TOPIC Risk management in Supply chain: A case study of Ford Australia  1. Literature Review 1.1 Risk Management According to Chin and Hummel (2013), Risk Management can be referred to the process of prioritizing, assessing as well as identifying risks followed by economical as well as coordinated application of resources for controlling, monitoring and minimizing the impact or probability of unfortunate events or for maximizing the opportunity realization. The objective of risk management is for ensuring that uncertainty does not deflect the endeavor from the goals of business. Manu, Espier and Stank (2014) have opined that, Risks can be encountered from several sources such as the threats from the failures of project, uncertainty in the financial markets, credit risk, legal liabilities, accidents, disasters and natural causes, events of unpredictable or uncertain root-cause as well as deliberate attack from an advisory. On the other hand, Ho et al., (2015) have stated that the events can be classified into two groups such as negative and positive events. Negative events can be classified as risks whereas positive events can be categorized as opportunities. Therefore, many standards for risk management have been implemented incorporating ISO standards, Actuarial societies, National Institute of Standards, and Technology. The strategies for managing threats encompasses the reduction of the negative effect or threat probability, threat avoidance, transferring part of threat to the other party as well as even connecting few of the actual or potential consequences of a specific threat (Manu, Espil & Stank, 2014). There is a continual requirement for companies to make investment of the substantial amount of resources into the manufacture and development of processes and products and the automotive manufacturing companies such as Ford are not the exception to this in today’s competitive environment. In this regard, Heckman, Comes and Nickel (2015) have stated that the lead time for developing and industrializing new vehicles by Ford Australia is remarkably decrementing in terms of achieving the competitiveness with the new models. Thus, this particular fact makes it harder for detecting possible errors in relation to the associated process and components and it also minimizes the reaction time (Pen & Chen, 2014). It is important to achieve success in the launch of new models for defining a process for detecting possible risks and for taking retaining actions on time. Apart from that, large vehicle manufactures like Ford expect of their suppliers for designing the different components as per the technical specifications (Monck et al., 2015). The design departments at the manufacturer can manage the design of vehicle components with the chosen suppliers together. 1.2 Supply Chain Risk Management Levanter, Gunshekar and Spaniel (2014) have defined SCRM or Supply Chain Risk Management as the strategic implementation of managing both exceptional and everyday risks associated with the supply chain related to the continuous process of risk management with the goal of ensuring continuity and vulnerability. On the other hand, according to the viewpoint of Truman, Oliveira and McCormack, (2016), Supply Chain Risk Management plays an important role to collaborate with partners within a supply chain and applies the tools of risk management process for dealing with uncertainties and risks caused by or impacting on the activities related to logistics or supply chain resources. Weingarten et al., (2016) have identifies four significant processes which are the key methods within Supply Chain Risk Management. These four processes are monitoring, controlling, assessment and identification of the risks of supply chain. On the other hand, Starter, (2015) has also stated the fact that Supply Chain Risk Management generally attempts for reducing the vulnerability of supply chain through a holistic and coordinated approach involving all the supply chain stakeholders that analyzes and identifies the risk of failure points within the supply chain. Risks to the supply chain can range from the natural and unpredictable threats for counterfeiting products and reaching across security, quality, product integrity and resiliency (Qing et al., 2014). Plans of addressing and managing these risks encompass risk management, finance, and cyber-security and logistics disciplines. More complicated supply chain can encounter the greater risk as well as supply chain operations of the automotive organizations such as Ford Australia (Manu, Espier & Stank, 2014). Therefore, the design technology of the supply chain can enable the automotive manufacturers for simulating, optimizing and modeling the supply chain network operations, inventory levels and transportation routes (Pang, Pang & Chen, 2014). Therefore, it leads to the major improvisations over the risk mitigation, substantiality, service and cost. Supply chain operations of Ford Australia Ford Australia is facing problems in their supply chain that force the auto manufacture industry to shut down their key manufacturing facilities within Australia. Wang et al., (2015) stated that automotive industry is mostly struggling of supply chain problems. Due to these problems, the organization is outsourcing their manufacturing business operations. In order to overcome with their supply chain risks, the organization relies on supplier as well as practices of just-in-time manufacturing. Rotor, Wilkin and