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Managing supply chain risk - A HCL perspective

Managing supply chain risk - A HCL perspective

In today’s globally integrated and extended supply chain, even a small disruption at a remote geographical location can cause serious damage to a company’s profitability, market share and at worse its reputation. For example, the 2011 earthquake in Japan and its ensuing Tsunami not just reduced Toyota’s profit by 30% but also its position as the largest automaker in the world. Taiwan floods in 2011 hit manufacturers of hard drives, pushing up prices for internal and external drives and hitting PC makers like Dell and Acer.

A month-long lockout at one of India’s leading automobile plant resulted huge financial loss and supply disruption, resulted in increased waiting time for delivery for customers. Recent studies have revealed that small supply chain disruptions can reduce shareholder value in affected companies by 7%. As a result, managing risks and the associated responses is emerging as a critical component of Supply Chain Management.

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