How do exchanges manage liquidations?

As a keen observer of the cryptocurrency market, I'm particularly interested in understanding the intricacies of exchange liquidations. Could you elaborate on the processes exchanges follow when managing liquidations? Specifically, how do they determine when a position is undercollateralized and thus requires liquidation? What steps do they take to ensure fair and transparent liquidation procedures? Additionally, are there any safeguards or measures implemented to mitigate the potential impact of liquidations on the market? Understanding these mechanisms is crucial for traders and investors to make informed decisions within this volatile yet exciting industry.