Question

Format

Font size 11, single or 1.5 line spacing, 3-4 pages long report to design a supply chain risk management plan (in detail below).

Put additional exhibits in the appendix.

Please choose ONE of the following three specific topics.

Topic #2: Managing (specific) Risks of (Company or Industry Name)’s Supply Chain

Example:         Managing Sourcing Risks of Starbuck’s Supply Chain

                        Managing Transportation Risks of Agriculture Supply Chain

                        Managing Production Uncertainty Risks of Intel’s Supply Chain

                        Managing Commodity Pricing Risk of DuPont’s Supply Chain

Please investigate and analyze a specific type of supply chain risk of a specific company or industry, and develop risk management plan. More specifically, the following guiding questions should be addressed:

Guiding questions

1. What specific risk scenarios and challenges the firm is confronting? Are these scenarios the root causes that you should start managing? Please provide background information based on the company’s fact or relevant facts from other firms in the same industry.
2. How does the company assess or quantify these risks? If they do not, can you suggest some way to do it?
3. What are your suggestions to proactively manage/mitigate these scenarios? Please use the risk management framework to justify your suggestions.
4. Please suggest monitoring mechanisms or management processes to ensure that your suggestions are executed consistently and continuously in the company.

Hints: visit the webpage of the company you are interested, download their annual reports, find the risk exposure section, find the risks that are supply chain related, and do more investigation from there

Answer 1

Starbucks has became leader in providing exclusive coffee to it's customers, where it operates in more than 64 countries with around 27,000 stores. Starbucks is usually involved in vertically integrated supply chain, where company takes part in  every step of its supply chain process,that is  from the coffee bean to the cup of coffee to be sold to ultimate consumers.

When company follows vertical supply chain it has to look after many things to maintain successful supply chain, here Starbucks is facing many risk associated with their supply chain as it has to maintain balance among farmers from around the world who are associated with company, custom roasters, all distribution logistics providers, retail etc.

Main risk involved are,

• Quality supply - As the success of company mainly depends on delivery of quality coffee to it's customers, here company has to maintain reliable relationship with the former who do supply input to the company as per demand hereinorder to procure the high-quality inputs Starbucks is paying around 23% above the market price to it's suppliers. Inorder to maintain good relationship with suppliers it has adopted People and planet-focused initiatives ,where it focuses on wage (including suppliers pay), quality of product and life,sustainable forming practice etc. Inorder to mitigate this problem it should maintain rewarding practice to those formers who maintain monthly supply in time with quality.
• Supply chain members - as Starbucks maintain and manages the supply chain at global level ,which actually involves partners like farmers, custom roasters,logistics providers ,producers of the manufactured items it procures, and retail licensees.inorder to overcome these risk company has involved itself in central decision making process. Inorder to overcome such problems it needs to have suppliers from different corner.

Other than this it faces many challenges like price fluctuation, macro economic factors etc,so it has to consider all these things to have a better supply chain.