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Supply Chain Risks: A Review and Typology
Abstract
Purpose – The purpose of this paper is to review the growing literature examining supply chain risk management (SCRM) and to develop a typology of risks in the supply chain. Design/methodology/approach – The paper draws its insights and conclusions from a review of the literature on supply chain risk, and a synthesis of the broader domain of risk management. Findings – While the literature on SCRM is growing, the literature lacks an organized structure for the sources of supply chain risk. The current paper bridges this gap by synthesizing the diverse literature into a typology of risk sources, consisting of environmental factors, industry factors, organizational factors, problem-specific factors, and decision-maker related factors. Practical implications – The paper devises a typology that can be used by managers to measure and assess the vulnerabilities of their company and supply chain. The typology also provides avenues for future research that further guides practitioners in the management of their supply chain risk portfolio. Originality/value – SCRM is rapidly developing into a favored research area for academicians as well as practitioners, especially after the attacks of September 11 and the recent array of natural disasters. This paper develops a methodology for structuring academic inquiry in this important research area.
... One of the most common classification attempts in SCRM literature is to divide risk into three classifications. The first classification involves the internal risks of the focal company (Christopher & Peck, 2004;Rao & Goldsby, 2009), which are called organizational and operational risks (Ho et al., 2015). The second classification involves risks within the supply chain, but outside the company which can be considered demand and supply risks (Christopher & Peck, 2004;Rao & Goldsby, 2009). ...
... The first classification involves the internal risks of the focal company (Christopher & Peck, 2004;Rao & Goldsby, 2009), which are called organizational and operational risks (Ho et al., 2015). The second classification involves risks within the supply chain, but outside the company which can be considered demand and supply risks (Christopher & Peck, 2004;Rao & Goldsby, 2009). The authors Christopher and Peck (2004) add the third classification of risk outside the supply chain, which is usually outside the company's control and called environmental risk (Jüttner, 2005;Rao & Goldsby, 2009). ...
... The second classification involves risks within the supply chain, but outside the company which can be considered demand and supply risks (Christopher & Peck, 2004;Rao & Goldsby, 2009). The authors Christopher and Peck (2004) add the third classification of risk outside the supply chain, which is usually outside the company's control and called environmental risk (Jüttner, 2005;Rao & Goldsby, 2009). According to this small passage about patterns and classifications related to supply chain risk and based on another comprehensive review of literature, we position ourselves for this study in five categories, these include: supply risks, demand risks, process risks, environmental risks, and financial risks, detailed in Table 1. ...
After examining the theoretical aspects of corruption, it can be said that corruption is the abuse of authority (office) for personal gain and includes bribery, embezzlement, favoritism, etc. Corruption can also undermine income distribution and lead to neglect of environmental protection in the Green Deal. Decreasing resources due to corrupt actions can
have negative consequences for social protection and public services, as it reduces the available budget and disrupts equal access to public services, as well as creating negative
conditions for ensuring sustainability and protecting the environment. The purpose of the article is to analyse various concepts of corruption and present its impact on economy and national budget’s revenue. Methods used in the research: analysis of legal acts, scientific comparative analysis of literature.
... Price fluctuations in the supply markets (Zsidisin, 2003;Cucchiella and Gastaldi, 2006;Melnyk et al., 2009), supplier quality problems ( (Zsidisin, 2003;Cucchiella and Gastaldi, 2006;Tummala and Schoenherr, 2011;Mangla et al., 2015b;Rostamzadeh et al., 2018) among others), capacity fluctuations or shortages of the suppliers, poor logistics performance of suppliers/logistic service providers, and supplier capability ( (Johnson, 2001;Tummala and Schoenherr, 2011;Rostamzadeh et al., 2018;Abdel-Basset and Mohamed, 2020;Aman et al., 2022) among others) are some of the risks that can originate from upstream of the SC and restrict the ability to obtain adequate quantities and qualities of inputs (Miller, 1992). On the other hand, risks related to the downstream are the ones that can occur due to volatile or unanticipated customer demand (Knemeyer et al., 2009;Rao and Goldsby, 2009;Zhao et al., 2013;Rostamzadeh et al., 2018;Aman et al., 2022), insufficient or distorted order information, bad payment behavior, or payment defaults of customers (Chopra and Sodhi, 2004;Sodhi and Lee, 2007), and so on, which can change the demand for an industry's products unexpectedly. The last category of risks within the SC level is competitive risks. ...
... As a result of these risks, established patterns of competition and coordination among firms may shift (Miller, 1992), and a firm's ability to differentiate its products and services may be affected. This category consists of risks such as competitor actions and changes in the behavior of competitors (Cucchiella and Gastaldi, 2006;Blome et al., 2009;Ghoshal, 1987), competitive uncertainty (Rao and Goldsby, 2009), and the introduction of new competitors (Abdel-Basset and Mohamed, 2020). ...
... Finally, taking the PEST analysis as a basis, which is the most commonly used framework for the identification and clustering of external factors, risks outside the SC can originate from macro environmental forces (i.e., Political, Economic, Societal, and Technological forces). Examples of these risks include regulatory and legal risks arising from environmental legislation, quota restrictions, etc. ( (Oke and Gopalakrishnan, 2009;Tummala and Schoenherr, 2011;Abdel-Basset and Mohamed, 2020;Shenoi et al., 2021;Aman et al., 2022) among others), risks arising from political instability ( (Kleindorfer and Saad, 2005;Cucchiella and Gastaldi, 2006;Tang and Tomlin, 2008;Rao and Goldsby, 2009;Rostamzadeh et al., 2018) among others), security risks (war, terrorism, theft, etc.), natural disasters (earthquake, flooding, drought, etc.), foreign exchange risks ( (Kleindorfer and Saad, 2005;Knemeyer et al., 2009;Trkman and McCormack, 2009;Mangla et al., 2015b;Rostamzadeh et al., 2018) among others), and so on. All of these external or environmental risks can severely disrupt the SC and affect all parties. ...
... Unethical and socially irresponsible acts by manufacturers and their supply chain members have been major global concerns (Deshpande and Swaminathan 2020;Benstead, Hendry, and Stevenson 2020;Govindan et al. 2020;Schleper, Blome, and Wuttke 2017;Blome, Foerstl, and Schleper 2017;Lange and Washburn 2012;Cremer et al. 2011;Hill et al. 2009;Roth et al. 2008) with significantly damaging effects on corporate value (Verschoor 1999;Carroll and Shabana 2010). Companies can be adversely affected by the unethical practices committed by other companies in their supply chains (Gammelgaard et al. 2020;Rottig, Koufteros, and Umphress 2011;Oehmen et al. 2010;Roth et al. 2008;Rao and Goldsby 2009). Many manufacturers thus adopt an ethical code of conduct ('code') to disseminate knowledge and responsible business practices to their employees, and incorporate ethics to develop sustainable supply chain management (Cole and Aitken 2019;Oehmen et al. 2010;Singh 2011;Erwin 2011;Stevens 2008). ...
... However, the current literature mainly focuses on operational risks in supply chains (e.g. Tazelaar and Snijders 2012;Rao and Goldsby 2009). Based on the agency theory, Zsidisin and Ellram (2003) suggested that supply risks can be managed by behaviour-based techniques that address the suppliers' processes rather than outcomes. ...
... In the present competitive economy with multiple newest challenges, enhanced comprehension of uncertainty and risk management is still a significant issue [26] due to tremendous supply and demand instability, globalization of markets, and shorter product and technology lifespan cycles. In addition, the growing use of outsourced production, distribution, and logistics creates intricate linkages in the global supply chain, boosting risk exposure [27]. ...
... Moreover, most of these papers-save for two-only evaluated a tiny number of publications. Given the focus area of interest, [44] evaluated 31 publications, [27] examined 55 papers, and [45] investigated 55 articles. However, the SCRM field is expanding so quickly that 658 articles have been released since 2020 (Fig. 1). ...
... Are contractual relations and collaborative contracts preferred in ensuring that orders are delivered as expected? The government's ability to respond to a crisis depends on its ability to acquire critical supplies for addressing immediate humanitarian needs and achieving a path to "normality" (Day 2014;Rao and Goldsby 2009;Sheu 2010). Purchasing critical supplies in the early stages of a crisis is fraught with risks; however, as there are greater challenges in identifying reliable contractors and in ensuring that contractors deliver orders as expected (Chakravarty 2011;Fahimnia et al. 2017;Papadopoulos et al. 2017). ...
... Preliminary analysis of a contractor's supply origins could indicate if they relied on a region where such exports were known to be banned, or where other manufacturing problems were known to exist. The focus on geographical diversity can reveal vulnerabilities such as "diamond-shaped supply chains" that involve many tier one or tier two suppliers but only a single source of upstream production (Ang, Iancu, and Swinney 2017;Rao and Goldsby 2009;Wu and Choi 2005), or "nexus" suppliers who can shape the overall flow of information or goods (Yan et al. 2015). Such approaches increase the "visibility" of supply chain partners beyond the immediate prime contractor or distributor (Bode et al. 2023;Shivajee, Singh, and Rastogi 2023;Yan et al. 2015), and could accompany typical measures of contractor reliability maintained in government contractor databases (GAO 2022). ...
