DISSERTATION2
TITLE: AN ANALYSIS OF RISK-BASED SUPPLY CHAIN MANAGEMENT IN THE PROCUREMENT PROCESS IN CHINA’S CONSUMER ELECTRONICS INDUSTRY
INTRODUCTION
The procurement process is the starting point for all business activities of an enterprise, and attention to this process could help the efficiency of the company’s overall business activities. Unlike the early years’ production, the supply chain has become more complicated in modern production due to shortened product life cycles and increasing demand (Tang and Musa, 2011). Over the past two decades, with China’s continuous growth, the Chinese consumer electronics industry has flourished (Tilley and Williams, 1997), especially in Guangdong province, where Huawei’s headquarters is located. Procurement risk based on the supply chain could be the main problem that many companies currently face. Many companies introduced the concept of lean production as a strategy of eliminating “waste” from the supply chain by reducing the number of suppliers. Whereas this helps simplify the operation, if unexpected events occur in the supply chain, it will also cause problems. Supply chain disruptions can significantly reduce operational performance, profitability, and shareholder value in the long term [Hendrics. Singha .2003].
The Coronavirus disease (COVID-19) that broke out in 2020 has caused inconvenience to many aspects of people’s lives, and it has a significant impact on the consumer electronics industry. As governments and health care agencies work to combat the spread of COVID-19 and treat those affected, manufacturers are struggling to manage the epidemics growing impact on their supply chain. One of the significant responses to the epidemic was a global lockdown, and even within countries, there was the restriction of movement. It greatly affected cargo and people’s movement, and in effect, reducing the workforce available to manufacture products either due to illness, attrition, or access to the factories.
This paper will discuss the risks of procurement in the supply chain from consumer electronics enterprises’ perspective targeting Chinese consumer electronics companies.
LITERATURE REVIEW
According to Juttner [Juttner 2005], risk-mitigating strategies in Supply Chain have to be investigated in conjunction with the risk drivers. Supply managers expect that their vulnerability to supply disruptions will only increase in the coming years. Supply chains are exposed to domestic and international risks such as; increasing uncertainty between supply and demand, shortened product and technology life cycles, consumer demand changes, and damages caused by nature and unexpected events. Disaster impact is felt across all sectors of the supply chain. Managers need to conduct a supply risk disruption research [SDR] access and understand how this impacts their business performance and formulate effective risk mitigation measures.
RESEARCH METHODOLOGY
For this study, we will employ both qualitative and quantitative research methods.
Qualitative will be in the form of emails and structural questionnaires for the managerial and tech staff of the consumer electronic industries in China. Qualitative research aims to provide value in answers, and it will target those employees who deal with procurement and have first-hand information on their procurements strategies. The impacts the global pandemic has had on their systems.
The online survey will target Chinese consumer electronics employees to rate the probability and consequences of the risks that exist in the procurement process of the consumer electronics industry.
The quantitative methodology will use company reports and published articles related to the supply chain and supply chain risks and mitigation strategies. There many published articles, books, and journals that address SCRM, and this article will focus on those that relate to the consumer electronics industry in China. An analysis will comment on the challenges facing the SCM procurement process in consumer electronics in China and the mitigation measures that can be adopted to counter their negative effects.