The larger a company's supply chain, the more vulnerable the company becomes. As the company's suppliers move further away from the company, the company becomes even more vulnerable to political and currency risks, cyber attacks, failure to meet inventory goals, and failure to communicate with the supply chain. For a company to overcome these potential vulnerabilities, it must integrate safeguards into its operations. Such safeguards include strong corporate support in supply chain management, strong supplier relationships, increased focus on forecasting and a holistic approach to sustainability. A company's corporate culture is a critical component of supply chain management (Lee, BC, et al. ., 2010). Senior management must lend support to operations managers and their efforts to not only build the supply chain but also manage relationships. Part of supporting senior management is understanding the risks associated with entering into a relationship with a supplier. According to Schoenherr, such risks are “loss of control over the task… a potential degradation of critical capabilities, increased dependency, and financial vulnerability. Additional risks emerge from market volatility, incomplete specifications and the inability to measure performance. Risk usually increases with a more complex outsourcing arrangement, as more control is transferred to the supplier” (p. 347). If senior management does not accept or understand these risks, the operations manager's job becomes difficult in building and managing the supply chain. As in any professional relationship, tension can have serious financial consequences. However, the risks indicated above can be significantly reduced... in the paper sector... and in medium-sized companies in the food and beverage sector. International Journal of Manufacturing Research, 48(2), 425-451.Heizer, J. & Render, B. (2011). Operations Management (10th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.Klatch, W. (Spring, 2007). How to use supply chain design to reduce forecast friction. Journal ofBusiness Forecasting, 26(1), 23-31.Lee, B.C., et al. (February 2010). Evaluating the antecedents and consequences of supply chain activities: An integrative perspective. International Journal of Production Research, 48(3), 657-682.Lee, H.L. (October 2010). Don't change your supply chain – rethink it from start to finish. HarvardBusiness Review, 88(10), 62-69.Schoenherr, T. (January 2010). Outsourcing decisions in global supply chains: An exploratory multinational investigation. International Journal of Manufacturing Research, 48(2), 343-378.
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