Article 6 - Article 6: Managing Risk to Avoid Supply-Chain...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Article 6: Managing Risk to Avoid Supply-Chain Breakdown Amol A Nayak 1. Key takeaways: - All companies have to manage risk, SCM risk is the key risk that needs attention due to various ways it can affect: Supply Disruption (Natural, man made), Supply Delay, System breakdowns, forecast errors, IP issues, procurement pricing issues, accounts receivables, Inventory uncertainty and capacity management. - All these risks must be taken into consideration while initial design and implementation of a supply chain system. These various mitigation strategies must be considered while designing any Supply chain system. - Various Mitigation Strategies: Adding Capacity, Adding Inventory, Maintaining redundant suppliers, higher responsiveness, Increase flexibility, pool demand, higher capability, and higher number of customer. - Each Mitigation Strategy has an impact on the SCM risk. These need to be managed by the supply chain managers, e.g. higher inventory will reduce Supply disruptions and /or delay but it will tie up higher working capital. - Stress Tests are conducted within company to recognize potential and or existing risks.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/10/2010 for the course OMIS 627 taught by Professor Vora during the Spring '10 term at Punjab Engineering College.

Ask a homework question - tutors are online