SBM2302 Advanced Supply Chain Management 2

  • Subject Code :  

    SBM2302

  • Country :  

    AU

  • University :  

    Asia Pacific International College

Answer:-

Introduction

Supply chain management or SCM is the distinct control or management of overall flow of services and products and also includes every significant procedure that mainly transforms all raw materials to finalized items. It even involves the most active streamlining of the activities of supply side of business for maximizing customers’ values and obtaining a competitive advantage within the market place (Wieland 2021). Five different processes of SCM include planning, making, sourcing, delivering and finally returning. A proper designing, planning, implementation, controlling and handling of SCM activities with the core objective for creating net value, building distinct competitive infrastructures, leveraging worldwide logistics, synchronizing supplies with demands and also measuring performance on a globalized manner (Nunes, Causer and Ciolkosz 2020). There are some of the most distinct and noteworthy risks of supply chain management that are needed to be migrated properly. This report would be outlining a brief description on the mitigation of supply chain risks with relevant discussion.

Discussion

Supply Chain Management Risks

Supply chain management provides different techniques that has the core objective of coordination of all portions of SCM from supplying different raw materials to deliver and resumption of production and also trying to reduce the total expenses in respect to all existing conflicts amongst the chain partners (Mohammed 2020). The quality control of the supply chain management is improved and all companies comprise of greater control on the direct suppliers, but also on the business processes and operations. It is needed to be implement standardized minimum criteria of quality for instances and also enabling these direct suppliers for identifying and partnering with different secondary suppliers that fulfill these needs.

The procedural guidelines could help out suppliers to conform to the organizational quality needs and hence periodical audits are needed to be conducted accordingly. The key performance indicators of supply chain involve on time deliveries, scrap rate, rework and similar issues at the supplier, finalized quality of products, time for complaints’ resolution and even distinct findings from suppliers’ quality assessment (Hardy, Bhakoo and Maguire 2020). After analysis of the performance data, different companies could easily partner with the highest performing suppliers and vendors for the core purpose of maintaining strict quality control.

In spite of having such distinct and noteworthy advantages, there are a few risks in supply chain management that are needed to be analyzed and maintained accordingly. The modernized economy is dependent on the smoother operation of complicated and sophisticated SCM. The core capability of moving materials, elements and all finished goods in an efficient and timely manner has delivered several advantages for several companies like reduction of the total expense of different manufactured items, improvement of accessibility to advanced technologies and even opening new markets as well as business opportunities for the producers easily (Mosteanu et al. 2020). Transportation delays, natural disasters, unexpected quality issues, cyber threats and attacks, theft and inclement weather could easily disrupt the flow of cargo and also create short term costs as well as delivery challenges. Hence, the supply chain network is impacted easily. These distinct risks are needed to be eradicated on top level priority and such risks of supply chain management are provided below:

i) Mismanaged Implementation: The first as well as the foremost risk of SCM is mismanaged implementation. The process of changing a system of SCM takes up financial investments, time and HRM (Craighead, Ketchen Jr and Darby 2020). When this type of implementation is not done properly, there would be wasted labors, services’ redundancy as well as missed deadline, which result in distinct expenses. For the core purpose of avoiding these redundant expenses, the higher quality providers of logistics always complete a distinct analysis before implementation of changes to the SCM. It eventually ensures that the organizational management completely understanding the freight schedule of the client, consolidation opportunities and logistics requirements, before development and implementation of a new system.
 
ii) Shortage of Raw Materials: The second distinct and noteworthy risk of supply chain management in an organization is shortage of raw materials. While the businesses are increasingly pursuing regional and local manufacturing strategies for finished items, the subsequent production of different raw materials would remain highly globalized (Lahane, Kant and Shankar 2020). This type of supply of key materials can be referred to as vulnerable for widespread disruption can cause by demand increment as well as production bottleneck. The present pandemic situation has created maximum crisis in the organizational management of supply chain and raw material supply. These shortages are being driven by different operational issues and maintenance shutdown accordingly. Different companies within the automotive, textiles, electronics as well as packaging industries might be responsible for forcing to switch to other distinct items, temporarily and it might not be always possible for the organizational processes and operations.

iii) Limited Granularity of Data: Another distinct and vital risk of supply chain management in a specific organization is limited granularity of data. Most of the organizations have been facing similar issues in their business processes and operations and as a result, there had been distinct vulnerabilities and weaknesses eventually (Xu et al. 2020). The information would also enable faster and decisive actions when the low level suppliers are being threatened and these companies are not being able to deal with the SCM visibility and investing more resources in understanding the subsequent complexity of SCM. These companies even require for guarding against the potential effect of various events, which can worsen several challenges of supply chain management like trade war, natural disaster, sanction, strikes and civil unrest.