While prior research has long identified the centrality of critical supply acquisition to the government’s response to a crisis, there is less understanding of how to secure critical supplies that depend on global supply chains. The acquisition of personal protective equipment (PPE) in the immediate aftermath of the coronavirus disease 2019 outbreak (COVID-19) proved challenging not only due to threats of contractor deception but also due to disruptions in contractor supply chains. This research analyzes primary interview data with contracting officials involved in purchasing PPE in the early stages of the COVID-19 crisis. The results indicate the ways that contractor relationships were perceived useful in anticipating risks surrounding a contractor’s behavior (behavioral uncertainties), but insufficient in anticipating disruptions that can result from a contractor’s supply chains (environmental uncertainties). Contractor relations were perceived to help in predicting industry disruptions, but such relations were likely to be formed alongside transactional and short-term contract designs—and likely to require comparison with other data sources. The results indicate that improving the reliability of critical supply acquisition for future crises is likely to depend on developing expertise in supply chain analysis, especially as the U.S. government increasingly relies on global supply chains in critical supply acquisition.
... According to Kamalahmadi and Parast [48], researchers are actively investigating ways to incorporate environmental, social, and economic sustainability into supply chain operations. The goal is to effectively address a range of sustainability challenges while simultaneously enhancing the resilience of the supply chain [10,22,[49][50][51][52][53][54][55][56][57][58][59][60][61]. ...
As globalization deepens, factors such as the COVID-19 pandemic and geopolitical tensions have intricately complexified supply chain risks, underscoring the escalating significance of adept risk management. This study elucidates the evolution, pivotal research foci, and emergent trends in supply chain risk management over the past two decades through a multifaceted lens. Utilizing bibliometric tools CiteSpace and HistCite, we dissected the historical contours, dynamic topics, and novel trends within this domain. Our findings reveal a sustained fervor in research activity, marked by extensive scientific collaboration over the past 20 years. Distinct research hotspots have surfaced intermittently, featuring 20 domains, 62 keywords, and 60 citation bursts. Keyword clustering identified seven nascent research subfields, including stochastic planning, game theory, and risk management strategies. Furthermore, reference clustering pinpointed five contemporary focal areas: robust optimization, supply chain resilience, blockchain technology, supply chain finance, and Industry 4.0. This review delineates the scholarly landscape from 2004 to 2023, uncovering the latest research hotspots and developmental trajectories in supply chain risk management through a bibliometric analysis.
... Based on this one can see that we need to streamline our focus and understand how the various dimensions of financial, market, legal, infrastructural, environmental and social risks are impacting the FCCs. Also, we know that various risks cast their shadows differently on supply chains operations (Rao and Goldsby, 2009). An understanding of risk impact helps manage respective risks more appropriately and more attentively. ...
Purpose
This article aims to evaluate published food cold chain (FCC) literature against risk management and supply chain sustainability concepts.
Design/methodology/approach
The article uses the theory refinement logic proposed by Seuring et al . (2021) to analyze the contents of FCC management-related literature published over the past 20 years. A sample of 116 articles was gathered using Web of Science and subsequently analyzed. The respective articles were then systematically coded against the frameworks of Beske and Seuring (2014) and Vlajic et al . (2012), which focused on building sustainable and robust supply chains, respectively.
Findings
The literature review revealed that debates around managing contemporary sources of disruptions/vulnerability and making FCCs more sustainable and resilient are gradually developing. However, an overarching risk management perspective along with incorporating social and environmental dimensions in managing FCCs still needs the adequate attention of the respective research community.
Research limitations/implications
The deductive internal logic of theory refinement approach used in this paper could have been further strengthened by using additional frameworks. This limitation, however, opens avenues for further research. The findings of the paper will stimulate the interest of future researchers to work on expanding our understanding related to sustainability and risk management in FCCs.
Originality/value
The paper is the first attempt to organize published FCC literature along dimensions of supply chain sustainability and risk management. The paper thus provides the respective researchers with a foundation that will help them adopt a focused approach to addressing the research gaps.
... Chains (Harland et al., 2003 ;Chopra et Sodhi, 2004 ;Christopher et Peck, 2004 ;Rao et Goldsby, 2009). Lorsque l'incertitude de la demande est élevée, au lieu de collaborer et de partager plus d'informations, il arrive souvent que l'une des entités de la Supply Chain tente de tirer profit de cette situation. ...
... Sustainability risks are those risks that may affect economic, environmental, or social aspects (Bashiri et al., 2021). Several studies have been conducted on the identification of various risks, such Tang (2006) and Rao and Goldsby (2009), which are mainly found in manufacturing industries, retail companies, and logistics services. They listed the industries being studied in the field of SC risk management. ...
This study presents a novel approach for managing sustainability risks in closed-loop supply chains (CLSCs) through a hybrid optimization model. To achieve this, we utilized published information from previous research to create a questionnaire with four sustainability risks and 18 sub-criteria. In this case, a bi-level mathematical model was proposed that considered the government's concerns regarding sustainability risks at the upper level and at the lower level were the decisions related to the manufacturers' activities in the CLSC network. In addition, a case study was conducted to demonstrate the validity. The findings highlight opportunities for cost reduction and operational efficiency through optimal capacity utilization. Moreover, the model promotes real-world adaptability by considering various scenarios and uncertain demands. Finally, we obtained specific results along with some management implications through a sensitivity analysis. The results of sustainability risk assessment based on a questionnaire and expert opinion showed that economic risks have the most significant impact among other risks.
... It is important to highlight that the concepts of supply chain disruption management, supply chain vulnerability, and supply chain resilience are all also related to security in supply chains [19][20][21][22][23][24][25][26][27][28][29][30]. However, as pointed out by Williams et al. [31], the study of security issues in the supply chain is relatively new, and much of the attention to supply chain security (SCS) comes from the growing complexity and globalization of supply chains. ...
Background: For several years, two of the major concerns of logistics managers are (i) the visibility of global supply chains and (ii) the uncertainty in deciding which existing logistics security program is the most appropriate according to the security levels for their organization. This last decision is needed to ensure traceability and visibility of the supply chain. The purpose of this paper is to present an analysis of the main public and private supply chain security management programs in Latin America and the Caribbean. Methods: A qualitative and quantitative research methodology based on thematic content analysis is followed. The four main existing security programs in Latin America and the Caribbean are systematically compared and a common general framework is developed. Results: The analysis shows a high degree of similarity between the levels of security contained in the selected programs. Conclusions: We found that there is little guidance available for companies interested in managing security risks in their supply chains through these logistics’ security programs. This article contributes to the literature on logistics security programs that is currently gaining momentum in managing security risks in global supply chains and provides academic insights into the choice and/or complementarity of one or more logistics security programs.
... Macro-economic issues such as economic slump/recession, inflation, level of trade barriers, unemployment rate, currency devaluation among others, are issues that affect the overall business context across industries in different parts of the world (Augie, 2019;BusinessDay Editorial, 2017;Cavusgil & Deligonul, 2012;Egbunike, & Okerekeoti, 2018). Macro-economic events are risk linked with changes in inflation rates, high interest rates, sudden currency devaluation, high exchange rates and economic recession (Rao & Goldsby, 2009;Sheffi & Rice, 2005;Trkman & , 2009), all of which has been identified as some influential factors that affects performance of supply chain members and cause risks to the management of supply chains (Blos, Quaddus, Wee, & Watanabe 2009;Christopher, Mena, Khan, & Yurt, 2011;Manuj & Mentzer, 2008;Natarajarathinam et al., 2009;Singh & Abdul-Wahid, 2014;Sodhi & Lee, 2007;Tang & Musa, 2011;Zsidisin, 2003;Zsidisin, Ellram, Carter, & Cavinato, 2004). ...
Purpose: Studies across developed and emerging economies alluded to the persistent decline in the performance of oil and gas marketing firms, which had been attributed to both micro-economic and macro-economic factors. The objective of the study was to determine the effect of supply chain disruptions on market performance of selected oil and gas marketing companies in Lagos State, Nigeria. Materials and Methods: The study adopted a survey research design. The total population of the study was 1,044 full-time employees of five selected oil and gas marketing companies in the downstream sector of the petroleum industry in Nigeria. The study sampled three hundred and sixty-two (362) respondents, who participated in the study. Stratified random sampling method was adopted, because it ensures less homogeneity, and a true representative of the sample, thereby the accuracy of statistical results can be higher than that of simple random sampling. Structured questionnaire was used to collect the primary data from the sample size. The research targeted 362 respondents in the survey, while 322 copies of the questionnaire administered were filled and returned. Therefore, the response rate was 91.7%. Findings: The three independent variables that were studied, explained 4.8% of the market performance as represented by adjusted R-square. This, therefore, meant that other variables not studied in this research contributed 95.2% of the market performance. Implications to Theory, Practice and Policy: The study recommended that oil and gas marketing companies should increase their commitment to adopting scenario planning and supply chain mapping strategies, in order to mitigate risks threatening their supply chains, in order to accomplish better performance.
