Upstream activities – Supply chain disruptions

(SMA Module 6)

Reasons for supply chain disruptions

The supplier is unable

Supplier issues to deliver due to
issues like insolvency

Problems with the

Logistics issues transportation of
goods
Reasons for
disruptions
Earthquakes, floods,
Natural disasters
tsunamis

Political sanctions,
Gographical events
trade restrictions

Implications of supply chain disruptions

Greater risk of
disruption = greater
inventory buffer
Inventory Source at greater cost

Insufficent stock
Implications of supply
disruptions
Stop production
Dealing with bad
Strategic and
supplier would reflect
reputational risk
poorly on the entity

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