A Study On VC Company’s Supply Chain Risk Management Innovation (Improvement)

In the past decades, the economic globalization has achieved its fast development. The progress of technology advancement and industry upgrading has been accelerating. With the change of the global economic environment, the competition among practitioners has been constantly increased. The focus of competition between enterprises has been changed from quality, function and service to the capability of supply chain network emerged from interactive cooperation. The effective implementation of supply chain management will bring competitive advantage that can never be engendered within a single enterprise. Meanwhile, due to the inherent fragility of supply chain management mode, inevitable risk is raised to the participants.VC Company ("VC") is a domestic well-named old brand in foreign trade industry. VC provides supply chain services for a wide range of world-class brands and retailers. Consumers may rarely know its existence, but the truth is that VC has a tremendous coverage of the consumer goods market. In the past decades, VC has been a favorite company to the market, and due to its success in implementing its strategic thinking mode into the Asia Pacific market, VC has been quoted as a positive case study by various business schools. China has risen rapidly as a world factory. VC has achieved its golden 20 years’of fast development by grasping the advantage of the era. However, the advantage is fading with the advent of the new economic environment. The slowdown in development speed arouses people’s attention on the awkward and unsafe situation of this company, who used to be glorious and has created numerous acquisition cases.VC Company is a typical trading enterprise. The issues in supply chain management it encountered during its development are typical to the industry. These issues are reflected at following aspects:firstly, its supply chain management standards did not updated synchronously according to its clients’requirements. Secondary, repeated audits caused fatigue to its suppliers. Thirdly, Limited capacity cannot fulfill the increasing needs in monitoring the expanded supply chain network. The supply chain management system is out of function and potential risks are to be triggered at any moment. Fourthly, suppliers’competency in maintaining sustainability cannot be developed from repeated formalized assessments. The competitiveness of the supply chain is uneven and not sustainable. Fifthly, due to the lack of monitory from third party, integrity and ethical issues happen from time to time, which greatly jeopardized the reputation of the company.In order to solve these real problems in the course of development, a supply chain management mode evolution group was established and a series of corrective action were implemented. Based on the actual practice of VC Company implementing the supply chain management evolution, this thesis attempts to analysis the root cause, the preventative solution, ways to manage and control the potential risk in supply chain.The main body of this thesis is the evolution schemes implemented in VC Company’s evolution. These evolution schemes include follow aspects:1. Revised code of conduct & Standards to stay aligned with industry standards. The new requirements are accompanied by detailed standards and guidance and benchmarked against peers in the industry. It has simplified language and more explicit. The new rating and grading system reduce audit fatigue through longer approval periods. Besides, addition of numerical grading allows for better tracking of supplier progress over time.2. Audit Equivalency Program which enables saving time & money spent on duplicate audits and corrective action plan. The new program reduces audit duplication, overlapping Corrective Action Plans and turnaround time for factory approvals.3. Resort to third parties to assist risk management for non-core suppliers.4. Provide a series of capacity building program and trainings to suppliers to increase the competitiveness of supply chain. Through addressing the course of implementing the evolution schemes and the effects, the thesis strives to analyze typical problems raised in the development of a trading company, the root cause of the problems and practical solution to these problems. Based on the result of real practice, the thesis comes to a conclusion of providing some suggestions for trading companies of similar type in their course of continuous development.The thesis mainly utilizes methodology such as supply chain management theory, based on real problems encountered in actual practice, by integrating theoretical analysis and real case analysis, to analyze typical problems that can be encountered in its supply chain risk management during a trading company’s course of development.