There are a number of potential risks likely to affect the globalization of a supply chain. The potential risk might include political tension, level of conflict within the world, or a specific part of the world at a particular time, the rate at which new technology is adopted successfully, and the effect of weather, climate, and natural disasters (Martinez, 2016). This paper gives an in-depth analysis of these risks and their impact on Amazon’s global supply chain.
A supply chain is a network that a company or organization has between its suppliers to produce and distribute its products to the final consumer. This network involves different activities, entities, information, people, and resources. The supply chain may also represent the processes required to get a product or service from the original state to the final consumer. Companies must have efficient supply chains to reduce operating costs hence remain competitive in the business landscape.
Delegate your assignment to our experts and they will do the rest.
Politics of the world play an essential role in influencing decisions and laws that are enacted, which is likely to affect the success or failure of the supply chain. Countries may implement domestic regulations such as traceability rules for perishables or the electronic tracking device as a requirement for the shipment and trucking industry (Martinez, 2016). All these changes are stipulated in what is known as the Supply Chain Dive. In addition, changes in the tax regimes for products are controlled by political power in a given country. Such a move may be aimed at promoting products produced in the respective country to ensure the country is self-sufficient. To achieve this, high taxes are imposed on products originating from other countries. Since Amazon has different vendors from different countries has to factor in all these issues in the pricing models for the respective products (Martinez, 2016). Some political decisions threaten to undo the status quo, such as the United Kingdom’s decision to leave the European Union. This is likely to affect how Amazon conducts its activities in the country, as the rules of engagement are likely to change as the country has abandoned the laws and regulations that controlled the European countries. From this, we see that political turbulence in a country involved in the global supply chain can significantly influence success.
The adaptation and implementation of emerging technology are crucial in the global supply chain. Blockchain technology has spread like a bushfire in the past decade is a major topic of discussion in mainstream and social media. This is due to the hype attached to Bitcoin, Ethereum, and other major cryptocurrencies (Eisenberg, 2018). Due to its growth and potential for future use, it has implications on the global supply chain. Therefore integrating the blockchain technology into supply chain management is accompanied by several risk factors such as vendor risks, lack of standards and regulations, untested code, and endpoint vulnerabilities (Eisenberg, 2018). The lack of regulations and standards in the blockchain technology poses considerable risk of the technology being applied to global supply chain management. Regulations and standards must be put in place to ensure a blockchain-enabled end to end global supply chain management solutions. In addition, blockchain technology has not been sufficiently tested on a large scale. The current state of blockchains is at its largest, which means it is entering unchartered territory with the everyday expansion (Eisenberg, 2018). Currently, the technology has not experienced enough risks and hence requires major changes, as the future remains relatively unknown.
The weather, which includes natural disasters, does affect Amazon’s global supply chain (“Global Supply Chains Are Threatened by Climate Change,” 2016). This is because the movement of goods from the point of production to the warehouses for storage and finally to the final consumer may experience high costs due to challenging weather and natural disasters. For example, some products may be shipped from one continent to another, and during shipment, there emerges a massive sea storm, which leads to ships changing the routes to avoid any disaster. This, therefore, leads to customers experiencing delays in receiving their products. Sometimes the natural disasters caused by extreme weather such as hurricanes may destroy the company’s warehouses, making it difficult for deliveries to be made to the customers. To mitigate this risk on the supply chain, Kettering University Online (2016)proposes that the company employ the following steps.
Be organized by having detailed documentation and guidelines that stipulate the supply chain emergency operations strategy.
Transparency, it is evident that internal and external uncertainty creates havoc, which leads to other problems. The company needs to be transparent and open with the staff, suppliers, and partners promptly, as this is crucial for the recovery process.
Partnerships, the company should build stable supply chain partnerships as this helps to maneuver through disasters.
Flexibility – For a company to recover from natural disasters, a high level of flexibility is required, as adjustments need to be made, including re-routing of suppliers, and schedule changes.
From the analysis above, it is evident that weather, climate, and the potential effect of natural disasters play a critical role in the end to end of a global supply chain. Therefore, it is apparent that these are major factors with significant influence and need proper mitigation measures to be successfully combated.
In conclusion, this paper aimed to pinpoint the significant factors in global supply chain risk mitigation. It was clearly illustrated by sound evidence that political power and stability, emerging technology, climate, and the potential of natural disasters significantly influence the success and efficiency of Amazon’s end-to-end global supply chain.
Works Cited
Eisenberg, A. (2018). 5 Blockchain Security Risks and How to Reduce Them. Ignite , www.igniteoutsourcing.com/publications/blockchain-security-vulnerabilities-risks/
Martinez, D. (2016). Top 10 Global Supply Chain Risks. SCM | Supply Chain Digital , James Henderson, www.supplychaindigital.com/top10/top-10-global-supply-chain-risks .
“ Global Supply Chains Are Threatened by Climate Change.” Planet Experts , www.planetexperts.com/global-supply-chains-threatened-climate-change/ .
Kettering University Online. (2016). The Impact of Natural Disasters on Global Supply Chains. 10 Critical Decisions of Operations Management | Kettering University Online , www.online.kettering.edu/news/2016/06/07/impact-natural-disasters-global-supply-chains .