iv) Single source amplifies supply chain risk: The fourth distinct and vital risk of supply chain management in a specific organization is single source amplifying supply chain risks. Several organizations have emphasized on strategies of single sourcing, possibly for the aspect that it was perceived to be the lowest expense process. It even refers to the fact that different companies are highly vulnerable when the suppliers would be facing shortages or subsequent production interruption accordingly (Sodhi and Tang 2020). The organizations are also facing different sorts of SCM challenges that are referred to single sourcing is highly risky and there is a guaranteed method for losing sales, as soon as disruptions would take place. These businesses should emphasize on different strategies of risks’ mitigation for anticipation as well as minimization of supply chain risks as well as challenges.
 
v) Slowing down of digital transformation: Another significant and vital risk of supply chain management in a specific organization is slowing down of digital transformation. A proper accessibility to datum is termed as crucial for efficient process of decision making. It is also noticed that several companies comprise of a mishmash of manual as well as digitalized systems, which effectively trap confidential information in the functional silos and it refers to the fact that decision making would be hampered by an incomplete attribute (Wamba and Queiroz 2020). One of the major reason of such attribute is COVID 19 pandemic and this type of pandemic situation has emphasized on the requirement of looking at the financials for understanding base cost and variable cost.

The involvement of digital transformation can successfully enable different leaders for making more intelligent decisions. It is extremely crucial that the companies devise methods for accessing the data of SCM via the subsequent introduction of distinct technologies, which enable datum for flowing freely via the system in a significant manner. Moreover, the companies also require technologies like supply chain digital twin, which enables in monitoring, managing and observing the effects of decisions (Gölgeci and Kuivalainen 2020).

vi) Maintenance of traditional inventory strategies: The next distinct risk of supply chain management in a specific organization is maintenance of traditional inventory strategies. These strategies focus on the previous performances for the core purpose of determining present inventory strategies. There are certain precise algorithms that are being utilized for determining the exact needs accordingly. The issue with the approach is that it does not take into subsequent consideration the unexpected events, nor it is agile and is changed from the present reality. An advanced techniques of inventory optimization could help to handle unpredictability better than standardized inventory optimization solutions (Asian, Choi and Oloruntoba 2020). Demand shaping is on the basis of what if analysis for determining different expected demands and also deal with the challenges of SCM.

vii) Lack of Actionable Datum and Insights: This particular risk of supply chain management is extremely common and it is also checked that there is a lack of distinct actionable datum as well as insights. A common theme facing business’ leadership and SCM does not comprise of sufficient information for making informed decisions. Distinct complexity of SCM makes it quite difficult for evaluation of multiple options, scenarios and tradeoffs for arriving at the best or the most appropriate decision eventually (Hoberg, Thornton and Wieland 2020). The traditional transactional enterprise resource planning often excels in managing maximum volumes of data, the method of data to be captured, stored and handled and it is extremely difficult in recognizing forward looking trend. It is applicable to most of the business analytics, which are effective for reporting; however providing restricted insights into futuristic SCM issues. Prescriptive analytics is required to be considered, on the basis of the advanced modeling techniques for creating a model of the supply chain to accurately reflecting the process of it working process.

Mitigation of Supply Chain Risks

The SCM risks are needed to be eradicated successfully for making sure that maximum efficiency and effectiveness is obtained without any kind of issue or complexity. Different risks of supply chain are the most inevitable parts of running a specific business. From subsequent sourcing of raw materials to dispersion of finished products and services, it impacts all distinct parts of the organizational operations (Ketchen Jr and Craighead 2020). The respective companies should mitigate the risks of supply chain management for ensuring that the potential costs of supply chain disruption would be avoided successfully. As a result, there would be a better chance of sustainable growth as well as development and prosperity. It even needs a proactive and collaborative approach, which includes all distinct stakeholders in the entire SCM network.

As soon as the supply chain risk would be mitigated, it would be easier for the business to be highly robust as well as responsive. It would also provide a specific benefit on the competitors. The internal risks are quite easier for mitigation as they lie mainly in the organizational locus of control. These internal risks of the organizational SCM involve lack of contingency planning, disruption within internal manufacturing operation, changes within major personnel, structure or procedures like supplier communication channel, unsuccessful management and cyber security breaches (Tönnissen and Teuteberg 2020). The external risks of supply chain network include unpredictable as well as misunderstood customers’ demands, interruptions of the flow of different raw materials, economic, governmental and social factors like exchange rates, terrorism and elections, supplier facility condition and even compliance issue as well as the management and stability of suppliers’ businesses. The major and the most significant methods for mitigating supply chain risks in an organization are provided below:

i) The first as well as the foremost effective and significant method of mitigating SCM risk is undertaking a specific analysis of business impact. For the business to be capable for withstanding any potential supply chain disruption, it should be well prepared and for this distinct purpose, it is required for the organizational management to understand and predict the subsequent impact of any disruption to have on the plan and business. It is also needed to understand the exposure of SCM risk and the respective organization would require for undertaking a specific methodical reviewing of the business, people, customers, suppliers, people and processes (Kot, Haque and Baloch 2020). Hence, the business management should conduct the complete business impact analyses of the SCM risk. It would help the organization in understanding the potential exposure of risk and also addressing the overall effects of any disruption.

