How do you manage supply chain risks? ShopSA warns that supply chain risks as well as their potential impact on business performance and shareholder value are on the rise. One of the reasons for this is globalisation, While the connection of global industries and information is beneficial for businesses, risks are no longer isolated and cannot always be mitigated at ground level; they now have far reaching consequences.
Globalisation has opened the world to companies and the concept of expansion is a goal every company aims to achieve for future growth. However, along with globalisation comes modernisation and, owing to this, consumers expect more and more from companies. Mistakes are not easily accepted as technologies to mitigate challenges are available.
However, challenges are still out there. One might ask why certain countries have not modernised? Why is a lack of internet connectivity, cellphone signal and access to technologies so evident in certain parts of Africa, India and Asia, when access to modern technology is at the tip of our fingertips?
While modern technology might be able to cross bridges and oceans it cannot build the infrastructure needed to get it there. Infrastructure costs absurd amounts of money and the resources needed for the realisation of a fully functional infrastructure system is not accessible to many third world countries.
Most of these countries are left behind while the rest of the world spirals forward with the technology boom, leaving a huge gap between the modern and third world, which sometimes seems impossible to bridge. For us, service is a click away, while women in some parts of Africa still need to walk ten kilometers to fetch water.
So, if companies aim to expand into the global sphere, where will they go? If expansion is only aimed at the first world then competition brings it own set of unique challenges. In addition, third world countries host opportunities which cannot be overlooked. Owing to the recent resource boom in Africa, exploration companies are flocking to this region and mine with the technologies suitable for the infrastructure hosted there.
So, how do you manage supply chain risks and how often do you take advantage of the opportunities out there, even though they might seem daunting? Risks are an integral part of supply chain management. One important thing to remember, however, is that companies can no longer hide their mistakes, instead the focus should be on mitigating challenges as soon as they are revealed.
Research is crucial when expanding your business into the global sphere and backup is always necessary. Shareholders need to know of potential risks and the plans to mitigate those should be in place.
Owing to Globalisation, we no longer have the luxury of solving a problem, we need to eliminate it before it takes place.