The purpose of the assignment is to understand risk in global supply chains. Part A Review the background information regarding the Hudson Jewelers (A) case study content provided. Additionally, obtai

Tactical Risks

Ways to Mitigate Tactical Risks

Inventory Risks

  • Inventory and warehouse stockouts

  • Inventory backorders

  • Imbalances between work centers

  • Add safety stock

  • Change order quantities

  • Reduce lead times

  • Carry extra capacity

  • Add more inventory buffers between stages (work-in-progress)

Capacity Risks

  • Equipment shortage

  • Production capacity shortage

  • Overproduction

  • Equipment breakdowns

  • Employee shortages, strikes, and layoffs

  • Lease/share extra equipment

  • Schedule overtime

  • Multiple suppliers

  • Schedule under time

  • Frequent preventive maintenance

  • Add temporary and backup (float pool) workers

Logistics and Scheduling Risks

  • Supplier quality problems

  • Supplier delivery problems

  • Long lead times for order cycles

  • Poor transportation infrastructure by country

  • Add safety stock

  • Change order quantities

  • Increase lead times

  • Extra local warehouse space

  • Increase quality control inspections

  • Hire new and/or multiple contract manufacturer(s) and supplier(s)

  • Partnerships with local transportation firms

  • Emergency and/or backup plans to ship by air, truck, ship, or rail by alternative shippers

Exhibit 12.3: Tactical Supply Chain Risks and Possible Management Actions

Exhibit 12.4: Strategic Supply Chain Risks and Possible Management Actions

Strategic Risks

Ways to Mitigate Strategic Risks

Global Economic Risks

  • Population and wealth forecasts by country

  • Monetary exchange rates and market size

  • Regulations, taxes, and tariff laws by county

  • Natural disasters such as earthquakes, tsunamis, volcanoes, hurricanes, and droughts.

  • Workforce skills, pay, and availability

  • Franchise and company owned store mix

  • Virtual versus direct sales channel mix

  • Facility locations (headquarters, R&D, factory, warehouse, service centers, distribution hubs, call centers, etc.)

  • Disaster and emergency plans and pre-deployment of resources

  • Multicountry sourcing of suppliers

  • Championing social sustainability in host country

Government Risks

  • Intellectual/patent rights and protection

  • Man-made disasters such as wars, chemical spills, transportation accidents, political revolutions, government instability, and terrorist attacks.

  • Global legal team to defend infringement

  • Facility locations (headquarters, R&D, factory, warehouse, service centers, distribution hubs, call centers, etc.)

  • Disaster and emergency plans and pre-deployment of resources

  • Multicountry outsourcing to contract manufacturers and suppliers

Product Risks

  • Product modifications due to cultural differences

  • Major forecasting errors by product by country

  • Chronic inventory and/or capacity shortages

  • Goods and service (product) obsolescence

  • Better strategic planning and demand forecasting capability (i.e., hire experts, upgrade software and hardware data mining technology including social networks)

  • Cooperative plans to share resources

  • Hire more contract manufacturers and suppliers (outsourcing)

  • Hedging inventory

Security Risks

  • E-commerce system downtime

  • Cybersecurity

  • Theft, fraud, and payoff practices by country

  • Technology upgrades and backup systems and sites

  • Sourcing (hiring) criteria for workforce

  • Corporate value and mission statements