Ceglowski (2014) demonstrated that the organization should develop of strategies for supply chain risk management such that those disasters should overcome. Ford should develop of two suppliers in various locations. Brandenburg et al., (2014) suggested that if the supplier is based within an area with forecasted weather conditions such as in monsoon season, they plan to hold of extra stocks at that time. Scholten, Sharkey Scott and Fiennes (2014) developed a supplier strategy, such that the supplier can step in if a key supplier is not capable to transport. A back up logistics plan should be developed such as alternative delivery methods are used in case of transportation issues. Kirilmaz and Erol (2017) argued that a management team should predict the disaster and then give proper solution to the problems. It will minimize the impact on the bottom line of the organization supply chain operations. 1.3 Risks in the supply chain of Ford Australia Bishop, Bell and Evans (2013) demonstrated that supply chain consists of various activities that can transform the natural resources, materials as well as components into finished product, which are delivered to the end customers. Leat and Revoredo-Giha (2013) argued that the supply chain operations of Ford Australia fail to deliver of their product in the business chain, and then their supply chain disrupts. The following are the supply chain risks: Inbound quality of product: The products and services, which are delivered by Ford Australia, are not of good quality that can attach the customer satisfaction levels (Howler & Halo, 2014). It will get impact in the market share of the organization. Delay in arrival of products: The suppliers of the organization are making delay into delivery of services to their clients. Therefore, the clients are not arrived their services on time. It results into damaging of business reputation as well as confidence of customers. Inaccurate shipment and delivery: The suppliers are not delivering the services on time that cause risk in their supply chain (Brandenburg et al., 2014). Due to natural disasters, there are issues in transportation mode as well as time of shipments. Internal processes: There is internal restriction on access of cargo and controls over use of electronic data are causing the supplier to get detailed information on supply chain operations (Scholten, Sharkey Scott & Fiennes, 2014). 1.4 Balancing Risk Reduction and Supply Chain Efficiency In a typical car, there are mostly three to five levels in the automotive supply chain as well as there are approximately 3500 parts in a typical car that could be comprised of numerous suppliers. Inbound supply chain with numerous parts and vendors in such an intricate, a major issue in any particular node of supply chain can cost millions of dollars in delays and damage (Heckmann, Comes & Nickel, 2015). Thus, it could incorporate strikes at one of the component plants, a part stock-out in the process of production, quality issues with a critical part and a single-sourced supplier shutdown. Therefore, in this regard, the automotive manufacturers such as Ford Australia utilize the modeling techniques for creating living models of their end-to-end supply chains (Levanter, Gunashekar & Spaniel 2014). They also have the capability of optimizing networks for remarkable cost minimization, but also for re-optimizing and redesigning while unplanned events or forecasted changes occur. The car manufacturers such as Ford Australia know that they have to predict their supply chains from costly and serious disruptions (Trkman, Oliveira & McCormack, 2016). However, the obvious remedies like addition of suppliers and capacity, enhancing inventory as well as shifting to the facilities of low-cost foreign manufacturing can enhance significantly the supply chain costs and risk.  1.5 Utilization Process of Supply Chain Visibility and Optimization Strategies In order to resolve the risks associated with the automotive business operations, vehicle manufacturing organizations like Ford should better use the optimization strategies as well as supply chain visibility over the multiple tiers of suppliers for gaining and maintaining control over the shifting timeline of demand (Wiengarten et al., 2016). In this regard, the automotive organizations like Ford should collaborate with the multiple ti1ers of the partners of supply chain at the time of the continuation of bust-and-boom cycle. The automotive organizations like Ford are adsorbing still the shockwaves that come typically with a bust-and-boom cycle (Qiang et al., 2014). The bullwhip effect that follows frequently a sharp downturn as well as its subsequent uptick brings often with it a time tag between fulfillment and orders. As numerous organizations including Ford knows the fact that uniformly ramping up the parts production over multiple tiers of suppliers, tracking supply chain events all over the world and planning adequate inventory levels can make key headache (Manuj, Esper & Stank, 2014). The major reasons behind this headache is simply because of the fact that automotive organizations like Ford dash to meet unpredictable demand surges as well as satisfy customers. The design cycle of the automotive organizations is long in relation to the other industries, even stretching over several years. Automotive industries are looking still at the scopes for responding faster customer needs and changing market through better performance for their extended value chain (Lavastre, Gunasekaran & Spaniel, 2014). The gradually rising complexity of their global demand and supply footprints needs supply chain analytics and the best practices of adopting leading-edge supply chain management. 