently and effectively, has become one important indicator of a firm’s overall performance (Cachon and Fisher 2000; Heikkila 2002; Xu et al.2003). The demand management process is concerned with balancing the customer’s requirements with the capabilities of the supply chain. This includes forecasting demand and synchronizing it with production, procurement, and distribution capabilities (Croxton et al. 2002). A good demand management process can enable a company to be more proactive to unanticipated demand and more reactive to unanticipated demand. Supply chain risk, vulnerabilities, and uncertainties have become topical issues of interest among academics and practitioners in the last few years (Oke and Gopalakrishnan 2009). Supply chains are vulnerable to risks or disruption that arise from problems in coordinating supply and demand, including both high-likelihood, low-impact and high-impact, low-likelihood risks, both of which affect organizations in a major way (Chopra and Sodhi 2004; Kleindorfer and Saad 2005). Thus, for firms, having the ability to respond effectively to the demand disruption is crucial. Although there is growing interest in exploring ways to manage these disruptions (e.g., Chopra and Sodhi 2014; Yu et al. 2009), little prior research examines the types of organizational capabilities that help a firm manage demand disruptions. Our

The customer should be made an integral part of the supply chain logistics apparatus. Customers demand loyalty and a fair business deal from their supply chain entities. A logistics company reputation can be enhanced through aggressive and successful utilization of customer relationship management (CRM), but can be seen in a negative light if managed poorly. A customer or client will be loyal to the logistics company if they meet their daily, short, and long term CRM requirements. The importance of the customer in today’s globally competitive logistics supplier market should not be understated. Supply chain logistics firms have to attract, retain, and provide customers solutions to real problems. Innovative information technology based CRM systems will show how attractive these are for long time loyal customers. The synergistic melding of CRM with supply chain management (SCM) will be addressed as well.