management plan, it may be a crucial time to consider a move away from the concept of single suppliers. One option to stimulate this development is providing incentives for supplier diversification in other parts of Japan, or setting up other branches of their company in other countries.
Today’s supply chains are truly global, and rarely self-contained. Regardless of where manufacturing takes place, manufacturers still need to source components from abroad, taking advantage of lower labour and material costs around the world. This complexity of supply chains also increases the cost of supply chains, generally in terms of logistics, however also reduces the risk of suppliers being co-located in one area
Exchange Rate Risk and Price Rate Risk Exchange rate risk refers to how changes in exchange rates can affect business operations or an investment’s value. This was particularly relevant during the recent global financial crisis, when the U.S. dollar greatly devaluated, also affecting the exchange rate of other countries’ currencies.