... Supply chain risk management research has further highlighted the need to understand and reduce vulnerability to the supply chain by identifying risks (Rao and Goldsby, 2009) and ways to mitigate them (Hohenstein, 2022). While until COVID-19 most disruptions were regional, COVID-19's impact was global, with supply chains experiencing unprecedented ripple effects (Hohenstein, 2022; Queiroz et al., 2020) that jeopardized their viability (Ivanov and Dolgui, 2021). ...
Purpose
Modern supply chains have become increasingly vulnerable to disruptions, as evidenced by the recent COVID-19 crisis, the Suez Canal blockage and the war in Ukraine. The purpose of the study was to examine the impact of disruptions on organizations and their supply chains, and to examine which resilience principles and corresponding strategies were effective at maintaining and/or creating competitive advantage.
Design/methodology/approach
Anchored in contingent resource-based view theory and organizational information processing theory, the study uses an explanatory mixed-methods explanatory research design consisting of two surveys followed by semi-structured interviews to elaborate on the quantitative results.
Findings
The quantitative findings showed that data analytic capability combined with a data driven culture had a positive impact on competitive advantage through improved supply chain robustness. No similar effect for supply chain resilience on competitive advantage was found. This was explained by the qualitative findings which showed that insights enabled data analytic capability led to increased supply chain robustness by encouraging proactive measures such as safety stock and redundancies in the supply chain. However, supply chain resilience required these measures to be in place. Without them, supply chain managers were unable to act upon the insights enabled by visibility.
Originality/value
The empirical findings show that data analytic capability impacts supply chain robustness and resilience in different ways, especially in the context of unprecedented disruptions.
... Taxonomies of different types of risks and the approach to identify them in other domains such as supply chain risk management have been presented (Rao and Goldsby, 2009;Badurdeen et al., 2014). This question will address what criteria must be considered when identifying risks related to sustainable product design decision making. ...
... The issue has gained momentum in recent years, due to major crises that have affected global supply (e.g., Covid-19 pandemic, Suez Canal disruption). There are several reasons why supply chain resilience is a business enabler (for a comprehensive review of supply chain resilience, see Blackhurst et al. 2005;Rao and Goldsby 2009;Ghadge et al. 2013, Yang et al. 2021): ...
Supply chain resilience has moved up the corporate agenda in recent years, not least because of the number of crisis events that have caused supply chain disruptions. The aim of this paper is to shed light on the inbound supply chain and its strategic resilience status, using the resources already available to decision-makers within the organization. To do this, we translate a holistic set of previously developed Key Resilience Areas (KRAs) into concrete analytical steps to reveal weaknesses in the network in terms of vulnerable suppliers and materials. We illustrate our thinking with an example that focuses on the inbound side of a fictitious manufacturing company based in Hamburg, Germany.
... Regulatory frameworks for ERM in the DACH-regionThe intention for the development of ERM was based on the purpose to manage financial risks; the monetary risks in the supply chain; however, are to be managed and mitigated by Supply Chain Risk Management.(Rao and Goldsby 2009;Sodhi and Tang 2011; Wagner and Bode 2008;Heckmann et al. 2015). ...
Supply Chain Risk Management in Hidden Champions in the DACH-region
Michael H. Mayer
Globalisation is a success strategy in today’s business. For Hidden Champions, niche-leading small to medium-sized family businesses, it is imperative for their further growth that would not be possible otherwise. The underlying globalised supply chains are very complex networks that are increasingly vulnerable to disruptive events that have amplified following the trend for globalisation. Managing and mitigating such disruptive events requires a strategic layout that includes the empowerment of Hidden Champions’ employees and their supply chain partners to ensure business continuity. This strategic layout is defined as Supply Chain Risk Management, which requires close cooperation and networks between the supply chain partners to foster a better understanding of its relevance. Semi-structured interviews with senior professionals and the review of corporate publications of Hidden Champions in the manufacturing sector in the German-speaking region of Germany, Austria and Switzerland will explore how close cooperation and networks mediate the management and mitigation of disruptive events that occur in the supply chain of the Hidden Champions’ suppliers themselves. This report provides specific information on the topic area that is largely underrepresented in academic research. The identified gaps in the knowledge of managing supply chain risks by intensified cooperation between Hidden Champions and their suppliers, emphasise the relevance for further research. The pilot phase of this study supports the theoretical findings and also helps to refine and optimise the research process. A purposeful sampling strategy helps to gain access to the Hidden Champions that are known for their adversity to publicity. The main phase of this study conducts further interviews and reviews corporate publications of Hidden Champions. In parallel, this study identifies the existing body of knowledge on cooperation in topic areas related to Supply Chain Risk Management to identify further strategies HCs can use to cooperate with their supply chain partners successfully. A focus group interview with the interviewees previously participating in this study helps to confirm the earlier findings and disseminates knowledge how close cooperation can lead to superior performance of Supply Chain Risk Management that ensures business continuity and identifies business opportunities in order to stay ahead of competitors.
... There has been a great amount of research on managing risks ; but that associated with identifying risks has a long way to go (Rao and Goldsby 2009). Some papers though have done remarkable work in identifying these risks and separating them like the work of (Rao and Goldsby 2009). ...
In a world impacted by disruptive events, the importance of incorporating resilience into supply chain design has become paramount. Especially, the risks associated with food supply chains can cause severe consequences directly impacting the health and well-being of societies. Though the Australian food supply chains are notably efficient and profitable, they can no longer narrowly focus on the conventional “triangle” of time, cost, and quality. Rather, they need to consider an additional, new triangle of design attributes: resilience, sustainability, and trust to assure food accessibility and availability during unprecedented events. This chapter aims to analyze different types of risks (health, natural disasters, drought, geopolitics, and technology) threatening Australian food commodities (grain, horticulture, dairy, red meat, seafood, and wine) and explore the potential role of digital technologies as enablers of resiliency in food supply chain.
... There has been a great amount of research on managing risks ; but that associated with identifying risks has a long way to go (Rao and Goldsby 2009). Some papers though have done remarkable work in identifying these risks and separating them like the work of (Rao and Goldsby 2009). ...
In this book, a risk management approach starts off by discussing important issues related to managing supply chain disruption risks from various perspectives during VUCA times. It explores the essence and principles relating to managing these risks and provides the framework and multi-goal model groups for managing such unknown-unknown risks and subsequent disruptions at a global scale.
The book explores and presents the latest developments across different emerging topics in supply chain risk and disruption management. These include (i) an overview of supply chain risk, and disruption management tools, techniques, and approaches, (ii) a review on uncertainty modeling for decentralized supply chain systems, (iii) supply chain deep uncertainties and risks - the 'new normal', (iv) emergent technologies for supply chain risk and disruption management, (v) supply chain resilience strategies for times of unprecedented uncertainty, (vi) the role of blockchain in developing supply chain resilience against disruptions, (vii) a qualitative study on supply chain risk management adopting blockchain technology, (viii) assessment of risks and risk management for agriculture supply chain, (ix) resilience of agri-food supply chains: Australian developments after a decade of supply and demand shocks, (x) prioritization of risks in the pharmaceutical supply chains (xi) improving medical supply chain disruption management with the blockchain technology, and (xii) impacts of resilience practices on supply chain sustainability.
The book contributes significantly to the growing body of knowledge concerning the theory and practice of managing supply chain risks and disruptions in strategic management, operations and supply chain, and sustainability literature. It presents contemporary, innovative and latest developments in applying smart management tools, techniques and approaches for managing supply chain risk and disruption and future-proofing supply chains to become agile, resilient and sustainable.
This study explores the impact of entrepreneurship education on entrepreneurial orientation and intention among Indonesian students, while considering the influence of patriarchal culture. A quantitative research design using online surveys was employed, with 248 respondents who completed the entrepreneurship course in the even semester of 2022 at the Faculty of Economics, Universitas Negeri Medan. The surveys were administered online by the researchers. Partial Least Squares Structural Equation Modeling (PLS-SEM) was utilized for analyzing the variables, and Mann–Whitney tests assessed gender and educational background differences. Results reveal a positive and significant effect of entrepreneurship education on both entrepreneurial orientation and intention. Entrepreneurial orientation significantly influences entrepreneurial intention. Surprisingly, patriarchal culture does not negatively impact entrepreneurial orientation or intention; its effect differs from expectations. No significant differences were found between genders or educational backgrounds regarding the impact of entrepreneurship education, orientation and intention. Specifically, no significant differences were found in the impact of entrepreneurship education, orientation and intention between genders or educational backgrounds. Also, entrepreneurial orientation partially mediates the relationship between entrepreneurship education and entrepreneurial intention.
