The supply chain plays an irreplaceable role in both global and local business. Connecting suppliers, producers, sellers and customers, this process is a necessary part of delivering goods and services to the public. Businesses work to optimize the performance of their supply chains, minimizing costs and increasing efficiency. However, in order to ensure that each part of the process works smoothly, organizations must be able to account for risk, and resolve it in an organized manner. Supply chain risk management is the process of identifying, understanding and mitigating risks (Risk Methods, n.d.). Problems are accessed on every level of the chain, and resolved in order to ensure that business proceeds smoothly. In order to understand how the supply chain is regulated in practice, this work will be using an example – Nestle.
Case Example – Nestle
Nestle is a multinational company working in the food industry, producing a range of items. In order to manage their supply chain, the company introduced their own programme of improvement. The Achilles Supply Chain Mapping (SCM) Programme promotes supply chain resilience on all levels of the process, and allows large organizations to maintain their brand integrity (Nestle, 2015). According to Nestle, this subscription system connects buyers and suppliers together in a way that ensures a continuous chain. In addition, the company employs an Enterprise Risk Management process, which monitors potential risks throughout the business’ entire structure, including its supply chain (Nestle, 2012). Both of these methods work to improve the stability and resilience of Nestle’s supply chain.
Benefits of Nestle’s Approach
- The use of the supply chain program produces consistent data across the entire supply chain map (Nestle, 2015).
- Suppliers participating in the program are protected, including their privacy concerns.
- The existence of the SCM allows to acquire standardized data (Nestle, 2015).
- A system of risk management anticipates risks and allows to prevent them from the top-down.
- The most efficient supply chain protection system is not applicable to all suppliers.
- Concerns connected with events such as the recent pandemic are not explicitly addressed, providing opportunities for improvement.
Nestle (2012) ‘Carbon Disclosure Project CDP 2012 Investor CDP 2012 Information Request Nestle.’ [online] Nestle.
Nestle (2015) ‘Map your own supply chain.’ [online] Nestle.
Risk Methods. (n.d.) ‘What is Supply Chain Risk Management?’ [online]