Lee J. Drake
Procurement and Risk Management CPMGT/302
Overview Direct Supply has held a place among top manufacturing companies in the United States for several years. However, due to increased competition and customer demand management has decided to implement some changes. The primary change to Direct Supply that has been outlined by management is a supplier global expansion project. Management has its eyes set on China as a new supply base. As with any project, the benefits may be obvious but undertaking the project also comes with its fair share of risks.
Objectives and Resources
In an effort to remain a leader in the global market, Direct Supply has made the decision to expand its supply base into China. Accomplishing this goal however can be a daunting task. A global supply chain needs to be agile and robust in order to meet the needs of multiple markets while simultaneously handling ever changing needs. A supply chain needs to be responsive to customer and organizational needs in terms of products as well as sourcing, manufacturing, transport, environmental and human resource relations. A global expansion project entails much more than simply setting up shop in another country, but luckily there are a number of tools available to help stream line the process.
There are multiple resources that can be utilized to aid in the international transition. Historical data and records for example can be an excellent of information. More and more organizations throughout many different markets are realizing the benefits of globalization and outsourcing with a good portion of them selecting China as their new territory. China is no stranger to incoming supply chains and outsourcing operations. A multitude of information can be collected from organizations that have successfully made the transition.
Another valuable tool that can help with Direct Supply’s expansion project is an organization called The Supply Chain Council (SCC). According to "SCC" (2013), "Supply Chain Council (SCC, supply-chain.org) is a global nonprofit organization whose framework, improvement methodology, and benchmarking tools help member organizations make dramatic and rapid improvements in supply chain performance. SCC established and maintains the supply chain world’s most widely accepted framework for evaluating and comparing supply chain activities and their performance: the Supply Chain Operations Reference (SCOR®) model. The SCOR framework makes it possible for organizations to quickly determine and compare the performance of supply chain and related operations within their organization and against other organizations. SCC and its member volunteers continually advance these tools and provide education on how to leverage them for achieving superior supply chain performance” (About Supply Chain Council). Organizations such as the SCC have come to realize the importance of a globalization as well as the complications that come with it. Utilizing such a group can drastically improve the success rate of such a transition.
In addition to historical information and third party organizations, a thorough understanding of the market, social, economic and business practices of the host country can greatly benefit the supply chain transition. Operating in another country is more than just business. It is essential that Direct Supply is accepted by the host on a social and cultural level.
Risk Management Documentation
There are typically a number of risks associated with any project Direct Supply’s supply expansion project is no exception. In order to identify and deal with risks throughout the course of the project it is necessary to develop a thorough risk management plan. A risk management plan consists of the following information: the risk management process, roles and responsibilities, risk identification, risk analysis, risk response planning, risk monitoring,