Equipment and material non-compliance with the project requirements is one of the issues causing delay in large EPC projects as rework actions are inevitable. Detecting and controlling the potential risks at the procurement process of equipment and material can be done to anticipate this issue. This study aims to identify the major risks and recommend the response strategies to the equipment and material non-compliance by adopting a quantitative method through expert validation using Delphi method, questionnaire surveys, and risk analysis, as well as qualitative method through benchmarking study and interview with experts. The result of this study shows that lacking in the inspection of requirement, complete Request for Quotation (RFQ) information, contract term verification, fixed design requirements, attention to Purchase Order (PO) review, supervision to engineering design and drawing, and proper fabrication procedure are major risks that can potentially cause non-compliance. Improvement in communication between stakeholders and supervision to ensure the conformity with specifications are considered as the key elements in mitigating the identified major risks.
This article aims to control the process of transport on purchase and sale within an aeronautical company. It aims at reducing the overrun in 2021 of the total cost of transport compared to the allocated budget by 50% by deploying the DMAIC method. First of all, we started by defining the processes on which our study focuses, namely the process of triggering the exceptional transport mode (air) on sale and that on purchase. Then, we collected data on these processes in order to measure their current performance and then we proceeded to analyze the said processes of triggering of the exceptional transport mode on sale to be able to determine the sources of waste in order to eliminate them. On the other hand, we identified and analyzed the root causes of the use of the mode of exceptional transport on purchase what allowed us to raise the sources of uncertainties, which are at the origin of the non-control of this process. In the light of this analysis, we proposed actions of improvement allowing to reduce the cost of transport as well as technical solutions to decrease the negative effect of the root causes that influence the control of the process of transport on purchase.
The ability to exchange ideas between practitioners and academics is critical to policymakers around the world. The emergence of low-incidence, high-severity disruption risks from Covid-19 is currently driving investment in resilient mitigation and adaptation plans in low-security environments. To ensure continuity in process management, the research project seeks to model and simulate the impact of systemic risks on the resilience of supply chains that experience large differences in lead times and deliveries.
The ability to recover between practitioners and academics is of central concern to policy makers globally. Currently, the context driven by the occurrence of low occurrence, high severity disruptive risks Covid19 has accelerated investment in resilient mitigation and adaptation programs from low certainty contexts.
The resilience between practitioners and academics is a central concern of policy makers worldwide. Currently, the context driven by the occurrence of disruptive low-occurrence, high-severity hazards has accelerated investment in resilient mitigation and adaptation programmes with spillover effects on low-certainty contexts. To ensure continuity in the management of flows, research programmes are attempting to model and simulate the effect of systemic risks on the resilience of supply chains that experience large variations in their lead times and delivery. The present study looks at the capabilities to improve recovery times in the presence of systemic risks before and during the occurrence of the Covid19 context. Then 35 systemic risk events are identified and prioritised using the Fuzzy AHP method and sequentially simulated using Fuzzy TOPSIS to assess the ability of the resilient and sustainable dimensions to mitigate and reduce the propagation of disruptive risks.
The resilience between practitioners and academics is a central concern of policy makers worldwide. Currently, the context driven by the occurrence of disruptive low-occurrence, high-severity hazards has accelerated investment in resilient mitigation and adaptation programmes with spillover effects on low-certainty contexts. To ensure continuity in the management of flows, research programmes are attempting to model and simulate the effect of systemic risks on the resilience of supply chains that experience large variations in their lead times and delivery. The present study looks at the capabilities to improve recovery times in the presence of systemic risks before and during the occurrence of the Covid19 context. Then 35 systemic risk events are identified and prioritised using the Fuzzy AHP method and sequentially simulated using Fuzzy TOPSIS to assess the ability of the resilient and sustainable dimensions to mitigate and reduce the propagation of disruptive risks.
Supply chain risk and resilience have been conceived, in the main, in terms of identifying types and sources of risk, the likelihood and impact of them being realised into losses, and the supply chain’s ability to plan for, mitigate and respond in the event of a disruption to return to a prior ‘normal’ state. An economic, focal-firm perspective has dominated SCM research. Supply chain risks arise from malicious and unintended causes. Supply chain resilience can be robustness, agility or adaptive resilience occurring at micro, meso and macro levels. Supply network risk management process involves mapping the supply network, identifying risks and their location, assessing those risks, developing a risk position and scenarios, forming a collaborative supply network strategy and implementing that strategy. Dynamic, complex, contemporary, global challenges require new approaches to supply chain risk and resilience. Five themes are proposed for the future of supply chain risk and resilience research - risk and resilience with increasing supply complexity, collaborative approaches to risk and resilience, supply market risk and resilience, crisis preparation and new styles of leadership for risk and resilience.
The COVID-19 pandemic has highlighted how uncertain our world is and, importantly, how vulnerable our operations and supply chains are—from empty supermarket shelves, to shortages of personal protective equipment and microchips, to problems with the supply and recycling of cardboard boxes, and increased food waste in restaurants due to mandatory closures. Beyond COVID-19, newspaper headlines remind us on a daily basis of the consequences of risks and the globally connected nature of our world. Oil price rises due to the war in Ukraine, staff shortages in Dutch and German airports in the summer of 2022, and the Deep Water Horizon Spill in the Gulf of Mexico in 2010 are just a few of the many examples. From these examples we see that supply chain disruptions can affect any of the three dimensions of sustainability—economic, environmental, and/or social—meaning the concepts of supply chain risk and sustainability are closely linked. That is, organizations need to manage sustainability related risks while any given risk can also threaten a company’s long-term sustainability. This chapter examines how supply chain risk management practices support organizations and their supply chains in achieving long-term economic, environmental and/or social sustainability. We examine the process of supply chain risk management—including risk identification, assessment and analysis—and the risk management strategies available to organizations and supply chains. Further, we show how supply chain resilience extends traditional supply chain risk management by enabling organizations and their supply chains to deal with unforeseeable events.
Purpose
Businesses are increasingly vulnerable and exposed to physical climate change risks, which can cascade through local, national and international supply chains. Currently, few methodologies can capture how physical risks impact businesses via the supply chains, yet outside the business literature, methodologies such as sustainability assessments can assess cascading impacts.
Design/methodology/approach
Adopting a scoping review framework by Arksey and O'Malley (2005) and the PRISMA extension for scoping reviews (PRISMA-ScR), this paper reviews 27 articles that assess climate risk in supply chains.
Findings
The literature on supply chain risks of climate change using quantitative techniques is limited. Our review confirms that no research adopts sustainability assessment methods to assess climate risk at a business-level.
Originality/value
Alongside the need to quantify physical risks to businesses is the growing awareness that climate change impacts traverse global supply chains. We review the state of the literature on methodological approaches and identify the opportunities for researchers to use sustainability assessment methods to assess climate risk in the supply chains of an individual business.
This paper focuses on the impact of a supply risk incident, namely a components shortage, on companies' performance and their responses. We rely on the case of the electronic components crisis, which began in 2016, and was the result of a sudden and unexpected increase in demand of more than 20% after two consecutive years of stagnation. The crisis forced the players in the electronics industry (professional organizations, component manufacturers, distributors, card and electronic system manufacturers) to mobilize to overcome the shortage and try to mitigate its effects. We review the literature in relation to supply chain risk management and conceptualize the supply shortage with particular reference to networks and structural holes theory. We aim to consider ex-ante and ex-post risk management practices in relation to the three key criteria of visibility, collaboration and flexibility (Kilubi and Haasis, 2015). Given the link between supply chain risk management (SCRM) best practice and performance in the research literature, our objective is to see whether current improved performance is due to the implementation of SCRM techniques or a return to more normal conditions in the market or both. Following this exploratory phase, our intention is to launch a questionnaire to targeted respondents in the sector. Abstract This paper focuses on the impact of a supply risk incident, namely a components shortage, on companies' performance and their responses. We rely on the case of the electronic components crisis, which began in 2016, and was the result of a sudden and unexpected increase in demand of more than 20% after two consecutive years of stagnation. The crisis forced the players in the electronics industry (professional organizations, component manufacturers, distributors, card and electronic system manufacturers) to mobilize to overcome the shortage and try to mitigate its effects. We review the literature in relation to supply chain risk management and conceptualize the supply shortage with particular reference to networks and structural holes theory. We aim to consider ex-ante and ex-post risk management practices in relation to the three key criteria of visibility, collaboration and flexibility (Kilubi and Haasis, 2015). Given the link between supply chain risk management (SCRM) best practice and performance in the research literature, our objective is to see whether current improved performance is due to the implementation of SCRM techniques or a return to more normal conditions in the market or both. Following this exploratory phase, our intention is to launch a questionnaire to targeted respondents in the sector.
