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Blog details
admin admin Hi Friends hope all are you doing well and manages your risk as well, you all must agree that in each & every moment of life risk is involved. For buyers risk management is professional matter, if buyer overlooks this aspect than it could be proved a costlier matter to his organization.
In supply chain scenario anything which could stop the normal and desired flow of supply chain is “risk”, and to manage the risk lot of processes which includes micro analysis and theoretical concepts are available in market, lot of books has already been written on this, even some software on risk management is also available now a days. As per my understanding there is only two types of risk, one is man created and other is God created. The Risk which is created by God known as Force majeure and the risk created by man could be result of negligence, lack of understanding, attitude & behavioral issues, etc.
For force majeure Buyers have very limited options , in the events of floods , earthquakes and other kind of natural calamities we have lot of examples where big companies also incur huge loses due the such events, but the cases of man created risk could be minimized by keeping some points in mind .
The first important thing is analysis, buyer must do some good amount of analysis about vendor capacity and capabilities before placing an order, it must be ensure that supplier is capable to make or supply correct material to buyer, vendor’s financial capability is also very important, if you are giving order to vendor than you must check that vendor is technically (if material is engineering good or technical product ) & financially capable to execute your order. If any test & calibration procedure is needed to perform than buyer should take all test certificates, guarantee certificates with material. If prior inspection is needed than it should be done by proficient person.
Second thing which buyer has to take care is delivery schedule, buyer must aware about process of vendor for delivery, if vendor commits any delivery time than it’s buyer duty to make sure that without fail delivery should take place, a delivery follow up chart as per vendor process should be prepared and continuous follow up must be done, buyer must keep updated himself about the position of material so in case due to any reason there is a possibility of delay, buyer can figure out some way out at his production or supply area.
Third & last important thing is alternative, please be noted that in spite of our all precautions problem may arise from the door which would never expected, in supply chain every problem could have more than one solution, for buyers continuous market study is integral part of the job if you aware about your surrounding than only you can find alternative doors.
Friends risk is always involved in every step of purchasing but it is always buyer choice how to mitigate.
Good Bye & take care.
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