The key business processes are needed to be identified and different resources as well as activities are required for running the business in a specific method. It is also required to assess these key elements to be impacted by the disruptions of supply chain. After identification of business activities, it would be required for ensuring that the disruptions related to supply chain, especially in the coronavirus pandemic situation are eradicated on a top level priority. For example, the organization of Amazon.com has ensured that they are changing their strategies of bringing raw materials from China and other surrounding countries to reduce the disruptions in supply chain successfully. It has allowed them in focusing on the efforts that can impact their bottom line accordingly (Zhang et al. 2020). Hence, an overall culture of proactive agility is being built for managing the issues successfully.

ii) The second distinct and noteworthy method of mitigating supply chain risk would be a proper assessment and monitoring of new and existing suppliers. It would be effective for the business as they would be able to decrease the negative effects of SCM successfully and also ensure that different capabilities are being measured against the required. The new partners and collaboration is required for supply chain management as different opinions or experience of the other customers are managed properly and distinct resources like staff, equipment, materials and storage are being fulfilled on a priority basis (Maina and Mwangangi 2020). It is also needed to ensure that the organization is highly committed to quality standards like ISO 9001 and the financial impacts are not affected, under any circumstance. Moreover, the organization would be able to manage as well as have control over policies, processes and supply chain and the approach to communication and collaboration is innovative in nature.

iii) The concentration of supply is needed to be reduced properly for ensuring that the supply chain risk is avoided and disruptions are eradicated subsequently. The organizations should not be dependent on the single supply line and different benefits of the risks are required to be understood. However, depending excessively on a constant as well as uninterrupted supply from a single vendor could eventually create a single failure point. It is needed to recognize and build relations with alternative primary as well as secondary suppliers and only the selected suppliers should be focused on (Seuring et al. 2020). The organization should ensure that costs are not increasing, under any circumstance and the organizational management is able to work properly with the suppliers. They should also collaborate as well as communicate with the suppliers and a proper and suitable framework is needed to be included for successfully mitigating the supply chain risk in an easier and effective method.

iv) It strives for a specific integrated approach and the respective marketing channels play a vital role in the SCM and proper resilience on the supply chain network is needed to be maintained on top level priority. The retail businesses become included in the SCM for controlling products’ quality, inventory level, expenses and timing, after proper inclusion of refining, designing, manufacturing, packaging and transportation. The confidential information within locations and businesses is being sent successfully and it also includes subsequent movement and even storage of various raw materials, work in process inventories and even finished products for fulfillment from the point of origin to destination (Singh and Kumar 2020). The interconnected network, node business and channel combines in the establishment of products and services that are required by the end customers in a SCM.
 
v) The subsequent association of information flows is needed to be emphasized on top level priority for better integration of SCM activities via different improvised supply chain relations for subsequently achieving competitive advantages accordingly. This type of management is required for better collaboration, improved quality control, high rate of efficiency, keeping up with demands, shipping optimization, reduction in the overhead expenses, improved risks’ mitigation and improved cash flow (Kot, Haque and Baloch 2020). The organization is also able to gain high rate of efficiency and having real time data on the overall accessibility of the raw materials and manufacturing delay would enable the businesses in deploying backup plans like sourcing materials from the backup suppliers, preventing any further delay.

Without the real time data, the subsequent organizations can result in out of stock inventory issue or even late shipment to the end customers. It is needed to implement different solutions of smart automation for resulting in higher efficiency and hence data would be leveraged for minimization of delay and also supporting the customers’ experiences as well as boosting the organizational reputation easily. As a result, the business would be able to keep up with the demand and also complete shipping optimization easily (Ketchen Jr and Craighead 2020). These are required for avoiding challenges like bullwhip effect and also gaining maximum advantages easily.

vi) The data driven SCM eventually provides a proper visibility from end to end for effective monitoring of the overall flow of data, goods and services from procurement to manufacturing and delivery to the end customer. The confidential data is not the only driver of effective SCM and all other factors like good vendor as well as supplier relationship, efficient costs’ control, security of the most appropriate logistics partners and adoption of innovative SCM technologies for making a major effect (Asian, Choi and Oloruntoba 2020). Integrated software solutions of supply chain management remove different bottlenecks and enable for the seamless sharing of data and as a result, providing a better image view of the SCM from end to end. Hence, the decisions would be improvised to a higher level and maximum effectiveness and efficiency would be gained in an easier manner.