In this study, a comprehensive classification for supply chain risks in the pharmaceutical industry is presented using the Bailey's classical strategy method and the four-stage Collier method. Initially, through the examination of texts related to the main hazard groups, supply chain elements, considering resources and functions, and categorizing upstream supply chain organizations, primary industry, and downstream supply chain organizations within the industrial and market environment, infrastructural environment, and external macro environment were modeled. In the next stage, criteria related to the security and safety of the supply chain were identified. In the final stage, a two-dimensional matrix classification for the identification of supply chain risk factors was proposed through the cross-tabulation of supply chain elements with security and safety criteria. Based on this classification and utilizing the exemplification method through a synthetic framework, a detailed list of risk factors was compiled. The
Entrepreneurship and supply chain management (SCM), respectively, have enjoyed meteoric rises in business practice and scholarly attention over the past three decades. Further, each of the two disciplines has much to offer the other. Yet, we have not witnessed sustained, meaningful integration of principles, practices, and influences despite powerful potential. This paper explores this potential by featuring prospects for entrepreneurship to influence SCM, and vice versa, bringing an entrepreneurial mindset to SCM and supply chain orientation (SCO) to entrepreneurial activities. In particular, we illustrate a validated assessment and diagnostic tool, the Corporate Entrepreneurship Assessment Instrument (CEAI), adapted for supply chain managers with the intent of instilling corporate entrepreneurial activity among supply chain professionals. Granted, supply chain managers are typically tasked with meeting expectations toward customer service effectiveness, efficiency, asset utilization, and safety. Yet, we believe that forming an organizational environment conducive to entrepreneurial thinking could be extremely valuable in the supply chain realm, enhancing capabilities like agility, plasticity, and responsiveness such that innovation and business growth are achieved alongside traditional SCM expectations. Further, we feature several avenues for future research at the interface of entrepreneurship and SCM.
Purpose
This research aims to specialise in the investigation of risk management for service-oriented manufacturing supply chains via two stages, highlighting its differences from manufacturing. The research article is commenced by executing an encyclopedic review of earlier research to ascertain the distinctive traits of service-oriented manufacturing supply chains and identify prevalent risks. Secondly, an empirical study in the construction field, amongst the industry hardest struck in the mist of the COVID-19 epidemic, is conducted to thoroughly inspect the resonant effect of these risks on service-oriented manufacturing supply chain performance.
Design/methodology/approach
In this study, to validate the resonant effect mechanism, a thorough assessment is undertaken by juxtaposing theoretical model to a newly constructed comparative model that encompasses the single effects of risks on supply chain performance.
Findings
63% variance of service-oriented manufacturing supply chain performance was showcased by the resonant effect model, compared with 46.3% in the comparative model. Moreover, each risk exerts a more glaringly significant impact on supply chain performance, asserting the mechanism of the resonant influence. Another noteworthy result involves the demand risk possessing a low effect on supply chain performance, thus emphasising the superiority of service-oriented manufacturing supply chains.
Research limitations/implications
Future research endeavours should hinge on the optimal “resonant” model explosion, thereby foreseeing and alleviating worst-case scenarios to guarantee the robustness and resilience of supply chain networks.
Practical implications
Indubitably, reducing the intensity of the resonant effect revolves around lowering the coefficient of “a,” thereby restricting/eliminating the link among risks. Therefore, the suggested resonant impact model might thus serve as “a road map”. In light of the aforementioned considerations, it is advisable that supply chain executives employ supply chain management tactics namely avoidance, prediction, and postponement, but only after meticulous consideration the costs and benefits of adopting such strategies.
Originality/value
The service-oriented manufacturing supply chain features and advantages have been analysed and explained throughout the article. The data gathered during the COVID-19 pandemic is a captivating and topical point of this paper.
Purpose
This study aims to advance a behavioural approach towards understanding how managerial perception impacts the enactment of responses to risk management during the implementation of digital technologies in industrial operations and supply chains. The purpose is to investigate the influence of (digital) technology and task uncertainty on the risk perception of managers and how this impacts risk responses adopted by managers.
Design/methodology/approach
Following an exploratory theory elaboration approach, the authors collected more than 80 h of interview material from 53 expert interviews. These interviews were conducted with representatives of 46 German companies that have adopted digital technologies for different industrial applications within manufacturing, assembly and logistics processes.
Findings
The findings provide nuanced insights on how individual and combined sources of uncertainty (technology and task uncertainty) impact the perception of decision makers and the resulting managerial responses adopted. The authors uncover the important role played by the interaction between digital technology and human being in the context of industrial operations. The exploratory study shows that the joint collaboration between humans and technologies has negative implications for managerial risk responses regardless of positive or negative perception, and therefore, requires significant attention in future studies.
Research limitations/implications
The empirical base for this study is limited to German companies (mainly small and medium size). Moreover, German culture can be characterised by a high uncertainty avoidance and this may also limit the generalizability of the findings.
Practical implications
Managers should critically revise their perception of different types of digital technologies and be aware of the impact of human-machine interaction. Thereby, they should investigate more systematic approaches of risk identification and assessment.
Originality/value
This paper focuses on the managerial risk responses in the context of digitalisation projects with practical insights of 53 expert interviews.
Purpose
By January 1, 2023, the German supply chain due diligence act (SCDDA) has become effective. This represents a strong governmental intervention into global operations and supply chain management (SCM). Hence, its frame conditions and implications are worth being studied.
Design/methodology/approach
Expert interviews with managers reveal factors of risks and opportunities as well as performance impacts and implementation issues.
Findings
A conceptual framework and research avenues are outlined.
Research limitations/implications
Pathways for SCM research and interdisciplinary studies are suggested.
Practical implications
Practitioners may gain a deeper understanding of relevant factors for managing supply chains (SCs) that are exposed to the new act.
Social implications
Understanding implications of the act may help improve social SC sustainability.
Originality/value
This study offers an initial empirical exploration and a first conceptualization of the expected consequences of the German SCDDA.
Increasingly, risk management is becoming an integral part of supply chain management, where suppliers and producers have incorporated different tools and methods that identify, assess and monitor threats, continuously and permanently. However, the peculiarities of each supply chain and the existence of numerous risk management tools make the operationalization of the supply chain risk management (SCRM) a somewhat complex process. In this context, the present research aims to evaluate and operationalize a conceptual model of SCRM for the stages of identification, analysis and risk assessment. This model was created based on the integration of the Environmental Risk Assessment and Risk Index tools. Methodologically, the research was supported by an action research conducted and applied in the Alliance Customs & Trade department of an automobile company in Brazil. As the main empirical result, twenty-nine sources of risk and their consequences for importing inputs and exporting finished products were identified. As the main result of a theoretical nature, the development of structured stages of an action research was presented, which involved researchers in a participatory and cooperative way in solving a real problem.
Supply chain disruptions, such as floods and unforeseen events, have historically caused severe economic and environmental consequences, emphasizing the need for risk mitigation strategies to improve organizational performance. The multi-dimensional nature of these risks necessitates comprehensive classification and identification to inform effective managerial decisions. This study reviews the role of GSCM practices as a strategic approach to mitigate supply chain risks and enhance economic and environmental performance. By examining existing research on supply chain risks, GSCM practices, and organizational performance, this study seeks to fill a gap in the literature, particularly in exploring the integration of GSCM practices into risk mitigation strategies. This study contributes by highlighting the intersection of supply chain risks, GSCM practices, and organizational performance, with a focus on the Malaysian manufacturing sector. Through a comprehensive review and analysis, this study aims to shed light on the role of GSCM practices in building resilient and sustainable supply chains.
The term supply chain is actually a metaphor for a complex series of interactions between a set of organizations delivering a product or service to an ultimate customer. Indeed, this series of interactions is often referred to as a supply network (Harland, 1996; Kim et al. , 2011). A supply chain starts with a set of raw materials and ends with the delivery of a finished product or service to the ultimate customer(s). The term gained prominence within the management field because of the realization that an organization's prospects are not only dependent upon its interactions with its immediate customers, competitors, and suppliers, but also on those that take place elsewhere within the chain or network.
Companies that confront environmental uncertainty are progressively counter high supply disrupt risks, delays deliveries that ultimately turned into problems in operational execution. That is why it is considered as hazards in supply chain operations and confronted by companies and the conditions underlying which produce hazards may be reduced. This study identifies the connections between natural instability and hazards in logistics management as well as directing influence on logistics adaptability. This study identifies prominent flexibility types to reduce two major facets of supply chain risks in pharmaceutical. i.e. supply as well as process risk. This observational examination uncovers that supply chain internal unpredictability indicates hazards in the supply chain; also, in doubtful situations, supply and fabricating adaptability offer assistance in diminishing the supply and prepare dangers separately. The outcome about of the ponder too confirms that there's a real solid correlation between logistic administrations in the pharmaceutical sector and components of natural vulnerability like environmental uncertainty, increment the supply and handle risk in pharmaceutical supply chain administration. However, the outcomes also point out about the developing markets such as Pakistan where the calculated framework is under creation, inner capabilities itself cannot be adequate in diminishing pharmaceutical logistic risk. The study results not as it contributes towards fulfilling main issues within the pharmaceutical supply chain hazards administration, but also give practicing supervisors and analysts distant better and even much better, higher, stronger, an improved logic of the sorts of adaptability which can reduce risk in the supply chain in numerous trade situations including pharmaceutical sector.
