Risks and opportunities in supply chain management
Managing the supply chain means balancing a set of risks and opportunities that can significantly affect the result of the business.
The combination of the purchase prices of goods and services and production costs affects the formation of sales prices and the margins achievable on end customers
The qualitative and quantitative performances of suppliers affect the efficiency of production processes and, therefore, the company's ability to stay on the market
Concentration risk Dependence on one or more suppliers represents a strategic factor with respect to the company's ability to achieve its economic and market objectives
Substitution risk The need to replace one or more suppliers in a short time has an impact on production processes and time to market, as well as on short-term margins
Furthermore, some businesses may rely heavily on limited and/or localized skills and production capacities, with respect to which there are relationships of dependence.
The contribution of Supply Chain Finance to risk management
Supply chain financing is also a tool to reduce this type of risk, involving in a structural way actors extraneous to the production processes, but bearers of financial interests that can be summarized in the desire to use financial resources with attractive return prospects in the face of a low risk.
Polaris offers these individuals an operationally and legally structured environment, in which risk is clearly identified and easily measurable and the return is potentially more attractive than any other short-term opportunity.
By assuming a credit risk on the Buyer, the lenders give stability to the supply chain and, in this way, also reduce their credit risk towards the entity that is its apex.