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Risks
1. Reduced Control of Operations: Outsourcing operations can sometimes lead to reduced control or visibility over the supply chain operations and could potentially limit Fortune Brands Home Security’s ability to track orders and ensure compliance with industry safety and security regulations.
2. Increased Costs of Operations: Outsourcing operations could also lead to an increase in the overall cost of operations due to additional fees and expenses associated with managing multiple vendors.
3. Loss of Flexibility and Scalability: A supply chain model may not provide adequate flexibility and scalability to adjust to sudden changes in customer demand or market conditions.
4. Disruption in Supply Chain Execution: A sudden disruption in the supply chain operations, such as a disruption in supply or a disruption in demand, could lead to major delays in getting products to customers.
5. Risk of Vendor Failure: Outsourced vendors could fail to meet timelines or other contractual terms leading to major delays in product deliveries, leading to customer dissatisfaction and even litigation.