Purpose
The fresh food supply chain industry faces significant challenges in risk management because of the complexity, immature development and unpredictable external environment of imported fresh food supply chains (IFFSCs). This study aims to identify specific risk factors in IFFSCs, demonstrate how these risks are transmitted within the system and provide an analytical framework for managing these risks.
Design/methodology/approach
A total of 15 risk factors for IFFSCs through extensive literature review and expert consultation are identified and classified into seven levels using interpretive structural modeling (ISM) to demonstrate the risk transmission path. Fuzzy Matrice d’Impacts Croises-Multiplication Appliance Classement (MICMAC) analysis is then used to analyze the role of each factor.
Findings
The interactions of the 15 identified risk factors of IFFSCs, classified into seven levels, are visualized using ISM. The fuzzy MICMAC analysis classifies the factors into four groups, namely, dependent, independent, linkage and autonomous factors, and identifies the relatively critical risk factors in the system.
Research limitations/implications
The findings of this research provide a clear framework for enterprises operating in IFFSCs to understand the specific risks they may face and how these risks interact within the system. The fuzzy MICMAC analysis also classifies and highlights critical risk factors in the system to facilitate the formulation of appropriate mitigation measures.
Originality/value
This study provides enterprises in IFFSCs with a comprehensive understanding of how the risks can be effectively managed and a basis for further exploration. The theoretical model constructed is also a new effort to address the issues of risk in IFFSCs. The ISM and the fuzzy MICMAC analysis offer clear insights for researchers and enterprises to grasp complex concepts.
This paper examines the effect of countries’ political risk on corporate international supply chain. Using the survey data of firms in 32 countries, we find that political risk decreases firms’ purchasing proportion from foreign suppliers. We also find that the effect is less pronounced for firms with business association membership and whose main market is international, and firms in countries with better institutional environments and higher degree of development. Studies on influencing channels show that political risk decreases corporate international purchasing through the increase in corporate informal payments and the decrease in willingness to apply for import licenses. Finally, we find that the reduced corporate international purchasing accompanied by political risk decreases firms’ capacity utilization, expected sales, and research and development activities. Collectively, our findings provide new evidence on the role of political risk for firms’ international purchasing decisions.
Quality and quality management (QM) are terms, which are used across the supply chain in enterprises and industry. Although the term quality is quite widely used by practitioners and academics, there is no generally agreed definition of it, since different definitions of quality are appropriate under different circumstances (Helmold, 2023). In the quality management system (QMS) ISO 9001, quality is defined as the international standard that specifies requirements for a quality management system (QMS). Organizations use the standard to demonstrate the ability to consistently provide products and services that meet customer and regulatory requirements (ISO, 2023). ISO 9001 sets out the criteria for a quality management system and is the only standard in the family that can be certified to (although this is not a requirement). It can be used by any organization, large or small, regardless of its field of activity. In fact, there are over one million companies and organizations in over 170 countries certified to ISO 9001. This standard is based on a number of quality management principles including a strong customer focus, the motivation and implication of top management, the process approach, and continual improvement (Brugger-Gebhardt, 2016). These principles are explained in more detail in ISO’s quality management principles. Using ISO 9001 helps ensure that customers get consistent, good-quality products and services, which in turn brings many business benefits (ISO, 2023).
Overview There is a great deal of confusion regarding what supply chain management involves. 1 In fact, many people using the name supply chain management treat it as a synonym for logistics or as logistics that includes customers and suppliers. 2 Others view supply chain management as the new name for purchasing or operations, 3 or the combination of purchasing, operations and logistics. 4 However, successful supply chain management requires cross-functional integration within the firm and across the network of firms that comprise the supply chain. The challenge is to determine how to successfully accomplish this integration. In this chapter, supply chain management is defined and the uniqueness of our framework is explained. Descriptions of the transactional and the relationship management views of business process management are provided. The supply chain management processes are described and the case is made for the importance of standard business processes. Then, there is an explanation of how the supply chain management processes can be used to achieve cross-functional and cross-firm integration. This is followed by a description of how customer relationship management and supplier relationship management form the critical supply chain management linkages and how their impact on the financial performance of the organization can be measured. Also, the Partnership Model and the Collaboration Framework, two tools that can be used to build high-performance relationships in the supply chain, are introduced.
Transaction cost economics (TCE) relies on three behavioral assumptions in predicting how firms choose governance structures- bounded rationality, opportunism, and risk neutrality. We explore the implications of the neglected behavioral assumption of risk neutrality, offer an integrative appraisal of the three behavioral assumptions using trust as a unifying perspective, and explicate subjective costs and risks. We illustrate the relative ease with which previous empirical shortcomings can be addressed by incorporating risk and trust in TCE models.
Many companies leave risk management and business continuity to security professionals, business continuity planners or insurance professionals. However, the authors argue, building a resilient enterprise should be a strategic initiative that changes the way a company operates and increases its competitiveness. Reducing vulnerability means both reducing the likelihood of a disruption and increasing resilience. Resilience, in turn, can be achieved by either creating redundancy or increasing flexibility. Redundancy is the familiar concept of keeping some resources in reserve to be used in case of a disruption. The most common forms of redundancy are safety stock, the deliberate use of multiple suppliers even when the secondary suppliers have higher costs, and deliberately low capacity utilization rates. Although necessary to some degree, redundancy represents pure cost with no return except in the eventuality of disruption. The authors contend that significantly more leverage, not to mention operational advantages, can be achieved by making supply chains flexible. Flexibility requires building in organic capabilities that can sense threats and respond to them quickly. Drawing on ongoing research at the MIT Center for Transportation and Logistics involving detailed studies of dozens of cases of corporate disruption and response, the authors describe how resilient companies build flexibility into each of five essential supply chain elements: the supplier, conversion process, distribution channels, control systems and underlying corporate culture. Case examples of Land Rover, Aisin Seiki Co. (a supplier to Toyota), United Parcel Service, Dell, Baxter International, DHL and Nokia, among others, are offered to illustrate how building flexibility in these supply chain elements not only bolsters the resilience of an organization but also creates a competitive advantage in the marketplace.
Most discussions and articles about supply chain metrics are, in actuality, about internal logistics performance measures. The lack of a widely accepted definition for supply chain management and the complexity associated with overlapping supply chains make the development of supply chain metrics difficult. Despite these problems, managers continue to pursue supply chain metrics as a means to increase their “line of sight” over areas they do not directly control, but have a direct impact on their company's performance. We provide a framework for developing supply chain metrics that translates performance into shareholder value. The framework focuses on managing the interfacing customer relationship management and supplier relationship management processes at each link in the supply chain. The translation of process improvements into supplier and customer profitability provides a method for developing metrics that identify opportunities for improved profitability and align objectives across all of the firms in the supply chain.
While the literature related to supply-chain disruptions is informative, it has primarily focused on supply-chain disruptions from a general or high-level view of the phenomenon (e.g. supply-chain uncertainty, risk perceptions). Additionally, although most would agree that disruptions are present in all supply chains, there is a limited amount of information on how to deal with them from a practical perspective in both the short term and long term. Because of the importance of and research needs within this area, we launched a major multi-industry, multi-methodology empirical study on supply-chain disruptions. The study is multi-faceted in that it seeks insights into many issues within the broad area of global sourcing and supply-chain disruptions. Throughout our various interactions with industry, we found that several common themes and issues surfaced as being critical to successful disruption analysis and mitigation as well as resilient supply-chain design. Within this paper, we report on these key issues and discuss the needs within the supply-chain research to contribute to them.
Natural disasters, labor disputes, terrorism and more mundane risks can seriously disrupt or delay the flow of material, information and cash through an organization's supply chain. The authors assert that how well a company fares against such threats will depend on its level of preparedness, and the type of disruption. Each supply-chain risk - to forecasts, information systems, intellectual property, procurement, inventory and capacity - has its own drivers and effective mitigation strategies. To avoid lost sales, increased costs or both, managers need to tailor proven risk-reduction strategies to their organizations. Managing supply-chain risk is difficult, however. Dell, Toyota, Motorola and other leading manufacturers excel at identifying and neutralizing supply-chain risks through a delicate balancing act: keeping inventory, capacity and related elements at appropriate levels across the entire supply chain in a rapidly changing environment. Organizations can prepare for or avoid delays by "smart sizing" their capacity and inventory. The manager serves as a kind of financial portfolio manager, seeking to achieve the highest achievable profits (reward) for varying levels of supply-chain risk. The authors recommend a powerful what if? team exercise called stress testing to identify potentially weak links in the supply chain. Armed with this shared understanding, companies can then select the best mitigation strategy: holding "reserves," pooling inventory, using redundant suppliers, balancing capacity and inventory, implementing robust backup and recovery systems, adjusting pricing and incentives, bringing or keeping production in-house, and using Continuous Replenishment Programs (CRP), Collaborative Planning, Forecasting and Replenishment (CPFR) and other supply-chain initiatives.
