Purchasing Risk Management Study Of T Company

With the development of global economic, globalization become the mainstream for companies worldwide. Enterprises started their investment abroad. They enter the foreign market in the form of joint venture or independent investment. These foreign subsidiaries positioned in the foreign market have taken the advantage of market, price and national policy to serve the home country and internationally. The development of multinational companies surely has brought the supply chain to the international market. The physical distance between manufactures, suppliers, distributors, end customers are stretched to the corners of the globe. But customers are not to be impacted because of any change in the supply chain. Thus multinational companies are facing more challenges to maintain the original service level like product quality and lead-time.How can a company survive in the fierce competition is a question that concerns the management team. When technology advances, customers tend to purchase customized product to their applications. These customized products are more challenge in design, more parties are involved in the supply chain, and more complicated manufacture process is needed. All the above requirements have brought more challenges to the supply chain. The more participants involved, the more uncertainty there will be. These uncertainties are what we call Supply Chain Risk. To better serve the customer, companies have to manage their supply chain risk more professionally. As the only way to acquire material, purchasing plays an important role in the entire supply chain. Thus purchasing risk management is crucially important to the supply chain. Chinese companies just started their management of supply chain, never to say supply chain risk management. So domestic companies have to spend more time and resources in developing their supply chain management and risk management, improve their risk management system, and monitor these risks in the daily operations, apply appropriate risk control measures to minimize consequences, then they can survive in the risk situation.This essay focus on T Company, applied theories from Operations management, supply chain management and risk management, viewed from the industry and market sector of which T Company belongs to, deeply understood the purchasing procedure, combined with the existing supplier performance data, wish to define the main risks that impacts T company purchasing performances. These risks include: Supplier product quality risk, lead-time risk, forecast risk, customer assigned supplier risk, lean purchasing risk, inventory risk, sole supplier risk, financial risk, personal risk etc. This essay provides solutions fit T Company’s development from risk management prospective. These solutions include establishing a dynamic purchasing risk management system, as well as exact solutions to the above risks.Since current researches on purchasing risk to a specific industry is very few, this essay hopes to provide some reference to the bearing manufacturing industry purchasing risk managers, and inspire those who are experiencing purchasing risks by the case study on T Company.