“Supply risk is defined as the probability of an incident associated with inbound supply from individual supplier failures or the supply market occurring, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety”.
Supplier Relationship Management (SRM) is a term that has moved out of the realms of procurement and has taken its place firmly within the supply chain lexicon. The concept of SRM evolved in the eighties as a term referring to a more proactive relationship between organisational buyers and suppliers where buyers understand and document the risks and impact of each supplier in terms of profit and business continuity.
Despite recent improvements, the sluggish South African economy continues to concern local organisations. Added to this a plethora of disruptive inventions and organisations are challenging nearly every industry’s traditional business models. Companies are constantly looking over their shoulders for the next Tesla, Uber, Netflix, Google, or Airbnb - living in fear of becoming the next case study about a long forgotten business that neglected the digital transformation imperative.
E-commerce is no longer a future trend – it is a retail segment threatening to overtake bricks-and-mortar in even the most traditional economies. This business model has arguably had the single most significant impact on how modern supply chains operate, and with ever-evolving consumer demand – is likely to do so for years to come.
We asked our supply chain experts to unpack the concepts of drop shipping vs. 3rd party fulfilment centres as viable supply chain options for e-commerce businesses.
As industries become more and more commoditised, there is a growing understanding that value is not necessarily intrinsic to the product sold, but in the manner in which this product is brought to market. Such commoditisation has resulted in organisations seeking opportunities to create competitive advantage through various partnerships, be it through outsourcing non-core functions to niche support organisations, or manufacturing bases in geographies that offer low costs per item produced. Globalisation has indeed created a one-world market and increasing digitisation is building an economy where the location of services is no longer as relevant as the value such create.