Operational risks
Supply chain risks include:
- the risk of disruption of supply continuity that may occur in the event of unavailability or delays in the delivery of raw materials or packaging as a result of: natural disasters in areas where production raw materials are extracted, geopolitical changes or organizational problems at suppliers.
The occurrence of a risk of disruption of supply continuity may lead to delays in the production and delivery of Śnieżka Group products. In addition, if this risk occurs, the Group will be forced to bear additional costs related to the search for substitutes for raw materials and their purchase at higher prices.
The Group limits the risk of interruption or disruption of supply chains by maintaining appropriate levels of inventory within the organisation and by geographically diversifying suppliers of key raw materials. Additionally, it concludes agreements with at least two suppliers for each of the key raw materials and packaging, and identifies and uses appropriate quality substitutes for production.
- the risk of disruption of production processes, which may occur in the event of microbiological contamination of production lines, failure of systems or production equipment.
As a result of the risk of disruption of production processes, the production line may be temporarily shut down, and consequently, production capacity may be limited, the production plan may not be executed and sales may be lost. Furthermore, microbiological contamination or interruption of production processes may result in the production of poor quality products. The sale of defective products may give rise to loss of reputation and the need to incur the costs of withdrawing defective goods from the market.
In order to prevent this risk, the Group conducts systematic testing of the microbiological purity of production lines and raw materials, periodic disinfection, inspections, maintenance and regular repairs, and updates of production systems and equipment.
A significant risk factor that may directly affect the implementation of processes and the possibility of implementing the strategy adopted by the Group is the risk in the employee area, relating to both the loss of and difficulties in recruiting staff with high qualifications, competences and experience, as well as those in line with the values, goals and culture of the organisation. Due to the fact that staff with appropriate, specialist or practical knowledge in specific business areas is crucial to building and maintaining competitive advantages, the Group monitors on a regular basis the reasons for departures and the level of turnover. In addition, it ensures the competitiveness of remuneration and benefits, monitors recruitment, employment and onboarding processes in order to evaluate and optimize them, and supports employee development by organizing training courses that help improve their competences and adapt their skills to business needs.