Many companies have switched from “local” suppliers to “low cost” (and often distant) suppliers on the basis of cost, without considering the full cost of risks associated with these changes. As a result, the extended supply chain now has many additional points of potential failure, suggesting that new approaches to risk management can be beneficial. Many companies face increased exposures and potentially costly logistics lead times for critical products if unforeseen events emerge – as they seemingly will.

Notes not accessible who can assist me pliz

What are the risk?

Most of this companies face high cost of supplies..but accepting supplies from low cost companies

In my view the overall cost of procurement is to be considered rather than just the cost of supplies from the supplier.

Risk of accepting | demanding supplies from lost cost companies: GTAT (supplier for Apple that filed chapter 11 Oct 2014). Ref: Apple: Still a Penny Wise and Pound Foolish? http://talkinglogistics.com/2014/11/12/apple-still-penny-wise-pound-foolish/

Many companies have switched from “local” suppliers to “low cost” (and often distant) suppliers on the basis of cost, without considering the full cost of risks associated with these changes. As a result, the extended supply chain now has many additional points of potential failure, suggesting that new approaches to risk management can be beneficial. Many companies face increased exposures and potentially costly logistics lead times for critical products if unforeseen events emerge – as they seemingly will.

Most of this companies face high cost of supplies..but accepting supplies from low cost companies

What are the risk?