Question

Write a 250 word review on Global Logistics and risk managment

Answer 1

Due to the globalization drive, enterprises are focusing on global sourcing to bring efficiency, quality and reduction in cost in production. It causes them to build global logistics & supply management chain that is spread into the diverse geographical areas across the different nations. It creates opportunity to expand the business and compete in the international market, but it also brings different types of risk the business. Hence, there is a requirement to bring risk management framework in place so that different types of risk arising out of the specific areas, are managed.
The global logistics management creates opportunity as it brings cost advantage while maintaining the quality. For example, Walmart sourcing its white label goods from China or Ford company sourcing automobile products from the Latin American countries, help to not only compete, but also get easy access to the new overseas market. Here, it is important to complement the global logistics function with the risk management practices. The first risk management is to bring compatibility in different commercial & logistics and taxation prevalent in different countries that can the hurdle in smooth supply of goods from one location to another location while passing through the different geographical areas. The second risk management practice is to educate, train and make provisions at the end of supplier to prevent the shortage in supply that can cause stoppage of the work. Since, companies work on low inventory level, then efficient supplier services are very important and risk management has to ensure it. The third risk management is to reduce the damage due to the natural disaster taking lace and disturbing the international logistics supply.

Since, there are different types of risks, so these risk can be categorized into the controllable and non-controllable risk and take initiatives as a part of risk management to either eliminate or reduce the damage and make contingent provisions to achieve efficiency in global logistics management.