Today's marketplace is characterised by turbulence and uncertainty. Market turbulence has tended to increase for a number of reasons. Demand in almost every industrial sector seems to be more volatile than was the case in the past. Product and technology life-cycles have shortened significantly and competitive product introductions make life-cycle demand difficult to predict. At the same time the vulnerability of supply chains to disturbance or disruption has increased. It is not only the effect of external events such as wars, strikes or terrorist attacks, but also the impact of changes in business strategy. Many companies have experienced a change in their supply chain risk profile as a result of changes in their business models, for example the adoption of “lean” practices, the move to outsourcing and a general tendency to reduce the size of the supplier base. This paper suggests that one key element in any strategy designed to mitigate supply chain risk is improved “end-to-end” visibility. It is argued that supply chain “confidence” will increase in proportion to the quality of supply chain information.
Supply managers must manage many risks in their increasingly competitive environments. Traditionally this meant buffering against uncertainties, which sub-optimized operational performance. Risk management can be a more effective approach to deal with these uncertainties by identifying potential losses. This conceptual study proposes that situational factors- degree of product technology, security needs, the relative importance of the supplier, and the purchasers’ prior experience with the situation should be taken into consideration when determining the level of risk management in the supply chain. Doing so can avoid unforeseen losses and lead to better anticipation of risks.
On the morning of September 11th, 2001, the United States and the Western world entered into a new era - one in which large scale terrorist acts are to be expected. The impacts of the new era will challenge supply chain managers to adjust relations with suppliers and customers, contend with transportation difficulties and amend inventory management strategies. This paper looks at the twin corporate challenges of (i) preparing to deal with the aftermath of terrorist attacks and (ii) operating under heightened security. The first challenge involves setting certain operational redundancies. The second means less reliable lead times and less certain demand scenarios. In addition, the paper looks at how companies should organize to meet those challenges efficiently and suggests a new public-private partnership. While the paper is focused on the US, it has worldwide implications.
Modified competitive, technological, social and political circumstances have magnified the potential impact of operations‐related failures; yet OM’s interest in operational ‘risks’ remains underdeveloped. This paper develops a provisional model of operational risk based upon the input and outcome dimensions of causal event and negative consequence. Discussion of risk control constitutes a complementary theoretical dimension. Empirical evidence from four operational failure case studies offers an opportunity to revise and extend the initial model. Specific conclusions address the structural and temporal pathology of operational failure and the subjective ‘layers’ of internal and external loss that appear to influence overall negative consequences. Additionally, effective risk control is highlighted as an integrated process with more similarities to service quality management than variation‐reduction process control. The paper concludes with reflection upon the limitations of the study and, given the preliminary nature of the work, some suggestions for future work.
This paper demonstrates that an important role of intermediaries in supply chains is to reduce the financial risk faced by retailers. It is well known that risk averse retailers when faced by the classical single-period inventory (newsvendor) problem will order less than the expected value maximizing (newsboy) quantity. We show that in such situations a risk neutral distributor can offer a menu of mutually beneficial contracts to the retailers. We show that a menu can be designed to simultaneously: (i) induce every risk averse retailer to select a unique contract from it; (ii) maximize the distributor's expected profit; and (iii) raise the order quantity of the retailers to the expected value maximizing quantity. Thus inefficiency created due to risk aversion on part of the retailers can be avoided. We also investigate the influence of product/market characteristics on the offered menu of contracts.
We study a single-product setting in which a firm can source from two suppliers, one that is unreliable and another that is reliable but more expensive. Suppliers are capacity constrained, but the reliable supplier may possess volume flexibility. We prove that in the special case in which the reliable supplier has no flexibility and the unreliable supplier has infinite capacity, a risk-neutral firm will pursue a single disruption-management strategy: mitigation by carrying inventory, mitigation by single-sourcing from the reliable supplier, or passive acceptance. We find that a supplier's percentage uptime and the nature of the disruptions (frequent but short versus rare but long) are key determinants of the optimal strategy. For a given percentage uptime, sourcing mitigation is increasingly favored over inventory mitigation as disruptions become less frequent but longer. Further, we show that a mixed mitigation strategy (partial sourcing from the reliable supplier and carrying inventory) can be optimal if the unreliable supplier has finite capacity or if the firm is risk averse. Contingent rerouting is a possible tactic if the reliable supplier can ramp up its processing capacity, that is, if it has volume flexibility. We find that contingent rerouting is often a component of the optimal disruption-management strategy, and that it can significantly reduce the firm's costs. For a given percentage uptime, mitigation rather than contingent rerouting tends to be optimal if disruptions are rare.
Engineering, procurement and consultancy (EPC) services play a key role in project business. EPC projects may be partial, turnkey projects or turnkey-plus projects. In all of these projects, lack of buyer-seller bonding, dependence and mutual orientation can lead to the discontinuity of incoming orders. Hence firms offering services need to address two separate dimensions of relationships. The first is that of managing relationships related to an individual project from beginning to end. The second occurs during multiple projects where companies need to be concerned about optimizing their portfolio of projects and references. For EPC firms, implementing expertise in information technology can help in nurturing new ideas.
The toy industry faces relentless change and an unpredictable buying public, which creates immense challenges in anticipating best sellers and predicting volume. Like the high-technology industry, toys also suffer from many supply chain ailments including short product life, rapid product turnover, and seasonal demand. Coupled with long supply lines and ongoing political and economic turmoil in Asia, toy makers face an unusually complex set of risks. Managers in many businesses can learn valuable lessons in managing uncertainty from toy makers. This article describes supply chain lessons focused on reducing risk by actively managing both demand and supply variability. These lessons include product variety strategies based on product extensions; rolling mix strategies; leveraged licensing agreements; coordinated outsourcing strategies; and hedging against political and currency risk by producing in many different countries.
Today's supply chain managers have been bombarded with a wide variety of the socalled leading-edge supply chain strategies. New terminologies and initiatives are being developed constantly. However not all these initiatives or strategies are appropriate for all firms. Companies need to first understand the uncertainties faced by the demand and supply of its products and then try to match these uncertainties with the right supply chain strategies. Based on an analysis of the uncertainties of supply and demand faced by the firm, this article develops a framework that can assist managers in developing the right supply chain strategy for their products.
Management is on the verge of a major breakthrough in understanding how industrial company success depends on the interactions between the flows of information, materi-als, money, manpower, and capital equipment. The way these five flow systems interlock to amplify one another and to cause change and fluctuation will form the basis for antici-pating the effects of decisions, policies, organizational forms, and investment choices." (For-rester 1958, p. 37) Forrester introduced a theory of distribution management that recognized the integrated nature of organizational relationships. Because organizations are so intertwined, he argued that system dynam-ics can influence the performance of functions such as research, engineering, sales, and promotion.
IntroductionSection 1 The Need for Business Continuity Planning Risk and the Need for Business Continuity Planning The Four Phases of Risk Realization The Legal Issues of Business Continuity Planning Building a Culture for Business Continuity Planning Section 2 Crisis Management Identifying a Crisis: A Critical Factor in Business Continuity Planning Crisis Management Planning Learning from a Crisis Plans to Rehearse the Crisis-Before the Crisis Tests the Organization The Crisis Management Command Center Trauma: The Forgotten Factor Section 3 Business Continuity Planning Overview of Business Continuity Planning Corporate Contingency Planning Trials and Tribulations of Business Continuity Planning The Business Impact Assessment Process Selecting the Right Business Continuity Planning Strategies Business Continuity in the Distributed Environment Details Overlooked in Contingency Plans Restoration Component of Business Continuity Planning Systems and Communications Security During Recovery and Repair Section 4 Business Continuity Planning for Communications Network Business Continuity Planning Business Recovery Planning for Communications Documenting a Communications Recovery Plan Adding Communications Network Support to Existing Business Continuity Plans Section 5 Maintenance and Testing of Business Continuity Plans Strategies for Developing and Testing Business Continuity Plans Maintenance and Update of Business Continuity Plans Testing Business Continuity Plans Changes that Could Affect the IS Business Continuity Plan Section 6 Business Continuity Manager's Tool Kit Business Continuity Planning Tools and Management Options Choosing a Hot Site Vendor A Proactive Approach to Improving the IS Business Continuity Plan Reengineering the Business Continuity Planning Process Backup: The Forgotten Essential Section 7 Auditor's Perspective of Business Continuity Planning Using Audit Resources in IT Business Continuity Planning How IS Auditors Can Enhance Business Continuity Planning Auditing Contingency and Business Continuity Planning
To comply with supply chain management dogma companies have cut their inventories to a minimum, lead times have been shortened, new suppliers have been chosen and the customer portfolio has been reduced. All of these activities impose a great deal of risk on the firms, jeopardising the survival of entire supply chains. In this article the author intends to investigate and document the use and meaning of risk and uncertainty within journals publishing material on supply chain management and logistics. Subsequently, suggestions for further research are proposed – the integration of risk management into the discipline of supply chain design.
