Navigating Turbulent Market Conditions: Supply Chain Management Solutions - Research Paper

Introduction

The current marketplace is operated by uncertain and turbulent conditions. The turbulence of the market has tended to numerous reasons such as lack of innovation, production constraint, lack of skilled labor, technology life cycle and shorten product, and demand uncertainty. Lately, the supply chain management subject has been prioritized among various industry experts and researchers. Every organization often has a mission and vision that increases or maximizes the value of the customer and attain a sustainable competitive benefit. However, to achieve the mission and vision, there are numerous challenges and risks which can vastly affect the performance of the supply chain (Carter and Rogers, 2008, ) Moreover, risks and challenges have always been part of the operation of an organization and both stakeholders and shareholders should adopt strategies to mitigate the depicted risks. The paper, therefore, is premised on a discussion regarding the potential challenges or risks that should be considered to achieve a stable and sustainable supply chain as well as the proposed recommendations to organizations if they want to develop a stable and sustainable supply chain.

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The global perspective of small to medium-sized enterprises (SMEs) act is an essential element of the growth of an economy. The depicted SMEs generate various benefits to developing nations such as India regarding job creation, which raises the average earnings of an individual as well as innovation (Mangla et al., 2014, 118). Thus, due to pressure from competitors and the volatile demand of customers, today's businesses have restructured themselves to function on a global basis to take advantage of the capital markets, technology, and global products. However, several concerns arise in operating in a global market such as cultural, economic, social, and political factors. When an organization operates on a global basis, there are high chances that its network of the supply chain will be more complex (Reuter et al., 2010, 49). Thus, from the depicted, there are numerous risks and challenges in the supply chain irrespective of the size of an organization. The risks are categorized into external risks, internal risks, demand risks, and supply risks, which are common to both small scale and large-scale enterprises (Zailani et al., 2012, 332).

In most cases, large-scale enterprises often face numerous challenges or risks in their supply chain and they often find ways of applying proper strategies to mitigate the generated risks. However, SMEs on the other hand, often do not have proper practices of risk management as they face numerous unhidden and hidden challenges in their supply chain. Examples of the risks might be increased customs duty, volatile demand, limited investment, poor production planning, machine failures, supplier failure to deliver, capacity shortage of suppliers, price volatility, and poor-quality raw materials. To mitigate the depicted risks, SMEs have to generate suitable strategies to achieve a stable and sustainable supply chain.

Potential Challenges/Risks to be Considered to Achieve a Sustainable and Stable Supply Chain

Risks often originate from any uncertainty forms in a specific process or the environment. A risk or challenge is always relative to the ability to predict and identify its effects and impacts in advance. Additionally, it is relative to the prevention ability of risk occurrence in time and to decrease the outcomes or results of the risk in case it occurs.

Supply Risks

In the supply chain, risks or challenges can always take place in supplying a service or product to a client in terms of timely delivery, cost, and impact on the image. The supply and sourcing of services and products to consumers and businesses is always complex and with it, the management and assessment of the associated risk. Some modeling and techniques of risk management can always be applied to the supply chain but in most cases, they will not be as mathematically effective as in the insurance industry because there is an inequivalent comparable body of experience and knowledge for all the potential outcomes to be quantified (Mangla et al., 2014, 121). The supply chain risks often affect and impact on a wide range of stakeholders. Moreover, the supply chain direct players who can be affected include the customers, retailers, the logistics, and the producers. Also, there are the politicians, the consumer pressure groups, finance providers, to mention but a few (Dubey et al., 2017, 1121).

External Risks

Externals risks or challenges are primarily driven by concerns that lie outside of business' direct influence. The action includes the political situation nationally as well as the volatility of the political landscape globally. In most cases, attempting the prediction of the decision of politicians might not be any person's priority action because it might need some kind of modern crystal-style ball. However, it is important to maintain and cope with what might potentially affect the operations of the business as well as a mitigation or recovery plan (Dubey et al., 2017, 1124). The action often has a primary impact on interest rates and financial markets that in the end, often affect the decision-making of the business. The effect of the depicted can be seen when "going green for the electric vehicles," the case study worked on using the existing resources, stopped borrowing for investment, and reduced variable costs. Buying commodities and raw materials are always underwritten by financial institutions and banks (Reuter et al., 2010, 51).

