Article:
Supply Chain Risk Management Framework: A Fishbone Analysis Approach
Authors:
Desai, Kiran J., Mayur S. Desai, and Lucy Ojode
Journal:
SAM Advanced Management Journal 80.3 (2015): 34.
Analysis of the article
Fishbone
diagram is a cause and effect models developed by Kaoru Ishikawa in the 1960s
in his efforts of quality management. The diagram is a graphical representation
of causes and effects under investigation. The diagram allows potential causes
of a problem to be broken down into smaller elements and assign a solution to
the problem. This article adapts the
fishbone analysis approach to identify causes of common business risks in a
supply chain. Often, business problems are characterized by multiple causes. The fishbone diagram is a structured way to
establish potential risks as well as break down each cause to basic elements.
The fishbone diagram approach is mainly ideal for a multi-prong problem since
the graphical representation of the cause-effect provides a comprehensive view
of the firm’s supply chain.
The
supply chain is likened to complex biological systems that have potentially
flexible and self-healing, yet vulnerable to some particular weakness. The fishbone diagram is a more appropriate
form of analyzing supply chain risks as it is a systematic approach to solving
complex multifactor problems. As a
supply chain risk management tool, the fishbone diagram has been used in the
article to show how businesses predisposed to risks such as counterfeit
products, defective parts or products, compromised warehousing and storage,
delays in delivery, and others can use the management tool to avoid compromises
of their supply chain. Hence, firms need a structured approach to aid the
analysis of relationships in the supply chain to enable a clear pointer of the
link between the compromised segment and the rest of the supply chain to
evaluate the damage. The fishbone diagram technique is suitable for such
complex problems as it allows graphic labels and displays for each part of the
chain for a methodical overview of possible effects and equivalent causes. The study also discusses four categories of
likely effects: delay, defect, counterfeit, and common errors. Each of the
problems is likely influenced by several factors. The fishbone diagram shows the underlying
causes or significant factors of the specific impact. The factors are discussed
in the fishbone diagram and a corresponding redress afforded in the
responsibility and action planning matrices. The potential causes and effects
are presented separately in a fishbone diagram-thus the four diagrams in the
study.
How it relates to Supply Chain and
Operations
Today's
competitive business is characterized by global sourcing and virtual
corporations. The result is that firms are exposed to ferocious
hypercompetitive dynamics heightened by unanticipated natural disasters and
economic instability. Firms tend to
tighten and secure their input sources in the upstream while focusing on
revenue bases downstream. This result in a broad global sourcing of inputs,
processes, and systems that gives organizations access to global suppliers with
embedded flexibility. At the same time, reach to global customers increases
revenue and enables firms to stay competitive. These capabilities with complex
networks aid global firms to get quickly on track after disasters and
uncontrollable events. However, the benefits are accompanied by challenges of
coordinating sustained value creation to global customers and diverse global
sources.
The
firms operating on a global scale relate to stakeholders such as suppliers and
customers through a supply chain. A supply chain is made of a network of
factories, suppliers, distribution centers, warehouses and retailers, through
which raw materials are purchased, produced, transformed and delivered to
customers. Due to the diversity of firms and their activities, firms require an
effective supply chain management for them to reap its benefits, Hence, the
significance of supply chain management. Supply chain management is comprised of
the set of synchronized activities and decisions to effectively integrate
suppliers, transporters, manufacturers, retailers, warehouses and customers.
Effective management should ensure that the right product reaches its location
in the right quantities and quality and in a timely manner.
Effective
supply chain management is important in integrating the management of partners
in the chain and processes through cooperative relationships. Given the exposure to risk that characterize
today’s firms from complex synchronized coordination of processes with
networks; the importance of supply chain management cannot be
overemphasized. Effective management
allows firms to reduce the form and magnitude of potential risks. The starting point of effective management is
to design a supply chain that has alternative ways of operating in the case of
disrupted. The process is more complex than just planning for contract
manufacturing and identifying other suppliers. A Fishbone Analysis Approach is
importance as Potential risks that may affect a supply chain are fundamentally
embedded in multi-faceted relationships given that global supply chain is a
complex business phenomenon due to its interrelated and integrated parts. A
Fishbone Analysis Approach takes into consideration that the modern supply
chain is extremely complex with numerous tradeoffs. To approach this problem, a
fish bone analysis model helps the firm to graphical represent causes of
specific effects under investigation. It allows potential causes of risks to be
broken down into simpler elements.
Work cited
Desai, Kiran J., Mayur
S. Desai, and Lucy Ojode. "Supply Chain Risk Management Framework: A
Fishbone Analysis." SAM Advanced Management Journal 80.3 (2015): 34.
Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in cheap term papers if you need a similar paper you can place your order from top research paper writing companies.
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