At first glance, it seems obvious that enterprises operating within a specific supply chain are absolutely forced to face risk. However, it must be remembered that so-called risk management, most often understood as taking specific actions aimed at reducing, dispersing, and utilizing risk, comes at a high price and therefore must be cost-effective. These actions are justified only when the risk directly threatens the realization of the main goals and tasks of the supply chain.
The foundation of creating a supply chain is the product. The virtual architecture of the supply chain connects suppliers and recipients in light of the product definition, its construction, and activities related to company management.
The main goal of the supply chain is to generate profits derived from “delivering the right good, in the right condition, time, and place” (customer service). Cultural differences present in supply chains, the heterogeneous level of technologies used, as well as the reluctance to share full information about the dangerous properties of products – in confrontation with the increasing degree of product complexity and process intricacy, as well as the pressure to achieve profits, have increased the risk associated with the occurrence of product defects. The reason for the loss of profits can therefore be misguided or unsold production and costs incurred in connection with an insufficient level of product safety. The issue takes on particular importance in a situation of rapid industrial development and technological progress, which is combined with new threats that almost always exceed previously defined boundaries. This results in the statement that every new product is burdened with a high risk of causing damage. Does the product liability regime have significant importance in the process of controlling the aforementioned risk? Does it actually contribute to taking actions that increase the safety level of products introduced to the market?
At first, it seems that the answer to these questions is affirmative. Including the issue of product liability in detailed analyses of problems related to risk in supply chains enables – at least theoretically – the shaping of the attitudes of decision-makers, obliging them to take ex ante actions in terms of shaping a high level of product safety. Particularly important for the discussed issue seems to be the preventive function of product liability, which is realized by protecting market participants from suffering damage in the future. The manufacturer, due to the strict liability regime, will try to eliminate the risk of danger inherent in the product. This entails an increase in care for product quality (multi-level production control), reliability in the way of informing recipients/users about the threats associated with improper use of the product, and also refrains from introducing products to the market that do not meet the safety requirements expected of them. By assumption, a safe product is intended to stimulate recipients to purchase it (which for the manufacturer means an increase in sales).
The article comes from the magazine “Logistyka” 6/2009.