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This is a broad question and depending on the line of business and section in the supply chain.However, I would say that ;
- Single Sourcing ( OEM or Authorized Agents Etc.)
- Non Reliable Vendor (Quality, Delivery, Responses etc.)
- Advanced Payments without Bank Guarantee
are the most common risks in procurement.
Knowing the location of your supplier's production facilities is important in recognizing their susceptibility to security threats
Ensuring that a supplier can deliver supplies consistently and on time is key to assessing the risk they pose to your supply chain
Assessing the physical security is very important, especially in countries where terrorism is on the rise.
Soliciting information about a supplier's internal processes provides visibility into not only the security, but also the controls put in place during the manufacturing process.
Requesting information on the removal of chemicals used during the manufacturing process, or if the supplier abides by the no child labor law are only two of the important questions in this area
Well this is such a broad question; one can write a book about it. Not doing proper supplier capability analysis; non diversified supplier base, Poor IT infrastructure; Absence of multiple Route plans; Poor inventory management(Stock outs). Non Flexible supply chain design. and most important of all untimely movement of funds.
The core part of supply chain management is to ensure the availability of materials or products at every part of the organization as well as ultimate customers end. There are various key risk factors at procurement/supply chain management but it basically depends on the size and product of the business organization.
Three risk areas are-
1. Single sourcing
2. Absence of strategic planning
3. Absence of Ethics
1 Inappropriate Plans
2. Incomplete Information of In hand Inventory
3. Reliability on single source
Absence of Top rated suppliers in the comparative summary. Poor advertising policy & market analysis.
Contract flaws like:
I think having not a reliable vendor with bad funding, but this can be avoided by doing a check into the business .... doing your homework is key
receiving goods to early or not in time (delays in receiving the goods due to strike, weather or any other transport related problems)
quality issues of a product
Turf charges change ... check your news often and order accordingly
funding/management problems with in the company or the clients
Time, money, quality and business practices (client and internal)
It can be mainly because of dependent on unreliable sources, poor planning and lack of adequate knowledge/coordination among the interdepartmental staff.
There are several factors that threatens supply chain management and they rotate around the five Rs, which not well taken care of can lead to serious losses.
a.The risk of missing the right Quality, Imagine a manufacturer who has missed the quality of the raw material needed for a product? this will lead to a serious loss.
b. Right price, Value for money, this cuts across, whether purchase for production or any other use.
c. Right quantity
d. Right place
e. Right time.
All these can only be achieved through identifying the right suppliers
Thanks for the invitation and sorry for responding late.
1. SUPPLIER GLOBAL LOCATION: When you deal the very first time with a new supplier/ manufacturer, specially from the countries of origin where security threat is known to all. You are not even assured about their manufacturing facility's existence or production quality, commitment to fulfill the terms of agreement.
Solution: Web browsing, verify list of clients of supplier with audit report or other certification if the order value is big enough. No advance payments and prefer LC type suits to you. Arrange samples, use other modes of sources for further verification. If long term plan to buy then prefer to visit. Insurance.
2. GEOGRO- SOCIO-CULTURAL RISK: Procuring from locations having unstable political and socio-cultural factors.
INTERNAL INCOMPITENCY: Incapable to plan properly within a business, lack of understanding the detail of the supply chain and inability to respond timely.
Going with the Single Source, Chosing an incompitent supplier or paying advance to an uncertain supplier are the BUYER'S INTERNAL INCOMPITENCY.
3. BEYOND THE CONTROL DELAY due to unforeseen reason. I am against with the delay due to any other reason because this will be due to POOR PLANNING and miscalculation of KPIs by the purchasing / supply chain department.
4. NATURAL DISASTER THREAT
If manufacturing supply chain, then further risks of
Internal Operations and sales threat.
Breaches of Sale Contract clauses.
Less demand for product for some reason and many other business interruptions.
