Risk and Supply chain management Samples †MyAssignmenthelp.com

Question: Discuss about the Risk and Supply chain management. Answer: Introduction: Supply chain managementrefers to themanagement of the flow of goods and services through various business processes. It involves management of goods during its movement from the inventory to the production area, movement of finished goods from production area to warehouses, storage of raw materials as well as semi-finished goods and finally the movement of finished goods from the warehouses to the final consumer (Christopher, 2016).Risk management refers to the identification and analysis of the financial risk along with finding solutions to avoid or minimize the risks involved in the business processes. Risk management in supply chain refers to the management of risks involved in the supply chain that harm or damage the business activities and the continuity of the business. Supply chain riskmanagement not only involves identification of the risks involved in the supply chain but also strives to mitigate the disruptions in the processes. Supply chain risk management involves identification of both internal and external environments (Wisner, Tan Leong, 2014). The internal environment includes employees, management and the organizational culture whereas, the external environment comprises of mainly customers, government, suppliers, economy, competitors and public opinion. All these elements of internal and external environment pose different risks to the supply chain of an organization that are necessary to be handled cautiously (McNeil, Frey Embrechts, 2015). The risk management in the supply chain mainly involves identification of the risks, analysis of the risks and evaluation of the risks. The risks that affect the business activities to a large extent are required to be prioritized and addressed. Some external risks also involve accidents, natural disasters, cargo damage, warehouse inadequacy and constrictions in the supply chain whereas, internal risks may involve unavailability of personnel and facilities. There can be several threats to the supply chain therefore; the severe threats are to be solved at priority basis. Once the threats have been identified and prioritized, the organizations can devise a suitable risk treatment plan. This involves providing protection to the supply chain from the threats, designing plans to face the issues and completely recovering from the risks. The risk management in supply chain involves continuous monitoring and review system that helps in responding to the changes in the internal processes as w ell as to the changes in the external environment including suppliers and regulations (Ellinger et al., 2015). Gap analysis identified through literature review: The following gaps have been identified through analysis of the literature review: Supply chain: According to Mangan, Lalwani Lalwani (2016), supply chain involves all those activities that involve flow and transformation of goods from raw materials to finished products and the delivery of the products to the ultimate consumers. It is a network of activities that involves receiving raw materials from the suppliers, conversion the goods into final products and distribution of the final products to the customers. There are mainly three types of flows in a supply chain namely materials, information and capital. Supply chain management involves optimizing the functions and connecting the elements of a supply chain. The management of supply chain involves procedures, human resource, purchasing, packaging, checking, warehousing, delivery, establishing good relationships with the suppliers and ensuring efficient flow of information within the supply chain. Management of the activities involved in the supply chain is very essential in order to reduce uncertainty, maintaining appropriat e inventory levels, minimizing delays, eliminating unimportant activities and providing efficient customer service. The changes in the business environment and the increase in competition have led to evolution of several concepts including supply chain management. The automotive industry comprises of supply chain management as well as physical distribution management. It has undergone drastic change over the past few decades. Earlier the automotive industry used the push model to forecast the demand for its products. However, with the popularity of internet, the manufacturers as well as the customers have access to large quantity of data. According to Stadtler (2015), the automotive industry has evolved by using strategic relationships and automation and control solutions in its supply chain. In order to face the business challenges, the automotive industry is promoting new technologies and engineering models. Supply chain risk management: According to Gilmour (2015), supply chain risk management involves identification of the risks, analysis of the risks and evaluation of the risks. Supply chain risk management not only involves identification of the risks involved in the supply chain but also strives to mitigate the disruptions in the processes. Supply chain risk management involves identification of both internal and external environments. It plays an important role in collaborating with the partners and dealing with the risks and uncertainties that are related to logistics. Supply chain risk management issues in automotive industry: On the other hand, Rushton, Croucher, Baker (2014) stated that supply chain risk management identifies the points of failures within the supply chain and addresses these risks. The major risk associated with the automotive industry involves failure in providing quality products to the customers. This might lead to loss of customer base due to lower satisfaction levels of the customers. The decrease in the satisfaction level of the customers might adversely affect the overall sales of the company. Another risk involved is delay in the delivery of the products. It has been observed that lack of proper supply chain has often led to the failure of the automobile companies in delivering the products within the promised time frame to the customers. According to Brandenburg (2014), inaccuracy in the delivery and shipment process of the final products has led to huge number of escalations. Delivery of faulty products and delivery of products after the due date by the automotive companies have led to reduction in the customers satisfaction levels. Inaccurate process of delivery and shipment often results in delivery of the products to the wrong customers. All these factors adversely affect the sales and profitability of the automotive companies. On the other hand, Armstrong (2014) stated that the major threat associated with the supply chain of automotive industry is the inappropriate functioning of the internal processes of the supply chain. This might result in delays and quality issues that ultimately leads to dissatisfaction among the customers. Therefore, the greatest risk to the automotive industry is the improper functioning of its internal processes. Supply chain risk management issues in Ford, Australia: According to Stadtler (2015), the supply chain management issues faced by Ford is on the verge of shutting down its operations within Australia. Ford has been accused of delivering inferior quality goods and services to its customers that has led to the reduction in the satisfaction levels of the customers. The issues in the supply chain management of the company has adversely affected the market share of the company. The second issue faced by the company is the delay in the delivery of the products. The company has been delivering the products to the customers after due date. This has led to dissatisfaction among the customers as the services are not delivered to them within time. The dissatisfaction among the customers has adversely affected the trust of the customers and the reputation of the company ("Home", 2017). On the other hand, Holweg Helo (2014) stated that the suppliers of Ford have not delivered the goods and services on time that has caused disturbance in the supply chain of the company. There have also been several issues in the mode of transportation and the time of shipments due to natural disasters. The suppliers do not get