The Threat to the Supply Network of Anbessa Shoe Share Company - Managing the Risk’

Topics: Risk management, Supply chain management, Management Pages: 22 (5092 words) Published: November 2, 2011
Table of content

Executive Summery1
1.Background of the Study2
1.1 Supply network in Leather Industry2
1.1.1 Ethiopian leather industry Strength and Constraints2 2.Literature Review3
2.1 Supply chain Management3
2.2 Supply Network4
2.3 Supply Chain Risk Management (SCRM)6
2.4 Supply Chain Risk Source7
2.5 Supply Chain Risk Consequences9
2.6 Supply Chain Risk Drivers9
2.7 Mitigating Risks for the Supply Chain11
3.Case study : Threat to the supply network of ANBESSA Shoe Share Company – Managing the risk13 3.1 Company Profile13
3.2 Supply network in ANBASSA Shoe Share Company14
4.Supply Chain Risk Management in ANBASSA16
4.1 Potential Risk in Supply Network in the Company16
4.2 Short-term Risks to the Supply Network16
4.3 Global Risks to the Supply Network17
5.Risk management practice in ANBESSA Shoe Share Company18 5.1 Triple Bottom Lines Analysis19

Executive Summery
The trend for expanding production capacity to deliver service and product to the right customer, in the right quantities, at the right place on the right time had forced companies to enter to the global market and create international supply network.

During the transformation of local production to global leads to different kind of uncertainties and supply network risks; a supply chain become more and more complex as a consequence of global sourcing, the risk related to the supply network will increase.

The purpose of this paper is to discuss how Ethiopian leather industry in particular ANBESSA Shoe Share Company is affected by the risk in the supply network in the industry as a result of global market.

Now a days, It is the responsibility the managers to be aware of internal and external supply network risks which directly or indirectly affects company’s production. In order to work on the possibilities of decreasing the network supply chain risk, one has to identify the source of risks, the drivers, the consequence and execute strategic plan for mitigation of the supply network risk.

In the study, the threat to the supply network of ANBESSA Shoe Share Company has been discussed including the strategic plan for managing the risks.

1. Background of the Study

The study has focused to identify the risks involved in supply chain existing industry based on its interaction in the local market and global sourcing. Global sourcing makes supply network more complex and this leads for the emergence of supply network risk.

As a matter of fact, no industry can work as isolated without having relation to other industries or factories within the industry it is governed to be successful and achieve its organizational goal.

1.1 Supply network in Leather Industry
1.1.1 Ethiopian leather industry Strength and Constraints
Ethiopian sheep are known for its high natural quality of skins that satisfies international parameters such as good substance, high cut ability and good feeling. Ethiopian Hair Sheep Skins originating from the highland are appreciated by the international leather industry because of their high strength at lower thickness and flexibility which makes them very suitable for gloving, garment leather and shoe upper. Goat skins from Ethiopia are demanded on the international markets by producers of suede garment and shoes because of their compact fiber structure.

The Ethiopian leather industry is affected by a series of constraints. These include a growing rate of deterioration of leather quality observed by the tanneries during the last years. They are accompanied by factors that limit the quantitative production potential, such as low off take rates, low recovery rates of hides and skins from farm to factory, insufficient slaughter facilities, inadequate market structure, illegal animal exports, hoarding and speculation by hide and skin traders (ECBP, 2008)

One of the main problems affecting the leather and...
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