Analysing Risks in the Supply Chain
Table of Contents
1. Introduction
In a fast paced world a stringent Supply Chain Management (SCM) will always act as a competitive advantage and will be the key to what sets business apart in terms of financial performance. This is also further supported by Gunasekaran et al., (2004) that SCM has been increasingly a major component of competitive strategy to improve organizational productivity and profitability. Therefore in order to respond to constantly changing customer preferences, an efficient and effective supply chain is a paramount to fulfil real time requirements and improve the performance of the business. However one needs to consider that ever increasing costs, strive towards globalization and outsourcing have made the supply chain more vulnerable to disruptions. Murugesan et al. (2013) reports that this is due to shorter product life cycles, the dynamic environment and higher dependency on external vendors. Consequently this can create considerable financial difficulties resulting in a tarnished brand image, followed by loss in demand and potentially security issues Jüttner et al (2003) defines supply chain risk as ‘’any risk for the information, material and product flows from original supplier to the delivery of the final product for the end-user’’. In order to achieve enhanced performance, management should strive to reduce uncertainties in the supply chain network and aim to gain adaptability, alignment and agility, as main drivers to mitigate supply chain risks (Lee, 2004) This leads us to the conclusion that managing supply chain risk should be an important priority for all companies with global aspirations and desire to accomplish high sales, flexibility and quick response to meet changing customer needs. This is not an exception for the fashion industry as well. Many fashion retailers are outsourcing manufacturing and extending their global supply base due to rising labour costs in home countries that have been eroding
1. Introduction
In a fast paced world a stringent Supply Chain Management (SCM) will always act as a competitive advantage and will be the key to what sets business apart in terms of financial performance. This is also further supported by Gunasekaran et al., (2004) that SCM has been increasingly a major component of competitive strategy to improve organizational productivity and profitability. Therefore in order to respond to constantly changing customer preferences, an efficient and effective supply chain is a paramount to fulfil real time requirements and improve the performance of the business. However one needs to consider that ever increasing costs, strive towards globalization and outsourcing have made the supply chain more vulnerable to disruptions. Murugesan et al. (2013) reports that this is due to shorter product life cycles, the dynamic environment and higher dependency on external vendors. Consequently this can create considerable financial difficulties resulting in a tarnished brand image, followed by loss in demand and potentially security issues Jüttner et al (2003) defines supply chain risk as ‘’any risk for the information, material and product flows from original supplier to the delivery of the final product for the end-user’’. In order to achieve enhanced performance, management should strive to reduce uncertainties in the supply chain network and aim to gain adaptability, alignment and agility, as main drivers to mitigate supply chain risks (Lee, 2004) This leads us to the conclusion that managing supply chain risk should be an important priority for all companies with global aspirations and desire to accomplish high sales, flexibility and quick response to meet changing customer needs. This is not an exception for the fashion industry as well. Many fashion retailers are outsourcing manufacturing and extending their global supply base due to rising labour costs in home countries that have been eroding
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