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Protecting The Supply Chain Essay

1025 words - 4 pages

The larger a company’s supply chain, the more vulnerable the company becomes. When the company’s suppliers spread further and further away from the company, the company becomes even more vulnerable to political and currency risk, cyber attacks, missed inventory goals, and failed communication with the supply chain. For a company to overcome those potential vulnerabilities, a company must build safeguards into their operations. Those safeguards include a strong corporate backing in supply chain management, solid relationships with suppliers, more attention to forecasting, and a holistic approach to sustainability.
The corporate culture of a company is a critical component to supply chain management (Lee, B.C., et al., 2010). Top level management needs to lend support to operations managers and their efforts to not only build the supply chain but manage the relationships. A part of top level management support is the understanding of the risks associated with entering into a relationship with a supplier. According to Schoenherr, those risks are “the loss of control over the task … a potential degradation of critical capabilities, increased dependency, and financial vulnerability. Additional risks emerge out of market volatility, incomplete specifications, and the inability to measure performance. Risk is usually heightened with a more involved outsourcing arrangement, as more control is transferred to the supplier,” (p. 347). If top level management is not accepting or understanding of those risks, the operations manager’s job becomes strained in building and managing the supply chain. As with any professional relationship, strain can have severe financial consequences. However, the risks stated above can be significantly lessened if the operations manager is allowed the flexibility from top management to strengthen supplier relations.
Supply chain management is increasing in importance because “In today’s hypercompetitive environments in which competition is among supply chain networks rather than individual firms, firms are confronted with the need to effectively manage increasingly extending supply chain activities beyond the boundary of the firm,” (Lee, B.C., et al., 2010, p. 657). As stated previously, the broader the supply chain the more risks the company is open to. The second line of protecting the supply chain is creating strong relationships with the suppliers. The longer a company has a supplier, the stronger the relationship (Bayraktar, 2010), but to get to that point there needs to be similar: corporate and national cultures, vision, technology rate change, and quality information to share (Lee, B.C., et al., 2010). When all of these characteristics align, there is trust and open communication. Since supply chain management can be considered information sharing (Lee, B.C., et al., 2010), trust and open communication are necessary for information sharing to take place. Without trust and open communication, there is a very weak...

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