information regarding the operation within the supply chain as the company has imposed restrictions on the access of cargo and the company controls the use of its electronic data (Ross, 2015). Evaluation of the solution: The automotive industry is highly competitive in nature. In order to obtain competitive advantage over the competitors, it becomes necessary for the companies to focus on the efficiency of their supply chain. Automation in the supply chain has the ability to increase the pace of work and reduce the delays. Automation also helps in reduction in wastages due to human errors. Automation helps in improving the quality of goods and services and obtaining accuracy in the supply chain operations (Bishop, Bell Evans, 2013). There can be several threats to the supply chain therefore; the severe threats are to be solved at priority basis. Once the threats have been identified and prioritized, the organizations can devise a suitable risk treatment plan. This involves providing protection to the supply chain from the threats, designing plans to face the issues and completely recovering from the risks. The risk management in supply chain involves continuous monitoring and review system that helps in responding to the changes in the internal processes as well as to the changes in the external environment including suppliers and regulations (Lavastre, Gunasekaran Spalanzani, 2014). Due to the problems faced by Ford in its supply chain, the company is outsourcing its operations. The company is highly dependent upon the suppliers and just-in-time approach in order to reduce the risks involved in the supply chain. Ford has used the six sigma approach that has resulted in a centralization of the network. This centralization has resulted in reduction in the inventory, improvement in the delivery and shipment processes and cost- savings (K?r?lmaz Erol, 2017). Implementation of lean supply chain also enables the automotive industries to overcome the risks associated with the supply chain. The lack of suppliers has been the greatest issue that increases the inventory cost. Therefore, identifying prospective suppliers in various locations can be useful in solving the supply chain issues. However, the issues faced by the automotive companies are of similar type but to some extent they vary from company to company. A few issues are generally witnessed in all the automotive companies but some of them vary due to the difference in the supply chain management and risk management strategies. The availability of resources and the internal and external environment of the companies differ from each other. The level of automation within the companies differ which gives rise to specific issues. Therefore, it becomes necessary for the companies to devise their own specific solutions in order to solve their specific supply chain issues. Alternative approach: The company must implement proper ERP system and other related technologies in order to ensure that the goods and services reach the customers within the due time. The company must adopt supply chain model according to the market conditions. The supply chain model shall help the company to respond to the rapid changes in the market. The supply chain must align the business objectives of the company with the operations and sales of the company. Ford must include sustainability in its supply chain operations. The company must minimize the consumption of non- renewable resources and use renewable energy in its operations. This will not only benefit the environment but shall also help the company to reduce its cost over long-term (Brandenburg et al., 2014). The company must ensure proper communication within the organization so that the risks are easily communicated to the members. Proper communication is necessary because it enables the members to to develop the risk strategies in order to ensure successful operations within the supply chain. The company must implement proper automation in its supply chain operations that will enable the company to avoid delays in the delivery and shipment of its products. Fully automated operations shall enable the company to produce quality products that will meet the requirements of the customers. Automation shall help the company in gaining back the confidence of the customers by delivering them quality products within the promised time. Using the latest technologies in the supply chain operations shall also enable the company to achieve economies of scale that shall help in reducing the overall costs. Limitations: The issues faced by all the automotive companies are more or less same but to some extent they vary from each other. The geographical location of the company, availability of human resources, political conditions, technologies, funds and investment of the companies vary from each other. Due to the difference in the internal and external environment of the organizations, there are differences in the issues faced by them. A few issues are generally witnessed in all the automotive companies but some of them vary due to the difference in the supply chain management and risk management strategies. The availability of resources and the internal and external environment of the companies differ from each other. The level of automation within the companies differ which gives rise to specific issues. Therefore, it becomes necessary for the companies to devise their own specific solutions in order to solve their specific supply chain issues. Therefore, due to the difference in the risks involved within the supply chain of the automotive companies, application of general supply chain risk management strategies shall not be effective in solving the issues. The issues faced by Ford are delivery of inferior quality goods and services to its customers that has led to the reduction in the satisfaction levels of the customers and delays in the delivery of the products to the customers. The issues within the supply chain management of the company have adversely affected the market share of the company. There have also been several issues in the mode of transportation and the time of shipments due to natural disasters. Therefore, the company is required to implement automation in its business operations so that the idle time is reduced and the products are delivered at the promised time to the customers. Automation shall also help in maintaining the quality of the products that shall increase the satisfaction levels of the custom ers. Conclusion: Supply chain risk management refers to identification of the risks involved in the supply chain and designing plans that strive to mitigate the disruptions in the processes. Supply chain risk management involves identification of both internal and external environments in order to ascertain the risks associated with the supply chain operations. The report discusses the general issues related to the automotive industry as well as the specific issues faced by Ford in Australia. The availability of resources and the internal and external environment of the companies differ from each other. The level of automation within the companies differ which gives rise to specific issues. Therefore, it becomes necessary for the companies to devise their own specific solutions in order to solve their specific supply chain issues. Therefore, it can be concluded that the general supply chain strategies cannot be applied to solve the specific issue of the companies. The internal and external environments of the companies differ that gives rise to specific issues. In case of Ford, the issues of delay in the delivery and shipment of the products and the issues related to the quality of products can be solved by implementing automation in all its supply chain operations. The issue of availability of raw materials can be solved by finding new prospective suppliers in the nearby localities and establishing good relations with them. This shall ensure constant supply of raw materials that shall enhance the continuity of the business operations. The delivery of good quality products within the due time shall increase the satisfaction level among the customers which will indirectly boost the sales and profits of the company along with the improvement in its brand image. 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