Bottlenecks in a Process. Nature of Risk

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Table of Contents

Introduction
Nature of risk
Keeping supply chain running smoothly
Effect of culture
Conclusion
References

Introduction

In the past two decades, managers of US companies would brag of efficient machines they had made of their supply chains. The managers would increase the efficiency of their supply chains by implementing techniques and technologies, but more political issues in the recent past have affected the supply chains of these companies. Terrorist strikes, political instability and the recent shutdown of west coast shipping docks have made the managers more alert in dealing with supply chain risks. Supply chain decisions are influenced by the political risks of both the country of location and host country (Planert, 2002).

Nature of risk

There are several risk factors that affect the entire length of the supply chain, with some of the risks including customer demand, shelf life and carriage capacity of the products, currency exchange rates, and political instability. These risks are not new; they have been in existence and have been affecting supply chains for the last twenty years. Most of the risks have developed to enhance productivity, eliminate waste, abolish supply chain duplication, and drive for cost improvement (Hugos, 2006).

Keeping supply chain running smoothly

a) Broaden cooperation

Company managers should broaden cooperation. They should work in collaboration with colleagues in purchasing, logistics, traffic and other departments since sorting out supply chain risks requires a greater degree of collaboration (Mentzer, 2001).

b) Considering trade offs

Managers should think of cost and supply chain risks as variables that exist alongside the duration of time. In some instances, the manager may increase risks because there is less redundancy in the system, but it does not mean that the manager has increased the risks without much consideration, provided he / she examines the supply chain critically before carrying out any implementation (Frazelle, 2002).

Effect of culture

Corporate culture is very instrumental in managing supply chain. It provides some sort of a memory for an organization so that the organization does not start from scratch when its employees are changed. In addition, organizational memory regulates the communication flow in and out of a company by ensuring that there is continuity of norms (Simchi-Levi et al, 2004). Lack of conformity in culture between the company and its channel distribution members will lead to communication break down.

Conclusion

Managers need to meet with decision makers in their respective companies so as to access the importance of technology and supply chain. In addition, the managers should discuss how long it is likely to take for them to find solutions to the risks. Supply chain management has proved to be a great asset for any given company since it goes a long way in improving such companies’ wages. Getting positive results would mean that the managers must overcome risks so as to gain control over implementation and the system in general.

References

Frazelle, E. (2002). Supply chain strategy: the logistics of supply chain management. New York, McGraw-Hill professional
Hugos, M. (2006). Essentials of supply chain management. New York: John Wiley and Sons
Mentzer, J. (2001). Supply chain management. Washington, DC: SAGE
Plenert, G. J (2002). International operations management. Copenhagen Business School Press
Simchi-Levi, D. et al (2004). Managing supply chain: the definitive guide for business professionals. New York, McGraw Professional

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Bottlenecks in a Process. Nature of Risk

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