Maritime Management And Leadership: Market Assessment Answer

Today’s organizations operate in a highly dynamic and uncertain market conditions; therefore, it is important for them to have a contingency arrangements or strategies in place to ensure that the organization continues to operate in the event of resource supply failure. Contingency plans are like an insurance plan that aims at protecting the interests of the organization in case something goes wrong. In order to eliminate the dangers of worldwide and complex supply bases organizations are required to formulate and implement effective procedures and systems that are powered by innovation. In addition, organizations are required to train their employees for dealing with such supply side uncertainties to take innovative and cost effective decisions to ensure steady supply of resources (Kern et al. 2012).

In order to eliminate supply disruptions organization should employ forward planning and estimating the probable supply side disturbances instead of cushion up stock that increases organization’s expenses and locks scarce recourses. One of the methods that can be employed to determine future contingencies are scenario analysis. Moreover, to ensure the uninterrupted supply of materials the whole supply chain elements or touch points should be made responsible rather than keeping large volumes of raw materials or work in progress goods at the manufacturing point. Holding some volumes of supply items at suppliers’ warehouse and transits assists in enhancing the supply chain efficiency. In addition, suppliers and transporters have better understanding of the market conditions, and can easily anticipate disturbances in supply and can take more proactive approach to maintain steady supply (Kerzner 2013).

Other strategies that can be applied are making provisions for backup sources or suppliers, or encouraging some dual source capability closer to the production facility. However, these measures require some investment and involve considerable cost. Today’s organizations are becoming very competitive and having large volumes of inventory is too costly for the organization and can result in losing overall competitiveness in the market. Therefore, keeping large volume of inventory is not a permanent solution as no company can have enough stock buffers to cover all contingencies. In this context, postponement strategy can be an effective strategy. Companies can postpone adding value by leaving materials in semi-finished state for as long as possible, depending on the need (Ruiz-Torres et al. 2013). 

References

Kern, D., Moser, R., Hartmann, E. and Moder, M., 2012. Supply risk management: model development and empirical analysis. International Journal of Physical Distribution & Logistics Management, 42(1), pp.60-82.

Kerzner, H.R., 2013. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Ruiz-Torres, A.J., Mahmoodi, F. and Zeng, A.Z., 2013. Supplier selection model with contingency planning for supplier failures. Computers & Industrial Engineering, 66(2), pp.374-382.