Conclusion

Hence, a conclusion could be drawn that SCM practice draws majorly on industrial engineering, systems engineering, operations’ management, logistics, IT, marketing and procurement. There are ethical issues, internal integrations, transparencies or visibilities and talent management that are needed to be considered on top level priority.

It also incorporates an integrated planning as well as execution of procedures that are needed for optimization of the flow of material, capital and data within functionalities, which broadly involve demand planning, sourcing, production, logistics and inventory’s management. The above provided report has properly identified and analyzed supply chain risks that are needed to be mitigated subsequently for achieving competitive advantages successfully.

References

Asian, S.S., Choi, T.M. and Oloruntoba, R., 2020. Supply Chain Management in an Era of Reglobalization. International Journal of Physical Distribution & Logistics Management.

Craighead, C.W., Ketchen Jr, D.J. and Darby, J.L., 2020. Pandemics and supply chain management research: toward a theoretical toolbox. Decision Sciences, 51(4), pp.838-866.

Gölgeci, I. and Kuivalainen, O., 2020. Does social capital matter for supply chain resilience? The role of absorptive capacity and marketing-supply chain management alignment. Industrial Marketing Management, 84, pp.63-74.

Hardy, C., Bhakoo, V. and Maguire, S., 2020. A new methodology for supply chain management: Discourse analysis and its potential for theoretical advancement. Journal of Supply Chain Management, 56(2), pp.19-35.

Hoberg, K., Thornton, L. and Wieland, A., 2020. How to deal with the human factor in supply chain management?. International Journal of Physical Distribution & Logistics Management.

Ketchen Jr, D.J. and Craighead, C.W., 2020. Research at the intersection of entrepreneurship, supply chain management, and strategic management: Opportunities highlighted by COVID-19. Journal of Management, 46(8), pp.1330-1341.

Kot, S., Haque, A.U. and Baloch, A., 2020. Supply chain management in SMEs: Global perspective. Montenegrin Journal of Economics, 16(1), pp.87-104.

Lahane, S., Kant, R. and Shankar, R., 2020. Circular supply chain management: A state-of-art review and future opportunities. Journal of Cleaner Production, 258, p.120859.

Maina, J. and Mwangangi, P., 2020. A critical review of simulation applications in supply chain management. Journal of Logistics Management, 9(1), pp.1-6.

Mohammed, A., 2020. Towards ‘gresilient’supply chain management: A quantitative study. Resources, Conservation and Recycling, 155, p.104641.

Mosteanu, N.R., Faccia, A., Ansari, A., Shamout, M.D. and Capitanio, F., 2020. Sustainability Integration in Supply Chain Management through Systematic Literature Review. Calitatea, 21(176), pp.117-123.

Nunes, L.J.R., Causer, T.P. and Ciolkosz, D., 2020. Biomass for energy: A review on supply chain management models. Renewable and Sustainable Energy Reviews, 120, p.109658.

Seuring, S., Yawar, S.A., Land, A., Khalid, R.U. and Sauer, P.C., 2020. The application of theory in literature reviews–illustrated with examples from supply chain management. International Journal of Operations & Production Management.

Singh, R.K. and Kumar, R., 2020. Strategic issues in supply chain management of Indian SMEs due to globalization: an empirical study. Benchmarking: An International Journal.

Sodhi, M.S. and Tang, C.S., 2020. Supply Chain Management for Extreme Conditions: Research Opportunities. Journal of Supply Chain Management.

Tönnissen, S. and Teuteberg, F., 2020. Analysing the impact of blockchain-technology for operations and supply chain management: An explanatory model drawn from multiple case studies. International Journal of Information Management, 52, p.101953.

Wamba, S.F. and Queiroz, M.M., 2020. Blockchain in the operations and supply chain management: Benefits, challenges and future research opportunities.

Wieland, A., 2021. Dancing the supply chain: Toward transformative supply chain management. Journal of Supply Chain Management, 57(1), pp.58-73.

Xu, S., Zhang, X., Feng, L. and Yang, W., 2020. Disruption risks in supply chain management: a literature review based on bibliometric analysis. International Journal of Production Research, 58(11), pp.3508-3526.

Zhang, J., Yalcin, M.G. and Hales, D.N., 2020. Elements of paradoxes in supply chain management literature: A systematic literature review. International Journal of Production Economics, p.107928.

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