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In 3 paragraphs
inventory is one of the most expensive assets an organization has. This asset must be managed properly throughout the supply chain. Use the Internet to research an organization that has experienced a major disruption in the last 10 years and address the following:
•Specifically describe the disruption.
•Discuss the impact the disruption had on the organization and its inventory (financial, reputational, etc.).
•Describe steps the organization took to overcome disruption’s impact.
•Discuss steps/process organization implemented to minimize future disruptions
Expert Answer
There is great effect on company performance when there is disruption in the inventory. When there is a shortage of inventory it affects the organizations and creates difficulty in fulfilling the orders. This may lead to loss of goodwill of organization and financial loss. The disruption in inventory occurs mainly when there is reliance on single supplier. Immature risk management in the field of inventory also leads to disruption. The inventory is utilized without proper planning to increase profit and reduce cost. Understanding the risk behind supply chain will help to overcome disruption. The organization should be flexible towards the supply chain needs and it is better to have a low cost offshore supplier and a high cost local distributor to overcome the risk that may arise due to inventory disruptions. Natural disasters also lead to shut down of plants and inventory disruption.
Let us check the inventory disruptions faced by Apple on its wrist watch supply. The watch’s tap tic engine was defective in models produced by AAC technologies in China. The problem was reported by the media and the tap tic engine is the key component for reproducing the sensation of being tapped in the wrist. This affected the production and availability of watch. There was shortage of wrist watches but Apple was able to launch the product on time because Apple has arranged another supplier Nidec Corp of Japan for tactic engine. They supplied this key part without any problems and it helped Apple in overcoming the disruption that might have happened through single supplier.
Apple could offer the product without affecting the goodwill of the company and much financial loss to its customers though there was a delay in supply. It is always better to have multiple suppliers to overcome the disruptions. The supply chain relationship in Apple is very strong and they manage it well by involving the suppliers in new product development, proper communication with suppliers and proper evaluation of the supplier performance. This helps Apple to overcome the disruptions that may cause due to supplier problems. The flexibility of supply chain management helps Apple to develop resilience by understanding the vulnerabilities and help in meeting the supply needs.