1.6 Business Benefits of Automotive Industry Supply Chain Risk Management Supply Chain Risk Management can help the automotive organizations for protecting, monitoring and planning their supply chain against the adverse effects of potential disruptions as well as risks. SCRM can play a significant role in easily mapping the footprint of end-to-end supply chain down to the part level and raw materials (Trkman, Oliveira & McCormack, 2016). On the other hand, Supply Chain Risk Management also stores the supplier information and critical part in the information repository of a single supplier so that there is a single version of truth over the overall supply chain. Supply Chain Risk Management also monitors the international events 24x7 as well as operates a virtual war room for the response and central coordination to a natural disaster or supplier disruption that can result in the shortage of a part (Ch & Himpel, 2013). Supply Chain Risk Management can also identify proactively the components of high-business components and address associated supply risks by building mitigation ownership and metrics, risk thresholds recovery time and priorities for the risk minimization resources and budget. SCRM also plays a crucial role in achieving the end-to-end visibility of supply chain and optimizing the international partner network strategy. Supply Chain Risk Management has the potential for increasing the level of partner collaboration, engagement as well as data quality with the extensive supplier training and on-boarding services of the automotive organizations offered in several time zones and languages (Heckmann, Comes & Nickel, 2015). On the other hand, Supply Chain Risk Management is capable enough of improving supply chain agility and responding faster to customer demands and changing market.  1.7 Strategies to improve supply chain risks The six sigma initiatives helps Ford to move into a centralized network that results into reduce the inventory; improve over shipment and delivery process and savings over cost. Implementation of lean supply chain leads to overcome with the supply chain risks. Bishop, Bell and Evans (2013) stated that supply chain initiatives are consequence into reduction of number of miles logged by the trucks annually. It can cut the release of dangerous greenhouse gases. Therefore, Ford is continuing a strength supply chain. The automotive industry knows that they should require protecting their supply chain from costly disruptions. Kirilmaz and Erol (2017) demonstrated that due to lack of capability of supplier, increase in inventory as well as low cost foreign manufacturing facilities lead to rise of supply chain risks. With use of supply chain design technology, the products and services are delivered on time to the clients. As per market change opportunities, the organization should adopt their supply chain. New supply chain model should be adopted in Ford Australia so that they can respond to the market changes. It will enhance collaboration across their value chain (Rotaru, Wilkin & Ceglowski, 2014). With connecting of sales and operations planning, the supply chain should align with the business goals of the automotive industry. Ford Australia should comprise of sustainability as their core constituent for the supply chain strategy. It incorporates their key organizational requirements of supply chain. The organization enables carbon inefficiencies reduction, minimization of consumption of energy as well as movement of resources (Wang et al., 2015). The organization should kept improvement in their business audit, knowledge management. Both compliance audit as well as benchmarks are providing framework for their sustainable supply chain operations (Brandenburg et al., 2014). The suppliers as well as logistics partners should have physical security in order to check unauthorized access to the cargo shipments. Due to adoption of strategies for supply chain risks, it helps the organization to adopt of risks as well as disruptions of supply chain as competently. The supply chain initiatives are result into decrease of number of miles logged by the trucks annually (Holweg & Helo, 2014). It can cut liberate of dangerous greenhouse gases. Therefore, Ford is continuing a power supply chain. The automotive industry knows that they should need caring their supply chain from expensive disruptions. Through use of proper communication system, the risks are communicated with other members of the organization. After communicating with the management team, the organization should implement of risk strategies within the supply chain operations. Risk assessment is done to mitigate of those risks (Rotaru, Wilkin & Ceglowski, 2014). The findings of this study are that Ford should adopt new supply chain strategies so that they can reduce their delay in delivery time and reduction of inventory. The main objective of their supply chain risk management is to automate their business processes so that they can collect information of the suppliers. It includes of supplier performance into financial issues (Bishop, Bell & Evans, 2013). Use of proper technology should automate their supply chain business operations. 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