Accountability and transparency of where certain products are sourced from, the condition in which the product was produced, and where the product is intended to be shipped or transported is always the essential criteria for the financial decision. Any unethical risks from the source of the product might affect and impact the ability of the involved business or firm to access its future funds, which is always a challenge and a risk for the business and the bank (Mangla et al., 2015, 381). The action implies that any individual or firm involved in material sourcing must have different procedures in place to ascertain that the company or the organization is not being exposed to risks. additionally, the financing institution is always open to public scrutiny that needs management. In the social media age, data that might have been not available or withheld previously to the press might be accessible to different people and can promptly go viral. The action implies that the impact or effect of risk on reputation is always less quantifiable and higher in advance (Reuter et al., 2010, 51).

Nevertheless, third parties and suppliers in a specific procedure can be exposed if the control over what is taking place is insufficient. For example, the case of the European horsemeat scandal is an instance of risk with far-reaching impacts. The involved suppliers in the chain were reliant on the provided data on the meat source. The high input price of the meat led to many suppliers outsourcing their supply to other small subcontractors, and, they will either turn a blind eye to the product description inconsistencies or trust the delivery process (Mangla et al., 2015, 381). Moreover, the costumers testing the source and quality of the meat, in business, act as an additional checkpoint in the depicted procedure and expose the raised concerns. The risk impact generated from the scene is the public image or reputation of the retailer first because in most cases, the supplier is always unknown to the consumers or customers. However, the reverse of the depicted procedure can be termed as the opportunity for people who operate and control their chain of supply and can prove the supplied product authenticity. In the depicted scenario, local butchers who can always trace their animal products back to the animals from which the product originated. In short, the action is always about weighing up the challenges or risks to revenue loss and image, and the support of the consumer.

Internal Risks

The internal chain of supply in many different areas in the current world involves moving, marketing, researching, and producing services and products across different geographical areas each having various socio-cultural and political components. In most cases, local knowledge assists to weigh up the relative operating risk or challenge in a region or nation at large (Zailani et al., 2012, 332). To an outsider, what may seem treacherous is always differently pictured by a person living or involved in the environment. Therefore, the depicted knowledge must always be incorporated into the process of managing and mitigating risks. Within an internal business, among the major risks is understanding the supply chain detail and taking or making the right decisions at the right time. The senior management must often balance the ambitions of growth with what the business can afford during investment. In most large enterprises, the business leaders are always focused on managing the perceptions of the external and internal shareholders as well as depending on their structures of management and models of operation to know the relevant processes (Curkovic and Sroufe, 201, 79). The action is a decision-making element that must assess real-time risks as well as steer the business to the desired direction. Thus, the senior management might not possess all the required and available data at all times to assess the challenges and risks in process operation.

Operational and Demand Risks

In the supply chain, operational risks can take place where the senior management believes that they operate a mature and robust chain of supply that ticks all the boxes of the audit. The optimization of costs implies that the decisions of the business are made away from the main procedures and thus, become slower at the end (Chaabane et al., 2012, 39). For instance, in the planning area, products, services, and various processes of decision-making that are attached to the involved process are always very complex. However, individuals who act on the depicted procedures and make decisions might use their own generated ways of operating when faced with different cases of demand. There are cases where on the one hand, there is a specific theoretical picture of what is or should be planned versus the reality of how the generated production is functionally driven on a basis of cost per unit (Curkovic and Sroufe, 201, 86). In most cases, the erratic satisfying demand often operates conversely to the requirements of effective and efficient manufacturing. The planner, therefore, will always use the excuse to decide or plan ways of satisfying the production metrics requirements. The depicted issues are always compounded as systems by data quality. Moreover, gut feel and spreadsheets often override the quantitative analysis (Zailani et al., 2012, 336).

In most cases, the consequences are always increased stock holdings to meet the desired peaks of demand instead of optimum product flow through the supply chain, which costs suboptimum logistics, storage, and capital. In the production process, the focus of cost can always remove the agility needed to respond to demand if the actions are taken or decisions made are purely within the function. The general risk or challenge to the business then becomes the inability to timely respond to requests, delays, loss of orders, and impacts on the services to the customer might have vast cost implications than the normal marginal saving (Chakrabarty and Bass, 2015, 492). Knowledge is another risk because it some instances, local knowledge can reduce some risk through the provision of body competence and experience to deal with concerns in an appropriat...