Skip to content

ACCA Strategic Professional · Strategic Business Leader · E-business: value chain

Taliesin Motors adopted an e-procurement platform linking it to 40 component suppliers. Six months later, the platform shows that two key suppliers hold unique tooling, and Taliesin has stopped using alternative suppliers because the platform makes ordering from them simple. Which risk of e-SCM does this most clearly illustrate?

This illustrates over-dependence on a few tightly integrated partners. By dropping alternative suppliers and relying on two with unique tooling, Taliesin has made its supply chain vulnerable to their failure or price increases, a recognised risk of close electronic supply chain integration.

  1. AOver-dependence on a few integrated partners, creating supply chain vulnerabilityCorrect
  2. BLoss of data confidentiality through a cyber attack
  3. CExcess capacity in the logistics network
  4. DFailure to achieve economies of scale in purchasing

Explanation

Close integration and the abandonment of alternative suppliers concentrates reliance on two partners with unique tooling, so a failure or price rise at either would disrupt Taliesin. No data breach, excess capacity or scale issue is described.

Did you get it right without looking?

One question tells you little. A timed set on E-business: value chain shows your real accuracy, how long you take and where you lose marks.

Practise E-business: value chainFree diagnostic mock

More E-business: value chain questions