Just as supply management professionals must interact with o

Just as supply management professionals must interact with organizations within the company, they must also monitor organizations outside the company such as suppliers and customers. What actions can a firm take to minimize the impact of shortages by monitoring changes in the external supply environment?

Solution

Minimizing shortages eminating from external supply environment is very important.

The steps or actions that can be taken are:

a. clealry give demand projections on a weekly or monthly basis beforehand to the suppliers and vendors. This will give them a fair picture of the amount spare parts or raw materials that they have to supply in the coming periods. This action will help reduce shortages from the vendor\'s side.

b. select an efficient and able logistics partner so that there is no delay in receiving materials, which may cause shortages.

c. constantly monitor supplier\'s exposure to threats like political threat, environmental changes or impacts will also help the supplier and in turn the organization to reduce the chances of shortages in cases of political strike, etc.