In this section you need to consider another core "job hazard" of the supply manager. When things go right you don't seem to get the applause but if things go wrong- your organization asks you - "Why did'nt you think of this problem before?" Sounds unfair, but comes with the territory and is really interesting if you think about it.And since this is a Leadership (Exam 3) section question the purpose is to have the supply manager think strategically.
Topics here are types of risk like Financial Risk, Operational Risk(Includes SOX), Brand /Reputation Risk, Legal Risk including intellectual property risk. Please consider what each of these mean in the context of an industry. So if you are new to your industry look up past stories of disasters that should be commonly available if you ask around and look up trade magazines in your industry and think of other industries because you will have some kind of scenario in the exam. Each type of "huge problem" in the market is traceable, at least in part, to the risk management programs in the company. There are several examples here, and although the public might have forgotten some of them, you can be sure that the concerned supply managers had to bear criticism on several occasions.
The point though is not that you can overcome "all risk" like the BP oil leak, the egg supply chain, or dealing with different product recalls.However, the supply manager needs to take ownership and have a feedback and action plan when supplies can potentially contribute to a problem in the market.
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