Large retail corporations such as Walmart, Amazon, Flipkart, Alibaba and the likes depending on their super-efficient supply chain management to deliver the products to customers at the right time. However, even the slightest tremor in the supply chain can rock the entire company’s operations. It is not surprising that companies prefer to employ only experienced candidates or freshers who have completed supply chain certification courses.
Let’s take a look at various risks that supply chain management is exposed to:
Right from procuring raw material to manufacturing the product to warehousing to product delivery, supply chain management goes through various processes. Even a minute delay in one step/phase can disrupt the entire value chain. For instance, if the suppliers send raw materials even a day late, it can have a severe impact on manufacturing schedule and time of delivery committed to the customer.
Money is the lifeline of any operation and does not exclude supply chain management. If for some reason, the company fails to infuse money into supply chain operations, then everything will come to a halt.
You can imagine what would happen if there is an earthquake, fire, flood or labour strike! In some cases, the inventory of raw materials, unfinished and finished products will be destroyed. In another case such as labour strike, the production and other operations can stop abruptly for weeks to months. This can severely impact the health of the organizations.
During demonetization, most businesses in India had a tough time surviving without cash. There are some processes like payment to daily wage/temporary labourers where the lack of cash can invoke an entire chain of disruption and delays across the organization. Similarly, situations like war, terrorism or severance of bilateral ties with other countries can affect the economy of the country and in turn, the supply chain management of the companies. Even international economic conditions such as stock market crashes can have a direct impact.
In 2014, the leading US retailer Target Corporation received a major setback when hackers stole credit and debit card details of its customers. As the transactions move to electronic and technology platforms, it also increases the risk of security breaches. If the physical and cybersecurity aspects of the supply chain are not taken care of, it can hamper the operations.
A few other risks include changes in the key personnel, top management or team conflicts across various functions of the supply chain. If you want to understand how to mitigate these risks, you should definitely enrol in supply chain certification courses.