SUPPLY CHAIN MANAGEMENT 5
Itis true that global supply chain generates both predictedrisksthat require business operators to devise appropriate strategies tominimize the negative effects. According toLambert(2008), the risks range from language, organizational behavior,diversity, and social facets, among others. I am in agreement thatsupply chain risks vary in regions and nature of business. Primarily,Lambert(2008) observes that supply chain involves various processes such aslogistics, transportation, warehousing, and purchasing, among others.To avoid risks in the SCM process, deeper understanding through aholistic approach of the global chain is necessary.Business operators acknowledge the importance of devising appropriaterelationships with the stakeholders to minimise risks. It is alsoevident that supply chain has narrow empirical research on techniquesin end-to-end supply chain interactions and enduring relationshipsbetween major collaborators. It is also considered that distinctapproaches are necessary to mitigate the particular risks anduncertainties within each domain. Supply chain process ismulti-layered, thus has a number of functions that require distinctdecisions. Process modelling, for instance, is essential as itfacilitates delivery and distribution as well as allowsdifferentiation and cost advantage (Lambert,2008).
Itis agreeable that failures within the supply chain from variousfactors, including geographic clustering, changing global dynamics,cost pressure, and modern communication, among others. It is truethat the failures have grave effects on the performance of anorganization. In a global context, the challenges and failures arehigher due to the increased complexities. It is also true thatcompanies need to develop appropriate control strategies that willminimize the difficulties in the supply chain. Proactivestances are important to create supply chain processes that respondeffectively to the changing global dynamics and needs. It is alsoconsidered that timing for delivery and stock-taking happens toeliminate the failures. Thepurchasing managers are required to observe each category in order tominimize risk and increase earnings. Appropriate strategies help inminimizing the negative effects that are likely to emerge because ofstocked items. Effectivedistribution system can help record and manage the delivery of goodsand services in a timely manner. The overall goal is to reduce theemergent vulnerability that arises from poorly-crafted SCM strategies(Mangan,Lalwani, & Butcher, 2008).
Iagree that risk is inevitable within the supply chain hence remains amajor concern for the business operators and supply chaindepartments. The matter begs the question, how well can we manage therisks associated with the supply chain processes? Why do the supplychain strategies fail? It is evident that implementation gap and lackof knowledge sets to contribute to the failures in the formulation ofappropriate SCM strategies. Further, short-term focus or lack of ithas negative outcomes on the supply chain. Onealso observes that the global supply chain has concerted mainly oncompetitive market functions, which sometimes causes a struggle formarket share between major firms and small companies. Wildingand Humphries (2006) recognized that the organization of supplyrelationships is an important ingredient in realizing the ‘bestpractices’ in the SCM. Certainly, SCM is not just about improving apartner’s function in the supply chain, but more on coordination ofthe established relationships and prevailing interests. It is alsorecognizable that an integrated technique in supply chain results inpositive outcome in areas such as firm-supplier relationships, trust,loyalty, co-operation and coordination.
Discusshow would you go about assessing the capability of supply chain tocope with unexpected risks?
Supplychain should have the capacity to cope with unexpected risks anduncertainties. It is appropriate to evaluate the threat and measurethe risk. The process starts with the identification of the perceivedrisks before formulating the SCM contingency planning. The step isfollowed by classifying and prioritizing the risks before theireventual analysis. The likely causes and consequences are listed toenable the executives make appropriate adjustments. Regular testingof the contingency plans is necessary as it allows the companies tomake regular checks and changes. Regular stakeholder and supply chainaudit would help in assessing the ability of other departments tomitigate the negative effects arising from supply chain disruption.Companies need to use models that maximize supply security besidesreducing the effects of unexpected risks.
Lambert,D. M. (2008). Supplychain management : processes, partnerships, performance.Sarasota, Fla.: Institute.
Mangan,J., Lalwani, C., & Butcher, T. (2008). Globallogistics and supply chain management.Chichester, England: John Wiley & Sons.
Wilding,R., and Humphries, A. S. (2006). Understanding collaborative supplychain relationships through the application of the Williamsonorganisational failure framework. InternationalJournal of Physical Distribution and Logistics Management,309-329.