The Role of Supply Chain Risk Management in Company

Topic: Logistics
Words: 1131 Pages: 4

Supply chain risk management encompasses taking a strategic approach to identify, assess and mitigate risk in the company’s end-to-end supply chain. The demanding and competitive pressure in today’s global market has influenced businesses to restructure themselves to carry out their operations on a worldwide basis to take advantage of both local and international market niche. However, as companies continue to develop and markets continue to be competitive, there are various risks, such as supply chain risks, that these firms face during their operations. Therefore in response to mitigate and manage these risks, multiple scholars have developed procedures and methods that companies may follow to ensure their safety and soundness in their supply chain activities. For instance, Manuj and Mentzers (2008) have developed an international supply chain management framework model that companies can utilize as a blueprint in their supply operations. The framework consists of five steps: risk identification, risk assessment and evaluation, risk management strategies, implementation of the supply chain risk management strategies, and mitigation of the supply chain risks. Based on supply chain risk management, this paper seeks to evaluate and examine Apple, Inc., a world technological corporation.

Risk Identification

Following the rapid developments and stiff competition brought by the technological advancements, companies have developed strategies to be exceptional in the international market. On the contrary, Apple Inc., is in danger of losing its competitive advantage to its biggest rivals, Huawei and Samsung, which are significantly enhancing their connections with their respective suppliers (Culpan, 2017). The focal reason is that Apple’s iOS platform has been highly criticized by users, prompting the customers to reconsider remaining loyal Apple customers or switching to other companies like Samsung and Huawei. Like any other epidemic, the coronavirus pandemic has harmed innumerable lives in terms of health and economic conditions.

Therefore, the diseases had an adverse impact on companies, both international and non-international, and Apple Company is not an exception. Furthermore, the coronavirus stemmed from China, Apple’s biggest supplier. This exposed the company to a risk of not being able to manufacture new items because of the stringent restrictions that the Chinese government put in place to curb the disease, including grounding the flights (Clarke et al., 2019). Overall, the company was the first to suffer from the supply risks because the pandemic was first discovered in its supply base. This is due to policies put in place to curb the pandemic.

Risk Assessment and Evaluation

The second stage of risk assessment and evaluation outlines that not all risks have detrimental effects to the supply chain. According to Manuj and Mentzer (2008), some particular risks pose damaging effects to the supply chain while others safeguard it from other threats. These risks directly impact Apple’s supply chain in various ways. For instance, the immediate impact would mean lower profits for the company. This is because Apple’s revenue is heavily reliant on its products.

Additionally, due to the coronavirus pandemic, the likelihood and severity of the supply chain disruption on the company are significant. Moreover, even if the supply risk is not the worst-case scenario for the company, it must find alternative sources of supply to prevent the adverse experiences brought by the coronavirus pandemic (Purnanandam, 2020). Following these reasons, it is eminent that supply risk is a severe hazard to Apple Inc. And that the company should objectively assess and evaluate the risk before it turns into a disaster.

Risk Management Strategy Selection

The third stage of the excellent selection of risk management details that adopting effective and efficient solutions to address the detected and evaluated risk is crucial. Collins (2020) argues that while the coronavirus has had a detrimental effect on the company’s supply chain, the business still has measures to put in place. To ensure that they continue with their operations to satisfy the global production responsibility. The organization is working on supply risk solutions to uphold its crucial performance in the market and generate value for its stakeholder’s purnanandam (2020). The company is implementing risk hedging and supply chain strategies based on risk management selection strategy knowledge, focusing on pooling and sharing risks. Risk hedging is the optimal management technique to select for the supply risks with high supply uncertainty and low demand unpredictability.

Implementation of Supply Chain Risk Management Strategy(s)

The implementation of the supply chain risk management strategies details that the company should implement the approaches chosen in the third stage to examine whether they can be used to mitigate the supply chain risk or not. Implementing strategies like hedging requires several factors such as leadership, discipline, commitment, and creativity, among others (Manuj and Mentzer, 2008). To implement risk hedging and supply chain, Apple Company must address two key elements. First, it needs to maintain the stock market reactions. Second, it must be conscious of the microeconomic issues outside its control, such as exchange rates and product prices, which might influence the demand and supply of the company’s goods and services. Apple Company needs to consider these two primary factors to implement risk hedging and supply chain. Moreover, it needs to be well prepared for any outcome that may result from implementing the chosen strategies.

Mitigation of Supply Chain Risks

Supply chain risk mitigation is the ultimate phase of the entire process of supply chain risk and management. It is the expected outcome of identifying, assessing, and implementing risk management techniques. Culpan (2017) argues that the apple company must put more effort and work on its supply risk in order to remain competitive in the global market. This last step may not completely eliminate all the menaces. This is why hazards should not be avoided or eliminated but somewhat mitigated (Manuj and Mentzer, 2008). Even after adopting and executing risk hedging and supply chain management, Apple’s supply risk may not be solved. Due to the company’s desired outcome, the problem may be mitigated. The essential notion is that if the company is ill-fated with the results, it can always repeat the process.

In conclusion, this paper assessed Apple Inc. as a focal company in the international technology, based on the global supply chain risk management and mitigated approach. It was feasible to select one of its risks, assess and search for potential solutions, implement strategies, and finally reduce the chosen supply chain risk using this framework. This implies that, depending on the risk, the managers may develop different mitigation strategies to solve the problem. As a result, future research should seek to construct a causal model that tests the hypothesis that controlling and mitigating supply chain risks improves supply chain performance. Furthermore, research should address how risk management influences global supply chain performance and the moderating and mediating variables. Managers working in global supply chains will be overwhelmed by the complexity and size of the hazards unless further study is conducted.


Clarke, T., Boersma, M., Clarke, T., O’Brien, J., & O’Kelley, J. (2019). Global corporations and global value chains: The disaggregation of corporations. The Oxford Handbook of the Corporation, 318-365.

Collins, J. (2020). Apple’s supply chain is at risk from the coronavirus. Forbes. Web.

Culpan, T. (2017). Apple’s supply chain struggles are a major threat. Industry Week. Web.

Manuj, I., and Mentzer, J. T. (2008). Global supply chain risk management strategies. Emerald Publishing. Web.

Purnanandam, A. (2020). Apple, Coronavirus, and risk-management. Forbes. Web.

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