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GLOBAL SUPPLY CHAIN NETWORK IN HOSPITALITY INDUSTRY
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GROUP 3
GLOBAL SUPPLY CHAIN NETWORK IN HOSPITALITY INDUSTRY
MEMBERS:
KRISTINE DATIG KAE GARBO DAVE PAMITTAN
Impact of Globalization in Supply Chain Networks
- Globalization in the context of supply chain management describes the method through which a corporation conducts its operations on a worldwide scale.
- Trade globalization gives businesses the chance to access new consumers in new markets, which drastically changes how successful manufacturers must conduct their business.
Impact of Globalization in Supply Chain Networks
Risk Management in Global Supply Chain
What is Risk?
- Risks are defined as a situation involving exposure to danger – in global supply chain, there are many risks that could occur. All risks can have damaging effects to a business, greatly impacting millions, sometimes hundreds of millions in sales or liabilities.
- There are both internal and external risks that can disrupt your supply chain.
Risk Management in Global Supply Chain
External Supply Chain Risks
These global supply chain risks come from the outside of your organization. Risks are ones out of your control. They are harder to predict and typically requires more resources to overcome.
Some of the top external supply chain risks include:
Demand Risks: It occurs when you miscalculate product demand and are often the product of a lack of insight into year-over-year purchasing trends or unpredictable demand
Supply Risks: It occurs when the raw materials your business relies on aren’t delivered on time or at all, thereby causing disruption to the flow of product, material and/or parts.
This includes issues with suppliers, shipments and markets that disrupt production, operations, sales and or projects
Environmental Risks: Environmental risks in supply chain is the direct result of social-economic, political, governmental or environmental issues that affect the timing of any aspect of the supply chain.
Business Risks: It occurs whenever unexpected changes take place with one of the entities you depend on to keep your supply chain running smoothly - for example, the purchase or sale of a supplier company
Internal Supply Chain Risks
Internal risks provide better opportunities for mitigation because they are within your business control.
Manufacturing Risks - Manufacturing risks refer to the possibility that a key component or step of your workflow could be disrupted, causing operations to go off schedule.
Business Risks - Business risks are a product of disruptions to standard personnel, management, reporting, and other essential business processes.
Planning and Control Risks - Planning and control risks are caused by inaccurate forecasting and assessments and poorly planned production and management.
Mitigation and Contingency Risks - Mitigation and contingency risks can occur if your business doesn’t have a contingency plan for supply chain disruptions.
Supply Chain Risk Management
- Supply chain risk management is a process in which businesses take strategic steps to identify risks, assess, and developing ways to mitigate risks within the end-to-end supply chain.
- With the supply chain risk management, you will be able to outperform your competitors and boost market share when a common risk occurs.
Importance of Risk Management
- Risk management is an important process because it empowers a business with the necessary tools so that it can adequately identify and deal with potential risks.
- Risk management is key in eliminating waste and stimulating other best practices within the supply chain. Wasting resources can add risk to the organization and supply chain, so by planning ahead with a good risk management system, materials can be repurposed to avoid waste.
Value of Information in Supply Chain
- Information is essential to supply chain success because it provides the framework on which managers make decisions and supply chain processes carry out transactions.
- A manager cannot know what customers want, how much inventory they have on hand, or when to make or ship more goods without information.
Value of Information in Supply Chain
Bullwhip Effect
- The bullwhip effect is a supply chain phenomenon describing how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels.