Risk Management in supply chain management Essay

Risk Management in supply chain management - Essay Example Some of the salient features that define the organizational attributes in modern times are reduced inventories, effect supplies, staggeringly reduced cycle times, effective transportation mechanisms, further enhanced communication means both outside and inside the organization and factory. These all have been in practice in many organizations and are another name for successful supply chain management. Supply chain management is termed as chain and structure that defines all important elements of the process which contribute towards the output. In other words all the stake holders who have an impact in either way constitute a supply chain. It can be the transportation, can be the personnel, can be the policy, can be the objectives and can various other variables (Mentzer, 2011). The risks so faced can have various severe negative repercussions on the industry. It can lead to a financial loss, it can lead to mistrust, it can further lead to loss of contracts in severe cases, and most importantly could lead to losing the customers who are considered as the pivot towards the success or failure of any organization since their response and liking level of a certain industry can take any industry either way. Supply chain impacts rest of the industry activities in a direct manner. Supply chain risks identification and ultimately elimination and mitigation can result in better working environment, improved productivity, reduced un certainty, and various other factors that are non beneficial towards the organization. The entire risk phenomena can be split into four components which are: The Risk Sources: Supply Chain Itself: Risk mitigation Strategies: Adverse effects of Risks: Supply chain itself Risk Mitigation Strategies These are the four basic units which constitute a total discipline and each of these must be taken into consideration (Juttner, Peck, & Christopher, 2003). The relationship works in a dependent manner, the first is the source of risk, which falls und er the initial phase, and its identification is very vital. This is followed by its adverse affects, and underneath it is the supply chain itself that is faced by the challenges and risks. Finally, the most important factor is the constitution of risk mitigation strategies, which could be prior to the occurrence of event or post event, however risk mitigation strategies are more successful and of more impact if implemented prior to the occurrence. The strategies so made must be able to work in a preemptive manner and should work on the principle of prevention rather than correction. Risks could be either from internal sources, or the external sources, or the organization itself. The last couple of decades saw many events that made all the stakeholders realize that risk management in the field of supply chain has become inevitable and proper actions must be taken to minimize its impact. For this purpose, it has been largely implemented at various organizations of large, medium and sm all sizes, and more emphasis is being laid on its implementation at every level of industry. For this reason, a more systemic and structured approach is in practice internationally which ensures covering all the areas of that are necessary to be addressed. Level of