Supply Chain Risks for Fresh Connection

This assignment delves into the various supply chain risks faced by Fresh Connection, a hypothetical company. It identifies and analyzes risks stemming from natural disasters, asset price fluctuations, panic buying, rising raw material costs, and increased labor expenses. The analysis highlights the potential impact of these risks on Fresh Connection's operations and emphasizes the need for effective strategies to mitigate them.

Running head: STRATEGIC SUPPLY CHAIN MANAGEMENT
Strategic Supply Chain Management
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Answer to Question 1......................................................................................................................1
Answer to Question 2......................................................................................................................3
References........................................................................................................................................6

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Answer to Question 1
In today’s business world, Strategic Management is considered as one of the major
concepts. Strategic Management refers to the process to plan, monitor, analyze and assess all the
necessary aspects that are required for achieving the organizational goals and objectives (Hitt,
Ireland & Hoskisson, 2012). Thus, strategic management plays an integral part in every aspect of
the businesses and there is not any exception in case of supply chain processes. The inclusion of
strategic management in various aspects of supply chain is likely to have positive effect on the
supply chain management of the companies. In this context, it needs to be mentioned that the
alignment of strategic management in the supply chain processes of ‘Fresh Connection’ has the
ability to strengthen the operations of the company. The supply chain in Fresh Connection has
different types of components and all of these components play integral part in the development
of the financial as well as non-financial performance of the companies. There is not any
exception of this fact in case of Fresh Connection. The following discussion shows the impact of
strategic management in various aspects of supply chain components in Fresh Connection:
The inclusion of strategic management in the supply chain of Fresh Connection has the
ability to improve the inventory policy of finished product of the company, as it is essential for
the company to have stable and efficient inventory policy of finished products. There are some
major factors having effects on the inventory level of Fresh Connection; they are customer
service expectations, uncertainty in demands and the flexibility of the whole supply chain
process (Christopher, 2016). In the presence of certain amount of demand, it becomes easier for
the companies in maintaining desirable customer service standards even in the reduction of
inventory level. However, in the presence of erratic demand and a short life cycle of the

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products, there is a need for more responsive and buffer inventories in order to meet the desired
customer service level. Thus, the inclusion of strategic management in the supply chain of the
company will ensure that the supply chain is responsive and there is a presence of large buffer
inventories. The next major item of supply chain in Fresh Connection is the forecasting of
demand (Seuring, 2013). There is an extreme need to insert strategic management in the
forecasting of demand in order to make the supply chain more effective. In addition, demand
forecasting helps the company to improve their financial as well as non-financial performance
also. With the assistance of demand forecasting, the company will be able to fulfill the demand
of their customers in a more effective way so that the highest customer satisfaction can be
achieved. Apart from thus, the approach of strategic management in demand forecasting will be
helpful for the company in the reduction of inventory. Thus, as per strategic management
approach, there needs to be a guaranteed availability of necessary products ort components in
order to meet the demand of the customers (Stadtler, 2015).
Moreover, it is essential for the company to keep the cost of stock in minimum level, as
this process is helpful in the reduction of wattage of products in the supply chain. For this reson,
the lot size needs to be dependent on the cost of total stock and the total cost of transportation at
the time of procurement. The next important area of supply chain is capacity planning and it is a
crucial stage in supply chain management. The presence of strategic management in supply chain
of Fresh Connection ensures that the company does their capacity planning in the most effective
way. There needs to be certain strategies for capacity planning (Tayur, Ganeshan & Magazine,
2012). In order to avoid overflow of capacity and outsourcing, it is required for the company to
optimize pallet allocation. After that, the allocation of adequate number of shifts will be helpful
for capacity planning. It is necessary for Fresh Connection to reduce the variability in the

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production process and to ensure that there is good storage capacity of finished goods. Most
importantly, the company needs to be ready to handle all demand of the customers. The next
important factor is value proposition in the process of supply chain. Value proposition refers to
the promise of value that is required to be delivered and belief from the customers that the value
will be experienced. The introduction of strategic management in supply chain helps in the
review and analysis of benefits, cost and value that the organization is able to deliver to their
customers. Thus, Value = Benefits – Cost. Different strategies of strategic management ensures
that Fresh Connection is able to deliver value to their customers with the help of quality products
and services (Monczka et al. 2015).
Answer to Question 2
Different types of risks can be seen in Fresh Connection and all these risks are high
associate with the supply chain of the company. Return on Investment (ROI) is supply chain
management is an important aspect. ROI is supply chain management refers to the return from
the investment made for the establishment of supply chain management. Risk related to supply
chain management ROI raises when Fresh Connection fails to fetch the desired return from
investment in supply chain management (Wisner, Tan & Leong, 2014). The next major risk is
contamination risk as high chance of contamination can be seen in the food industry. There needs
to be effective strategy to counter this risk. The next major supply chain risk is pandemic risk.
Pandemic risk refers to the risk rises from the spreading of infectious diseases. There are many
instances where the bacteria of diseases has spread in the foods and this risk has the ability to
disrupt the supply chain of Fresh Connection (McCloskey et al. 2014). There is no need to
mention that the whole production process of Fresh Connection runs with the help of power and
the loss of power can cause massive disruption in the supply chain of the company. For this

