5 Ways to Mitigate Supply Chain Risk in this Economy

From RoshanThomas: ” Nortel Networks Corp, once a telecommunications equipment giant, after years of being under tremendous pressures and trying numerous reorganization and cost-cutting actions to improve its competitive position, filed for bankruptcy protection from creditors on Jan 14th 2009. The Wall Street Journal reported that the company was expected to pay creditors $107 million in bond interest that week and owed bondholders more than $3.8 billion.”

“Now why is this an important incident? The implosion of huge telecom companies like Nortel has widespread negative repercussions not only for their customers, partners and suppliers but also for competitors to an extent. For example, most of the telecommunications equipment manufacturers have outsourced their manufacturing to their contract manufacturing partners like Flextronics, Sanmina-SCI Corp., Jabil Circuits to name few. Although these contract manufacturers are huge players by themselves, an accounts receivable situation and inventory exposure in millions of dollars due to bankruptcy of a major customer could break their back. This will lead to disruption of supply chain for their other customers as well.” 5 Ways to Mitigate Supply Chain Risk in this Economy

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