Global Supply Chain Management

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University of Applied Sciences and Arts Dortmund, Germany
Faculty of Business Administration

European Master in Project Management

Operational Risks in Global Supply Chain

Project Thesis

Submitted byKashif Shabab

Submitted to Professor Dr. Jan-Philipp Büchler

Summer Semester2011 / 2012

Table of contents
1Introduction6
2Global Supply Chain7

2.1Supply chain management: schools of thought............................................................8

2.1.1 The functional chain awareness school……………...………………………….…....9 2.1.2The linkage/logistics school...…..................................................................................9 2.1.3The information school…..........................................................................................10 2.1.4The integration/process school……………..……………………………...…….…11 2.1.5Critical review………………….…………..…………………………………….…11

2.2Globalization versus internationalization....................................................................12

2.3Advantages of global supply chain.............................................................................13

2.4Disadvantages of global supply chain.........................................................................14

3Risks in Global Supply Chain..15

3.1Sources of risks and uncertainties in global supply chain..........................................16

3.2Global supply chain risk management........................................................................22

4Mitigation Strategies..25
5Conclusion.27
References.28
List of Figures

Figure 1: The Functional Chain Awareness School9
Figure 2: The Linkage/Logistics School10
Figure 3: The Information School11
Figure 4: The Integration/Process School11
Figure 5: Global Supply Chain Risk Management and Mitigation Model23 List of Tables

Table 1: Summary of Risks17
Table 2: Summary of Risks18
Table 3: External Risks in Supply Chain19
Table 4: Internal Risks in Supply Chain19
Table 5: Summary of Risks20
List of Abbreviations

GSC……………………….Global Supply Chain
GSCM………………….....Global Supply Chain Management SCM…………………...….Supply Chain Management
MNC………………...……Multinational Corporation
MNE…………………...…Multinational Enterprise
REE……………………....Rare Earth Minerals
SCRM……………………Supply Chain Risk Management

Dedication

I would like to dedicate this project to my beloved parents and to a special friend who came into my life just like a gentle wind and changed my life forever.

1Introduction

Risk management and contingency planning have been the focal point of many corporations and firms for a long time. This sort of knowledge is reflected in different literatures like finance and insurance, economics, strategic management and international business management. Today in this competitive environment, businesses have to restructure themselves in order to operate internationally and to gain advantage of global markets and products. Firms need to be concerned with the economic, political, competitive, logistical, cultural and infrastructural situations while operating globally. When a firm decides to operate internationally, it makes supply chains more complex. According to Mentzer (2001), the prerequisite for global supply chains is the coordinated flow of goods, services, information and cash within and across the boundaries. The basic purpose of multinational environments is to maximize profits by locating those countries which offer lowest total procurement, manufacturing and assembling costs and market their products in high potential demand centers. Why is it important to consider the entire supply chain while selecting and implementing risk management strategies? It is because many recent events like September 11 terrorist attacks or...
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