STUDY OF THE SUPPLY CHAIN RISK MANAGEMENT IN COURIER INDUSTRY

Abstract

In a move to cut down costs, producers are exploring around the globe in search for the lowest cost exporters/suppliers. Lured towards developing countries in south-east Asian region for lower-wages, transportation industry is stretching its reach longer than ever before. Major players are focusing overseas markets for outsourcing cheap manufacturing as well as expanding their businesses. This results in outbound logistics. Couriers are basically a service for sending money or goods at some extra cost. It involves a person or a company engaged in transporting, dispatching and distributing letters, parcels and mails. In a rather layman term, it can be said that, compared to normal mail service, a courier possess many added features. More and more courier companies appear on a regular basis, and different courier logos and branding on vans and planes can be seen across the world. Many of these courier companies operate independently, whereas others rely on some of the larger courier companies when it comes to providing international deliveries. One of the main reasons for the increase in courier companies is the boom in global trade, probably largely down to the Internet. Couriers have to deal with all sorts of requests from delivering simple mail documents to large electronic items like computers, printers and televisions. Simply put, the courier market has grown due to demand from customers and businesses. The study therefore focuses on the various aspect of the supply chain management in courier industry which makes it efficient to any market variation. Supply chain risk management is gaining immense popularity due to globalization of competitive landscapes, and growing threats and uncertainty. Risk management in supply chains is directly linked with supply chain agility and hence it needs to be done in very organized and objective manner, incorporating quantitative models. Despite increasing awareness among practitioners, the concepts of supply chain vulnerability and its managerial counterpart supply chain risk management are still in their infancy. The existing literature on supply chain vulnerability and risk management is reviewed and compared with findings from case studies of courier industry to discover practitioners’ perceptions of supply chain risk. Special focus is on the corporate financing issues of current supply chain risk management strategies used in courier firms. The risk management practices are analysed by studying the literatures on Enterprise Risk Management (ERM), and then focus on how supply chain risk management domain can be mapped with it. The study finally concerns with Supply Chain Risk Management of 50 different courier companies. The report concludes with a summary of overall findings.