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TUHH

Qries

# Risk Consequences Measures
1 Yield

If a company can't match its supply and demand, an uncertain manufacturing yield could be the culprint. The consequences can be unmet customer demand and subsequent profit loss.

  • Pursue Integrated Financial and Operational Hedging
  • even out demand and supply discrepancies by using local supply/hubs, modules, empowering suppliers or more connectivity
2 Faulty Process Design

Overall Faulty Process Design leading to SC Failure (e.g. Insufficient or non-existent process documentation, outdated processes)

  • Implement proper and required documentation for processes
  • Establish a high degree of employee involvement and responsibiltiy
  • Implement control processes that cannot be bypassed to detect faulty, insuffiecient or outdated elements in a process
3 Design

Faulty Design and Manufacturing can prove as a risk for the supply of downstream companies.

TQM, Lean Manufacturing or Six Sigma

4 Inventory

Excess Inventory and simultaneously falling prices can significantly hurt a companies profit. The rule of thumb says "the larger the product variety, the greater a company's exposure to inventory risk".

  • pooling inventory
  • creating common components across products
  • postponing or delaying till the receipt of orders the last stage of production from which emerges product variety
5 Capacity

Having inadequate capacities can mean, that a company will not be able to meet a demand and/or make a significant loss.

  • Having excess capacity at all times
  • managing capacity more flexible

Sources: 4, pp. 24ff; 4, pp. 71ff; 39