In: Operations Management
What are some risks of a Queens corporation managing global supply chain? Provide example of political Risk and Currency Risk?
answer-
Some of the risks which Queens corporation can face by Managing global supply chain are-
Political risks- This is one of the uncontrollable and high intensity risk because when a Company operate at global level then it supplies product in different foreign countries. Every country have thier own government, laws and regulations which can affect supply chain of Queens corporation.For example- Trade restrictions of US companies in China or high tarrif on transporting and supplying. In Western Europe, Brexit has had an adverse effect on trade, creating volatility and weakening the British pound. Without cohesive and consistent governance, an international supply chain can run into problems at checkpoints and borders.
Currency Risks- Queens corporations can also face currency risk because exchange rates of currency can fluctuate and they are not certain in nature. for example- If a queens corpration contracted with foreign company to supply its products and wanted payment in Euros but when contract was completed and it was time to payment then value of EUROs declined in the market. This cause loss to the company.
Enviromental risks- Envrionent is also the risks in managing global supply chain. Natural disasters (e.g. earthquakes) and extreme weather are within this category, including potential sea level rises can affect supply chain.
The current example of Global pandemic Corona virus has affected supply chain of every company at global level in very negative way. This has caused billions of dollars loss to many companies like Amazon, Alibaba etc. This can same happened to Queens corporation.