The following is the authors’ review of three articles from journals relating to the Operations Management 2 Course. Each of the articles will be reviewed and analysed as to their relevance to a particular or number of subjects of the course.
Perspective on Risk Management in supply chains; Journal of Operations Management 27 2009 (114-118) @ 2009 Elsevier B.V. All rights reserved
The article focuses on managing risk in supply chains and highlight how important this area has increasingly become over the last number of years. It highlights a number of key trends happening at present such as increased reliance on suppliers, cross border supply chains; including that of developing countries, the globalization of markets. More and more firms outsourcing to gain or utilise specialists skill sets by increasing innovation and the increasing reliance in information technology. This helps and makes it possible to get more control and have greater co-ordination that a firm can exert over supply chains. All this basically means firms now have increased outsourcing and reliance of cross border suppliers in the areas of research and of manufacturing.
While as a firm this all presents increased global strategic options for competitive advantages in their industries it does also have the adverse effect of the increased and heightened likelihood of adverse events and risks affecting your supply chain which can not only affect the normal running of these firms but can have adverse and detrimental effects on a firms bottom line, reputation and more important market share and shareholder confidence.
Some example of such occurrences have been the Melamine found in infant food/powdered milk in China) and the catastrophic building collapse in Bangladesh of a clothing manufacturing plant in 2012 which claimed many hundreds of lives due to improper building regulations and poor management , this company provided clothes for none other than one of Ireland’s well-known brands Penney’s which had an effect on their trade in both Ireland and the UK when their connection to this was documented in the media soon after this disaster.
The article tends to focus on how practioners and academics are paying more attention to supply chain risks and its impact on management. The article mainly highlights 2 key areas
1) Supply Chain Risk Management (SCRM) as an increasingly key investigative in operations and supply chain management.
2) Offer possible new methods and theories dealing with SCRM.
What is Supply Chain Risk Management? The article infers that it is a strategic management activity in so far as it can affect a number of company areas such as operational, marketing and financial. In the context of the article SCRM is defined as the “sources of risk, magnitude of risk and its relationship to business objectives, and threat of disruption in supply chains” (Duncan 1972). SCRM is effective in helping make decisions that maximise and align...