1. What is the benefit of gaining transparency into the tiers of your supply chain? Provide a specific example from industry of the impact of an organization not understand the tiers of its supply chain.

Transparency and trust are essential when one company relies on another for services or supplies. One of the benefits of single sourcing is a strategic alliance between the two companies (Venkataraman & Pinto, 2018). A strong relationship fostered by transparency is even a risk mitigation strategy utilized by large corporations (Dittmann, 2014). Sapphire screens should have been very transparent; however, Apple discovered eight billion flaws. GT Advanced Technologies was contracted by Apply to supply the sapphire display for the iPhone 6 (Pierce, 2014). Lack of transparency and lack of fulfillment left the company bankrupt and Apple out eight billion dollars. The reverse can also occur. Cyclical or unpredictable sales can leave a supplier who relies heavily on one company for sales in financial trouble if predictions are inaccurate. Japan Display Inc. relies on Apple for over a third of sales, which concerns investors considering Apple also contracts with LG and Sharp (Murai, 2014). Lastly, Han Jin Shipping declared bankruptcy in 2016 and stopped shipping the nearly 10% of Asia-American container shipments it processed (Trowbridge, 2017).

2. What role does continuous improvement have in mitigating supply chain risk? Provide a specific example from industry of a supply chain leader and how they practice continuous improvement.

Supply chain risk spawns from unpredictability and unreliability. Much of this can be controlled with continuous improvement, albeit natural disasters cause risk that is much harder to mitigate. Globalization magnifies complications in the supply chain due to long lead times and a larger number of moving parts. Risk can be effectively minimized through Six Sigma quality efforts and lean manufacturing principles (Dittmann, 2014). Dittmann (2014) also highlights visibility tools to track goods through the supply chain as a means of visibility and risk reduction. Some companies have started to separate suppliers into categories based on the Pareto Principle (Trowbridge, 2017). In another example, UPS lowers risk of supply chain interruption, but training their drivers with virtual reality to exhaust all preparation options before the employee gets behind the wheel (Rosencrance, n.d.)

References

Dittmann, Paul. (2014). Managing Risk in the Global Supply Chain. SupplyChain Management review. Retrieved From: https://www.scmr.com/article/managing_risk_in_the_global_supply_chain (Links to an external site.)

Murai, Reiji. (2014). Apple iPhone 6 Screen Glitch Leaves Supply Chain Scrambling. Supply Chain 247. Retrieved from: https://www.supplychain247.com/article/apple_iphone_6_screen_glitch_leaves_supply_chain_scrambling (Links to an external site.)

Pierce, David. (2014). This is why the iPhone 6 doesn’t have a sapphire screen. The Verge. Retrieved from: https://www.theverge.com/2014/11/19/7250941/the-inside-story-of-why-the-iphone-6-doesnt-have-a-sapphire-screen (Links to an external site.)

Rosencrance, Linda (n.d.) Supply chain risk mitigation strategies on multiple fronts. ERP. Retrieved from: https://searcherp.techtarget.com/feature/Supply-chain-risk-mitigation-strategies-on-multiple-fronts (Links to an external site.)

Trowbridge, Mark (2017). Five Techniques to Manage Supply Chain Risk. Supply Chain 247. Retrieved from: https://www.scmr.com/article/five_techniques_to_manage_supply_chain_risk (Links to an external site.)

Venkataraman, R., & Pinto, J. (2018). CUSTOM: Penn State University MBADM 822 Managing Supply Chains in Global Markets Custom Electronic Edition [VitalSource Bookshelf version]. Thousand Oaks, California: Sage Publications.