Supply chain of the automobile industry: Internal control issues, operations, and sustainability of cars exported overseas
This paper explores the internal control issues, operations and sustainability in the supply chain of automobile industry when exporting their cars overseas. Particularly this paper emphasized the possible reasons of internal control issues and implications that cause the increase in insurance cl...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Akademia Baru
2017
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/57256/ http://irep.iium.edu.my/57256/ http://irep.iium.edu.my/57256/1/ARBMSV7_N2_P42_54.pdf |
| Summary: | This paper explores the internal control issues, operations and sustainability in the
supply chain of automobile industry when exporting their cars overseas. Particularly
this paper emphasized the possible reasons of internal control issues and implications
that cause the increase in insurance claims on Damage in Transit (DIT) and/or Missing
and Discrepancy (MAD) on car exporters. Goods and items exported overseas face the
risks of DIT and/or MAD that are affected by any number of causes and exposures such
as natural disaster, deficiencies, criminal activity and so forth. The increase in DIT
and/or MAD insurance claims has a direct impact on the company’s operating costs
that requires a higher premium to be paid to the insurance company, hence reduce
the revenue. The internal control weaknesses in handling the exported goods also can
become one of the major reasons to DIT and/or MAD that related to criminal activities.
This paper reviewed the past literatures relating to damages, missing or discrepancy
happened during the process of exporting cars and the concept of internal control and
some examples of the cases of companies that put it into practice. This study is
expected to provide notion to the automotive industry that exporting cars overseas to
evaluate their existing procedures in place and make improvisation to deliver better
quality services and products to their customers and to improve the current working
process in related departments if such weaknesses induced to DIT and/or MAD exists.
In addition, this study also aims to improve communication between divisions to
ensure and to prevent the occurrence of the same issues in the future. Finally, this
study proposed the execution of COSO internal control framework and a better cost
management exercise may be practiced to alleviate DIT and/or MAD. |
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