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reason, the risk of loss of power is considered as a major risk. Water management is considered
as a major part of supply chain management. One of the major component for making juice is
water and the loss of water can pose a great risk for the supply chain of Fresh Connection that
has the ability to disrupt the production process. It is required for the company to have enough
premises in order to carry on the production process of juice. Lack of premises or perfect
production place can disrupt the supply chain procedures of Fresh Connection and thus, strategic
management needs to consider this risk with utmost priority. The next major risk of supply chain
is the risk due to loss of IT. Large dependence of production process can be seen on various
technologies, these technologies are considered as keys to success of the supply chain of Fresh
Connection, and thus it is required to be provided with utmost attention (Brindley, 2017).
Another major risk is loss of logistics. Poor logistics technology along with management is the
major reasons for loss of logistics. In addition, change in supply and price can also be held
responsible for the logistics risk. Thus, strategies need to be developed for these risks.
The development of risks can be seen due to the presence of unexpected economic force.
Different types of unexpected economic forces can be seen like sudden increase or decrees in
demands, various environmental risks, social risks, business risks and many others. All these
aspects creates different types of risks for the supply chain of Fresh Connection. Another major
risk is the presence of various legislations. It needs to be mentioned that the food companies
need to comply with different types of safety legislations and laws. The business operations of
the companies get affected by complying with these food legislations and all these aspects
disrupt the supply chain. The risk of natural disasters is considered as another major risk for the
supply chain of Fresh Connection (Park, Hong & Roh, 2013). There are many instances all over
the world where the manufacturing companies got effected due to the attack of natural disasters

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like cyclones, drought, flood and others. All these aspects pose great threat for supply chain
operations of Fresh Connection. The next risk type of supply chain risk is the risk due to the fall
in asset prices. Due to the presence of various economic forces like inflation, certain collapses in
the prices of the assets can be seen that are very much harmful for the operations of supply chain
of Fresh Connection. Major risk in supply chain can be seen due to presence of panic buying.
Panic buying refers to the situation when people buy large quantities products due to the fear of
price rise in near future. Panic buying leads to sudden rise in demand that have the ability to
disrupt the ability of company supply chain (Sodhi & Tang 2012). There needs to be effective
strategy to fight this situation. The next risk is due to the increased cost of raw materials. The
increase in raw materials has the ability to disrupt the supply chain of Fresh Connection due to
the rise in the price of the products. Another major risk is the increase in the labor costs. Due to
the labor costs, Fresh Connection is needed to increase the price of their products and increase in
the prices of the products can lead to the decline in the demand of the products. Thus, from the
above discussion, it can be seen that Fresh Connection has different types of risks in their
business operations.

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References
Brindley, C. (Ed.). (2017). Supply chain risk. Taylor & Francis.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases:
competitiveness and globalization. Cengage Learning.
McCloskey, B., Dar, O., Zumla, A., & Heymann, D. L. (2014). Emerging infectious diseases and
pandemic potential: status quo and reducing risk of global spread. The Lancet infectious
diseases, 14(10), 1001-1010.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and
supply chain management. Cengage Learning.
Park, Y., Hong, P., & Roh, J. J. (2013). Supply chain lessons from the catastrophic natural
disaster in Japan. Business Horizons, 56(1), 75-85.
Seuring, S. (2013). A review of modeling approaches for sustainable supply chain
management. Decision support systems, 54(4), 1513-1520.
Sodhi, M. S., & Tang, C. S. (2012). Strategic approaches for mitigating supply chain
risks. Managing Supply Chain Risk, 95-108.
Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.

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Tayur, S., Ganeshan, R., & Magazine, M. (Eds.). (2012). Quantitative models for supply chain
management (Vol. 17). Springer Science & Business Media.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A
balanced approach. Cengage Learning.