This article presents a case study of decision making in a British chemical organization. The initial problem is one of whether the generation of electricity is a feasible prop osition in addition to the production of chemicals. This issue acts as a platform for protracted political debate as soon as questions of career succession and career interests are aroused. The focus shifts from economic criteria to those of career aspirations. The decision spans four years, from 1964 to 1968, and data for the case study were collected over a three-year period, from 1976 to 1979. Existing notions of decision making are examined for their adequacy in explaining the events that took place and modifications to these concepts are explored in the analysis of the case study. It is found that hoth the effects of the organization and the specific individuals within it, combine simultaneously to produce the events of this decision. The article begins with a short introduction of existing decision making theories, follows with an account of the case study, and concludes with an analysis of its decisional characteristics.
Now nearing its 60th printing in English and translated into nineteen languages, Michael E. Porter's Competitive Strategy has transformed the theory, practice, and teaching of business strategy throughout the world. Electrifying in its simplicity -- like all great breakthroughs -- Porter's analysis of industries captures the complexity of industry competition in five underlying forces. Porter introduces one of the most powerful competitive tools yet developed: his three generic strategies -- lowest cost, differentiation, and focus -- which bring structure to the task of strategic positioning. He shows how competitive advantage can be defined in terms of relative cost and relative prices, thus linking it directly to profitability, and presents a whole new perspective on how profit is created and divided. In the almost two decades since publication, Porter's framework for predicting competitor behavior has transformed the way in which companies look at their rivals and has given rise to the new discipline of competitor assessment.
More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalized Porter's ideas and applied them to assess industries, understand competitors,, and choose competitive positions. The ideas in the book address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing.
Competitive Strategy has filled a void in management thinking. It provides an enduring foundation and grounding point on which all subsequent work can be built. By bringing a disciplined structure to the question of how firms achieve superior profitability, Porter's rich frameworks and deep insights comprise a sophisticated view of competition unsurpassed in the last quarter-century.
Book Description
Publication Date: June 1, 1998 | ISBN-10: 0684841487 | ISBN-13: 978-0684841489 | Edition: 1
Clique Aqui
Supply chain risk management (SCRM) is of growing importance, as the vulnerability of supply chains increases. The main thrust of this article is to describe how Ericsson, after a fire at a sub-supplier, with a huge impact on Ericsson, has implemented a new organization, and new processes and tools for SCRM. The approach described tries to analyze, assess and manage risk sources along the supply chain, partly by working close with suppliers but also by placing formal requirements on them. This explorative study also indicates that insurance companies might be a driving force for improved SCRM, as they now start to understand the vulnerability of modern supply chains. The article concludes with a discussion of risk related to traditional logistics concepts (time, cost, quality, agility and leanness) by arguing that supply chain risks should also be put into the trade-off analysis when evaluating new logistics solutions – not with the purpose to minimize risks, however, but to find the efficient level of risk and prevention.
Risks and uncertainties are ever more noted and factored into decision making today, and those stemming from supply chains are prominent in the competitiveness and viability of companies and organizations. The idea that every supply chain is made up of five internal chain/network constructs is presented, and these are physical, financial, informational, relational, and innovational. Further, four categorizations of relevant product/supply costs are presented as are four types of supply risks.
The reason for this research originates from the time- and functional dependencies between firms’ activities and resources in supply chains. These dependencies cause vulnerability. The principal objective of this research is to conceptualize the construct of vulnerability in firms’ inbound and outbound logistics flows. The vulnerability construct of this research consists of two components: disturbance and the negative consequence of disturbance. This research is based upon a two-phase process utilizing sequential triangulation. It is proposed that the vulnerability in the inbound logistics flows from sub-contractors, and the vulnerability in the outbound logistics flows to customers, may be measured and evaluated by four principal dimensions, namely: service level, deviation, consequence and trend. In addition, a model of inbound and outbound vulnerability scenarios in supply chains is introduced for teaching and training purposes, as well as to position and compare the outcome of replication studies of vulnerability in firms’ inbound and outbound logistics flows.
Purpose
The paper aims to discuss the findings of a humanitarian logistics manager field study on response activity concerning the 2004 tsunami disaster in terms of what should have occurred and to present a comprehensive hindsight‐analysis case for a model placing natural disaster response activity clearly within the context of local‐nation‐led, holistic and inclusive natural disaster planning.
Design/methodology/approach
The qualitative testing of a conceptual framework of natural‐disaster response requirements through interviews with tsunami‐response logistics managers, the analysis of the findings in the light of tsunami‐hindsight “effective disaster management” themes of recent academic literature and multi‐agency reports and the development of the holistic, inclusive planning model.
Findings
That natural disaster response activity needs to be viewed holistically in the context of a disaster management planning continuum that ideally starts well before the response action is required and of which locally‐led inclusiveness is a crucial component.
Research limitations/implications
The model needs to be tested for its applicability as a planning instrument and guide for response activity in the context of future natural disasters.
Practical implications
The holistic/inclusive planning model has been developed to guide natural disaster planners as well as add to academic discourse in the search for natural disaster management solutions.
Originality/value
The study is original with its field‐based qualitative research foundation and reflective hindsight analysis.
The notion of risk is receiving greater attention in research on supply chain management by academics and practitioners alike. As firms collaborate and combine forces to compete as extended enterprises against other integrated supply chains, risk is linked to the interdependence among supply chain partners. Academic interests appear to focus mostly on the risks associated with logistics and its impact on the timely delivery of goods. Beyond these concerns, the events of 9/11 have heightened consideration for supply chain risks related to possible security breaches and terrorism. This paper highlights six areas of supply chain-related risks. It discusses these risks at length, showing how they are endemic to the extended enterprise, and attempts to develop a typology for categorizing them. It also addresses the implications for supply chain managers as they balance a concern for risk with their efforts to search for, select, nurture, and manage their set of supply chain partners.
Manufacturing flow management is the supply chain management process that includes all activities necessary to move products through the plants and to obtain, implement, and manage manufacturing flexibility in the supply chain. Manufacturing flexibility reflects the ability to make a variety of products in a timely manner at the lowest possible cost. To achieve the desired level of manufacturing flexibility, planning and execution must extend beyond the four walls of the manufacturer. In this paper, we describe the manufacturing flow management process in detail to show how it can be implemented within a company and managed across firms in the supply chain. We examine the activities of each sub-process; evaluate the interfaces with corporate functions, processes, and firms; and provide examples of successful implementation.
Purpose – The purpose of this paper is to address the increasingly important issue of the impact of product design on supply chain risk management in an era of global supply arrangements. The need to include product design considerations in the development of global supply chain strategies is highlighted. Design/methodology/approach – The research methodology is based on an in-depth longitudinal case study of a major UK retailer. Data collection tools included observation of supplier meetings/workshops, semi-structured interviews and access to key company documentation and archives. Findings – This paper provides a framework for design-led supply chain risk management and thus presents a case for recognising design as more than a creative function but as a platform to manage risk in supply chains. Research limitations/implications – The empirical research reported in this paper is specific to the clothing manufacturing and fashion retail industry. Though the findings will most likely apply to all industries and supply chains where design has an integral role and plays an important part in the competitiveness of the final product, there would be benefit in extending the research into other sectors. Practical implications – The increased trends to outsourcing and offshore sourcing and the elimination of trade barriers have added to the competitive pressures faced by clothing retailers, hence frameworks to manage supply chain risks are significant to the survival of companies from this sector. Originality/value – Whilst there is a growing literature in the field of supply chain risk there is less empirical evidence providing practical examples of the impact of product design on risk. Design-led risk management offers a novel approach to mitigating supply chain risk.
Systems thinking is holistic, that is it deals with wholes rather
than parts and is relevant to tackling ill-structured
“messy” problems. Reviews the literature on risk to identify
the techniques and concepts used in the management of risk and the
identification of potential failures. The majority of the concepts
identified are found to be systematic and reductionist. Also identifies
related concepts not used in the techniques which are found to be more
holistic. Classifies the concepts according to their use and holistic
qualities. Briefly describes a systems approach to failures. As risk is
associated with uncertainty and ill-structured problems, suggests that
systems thinking could be a valuable aid to risk management.
Reviews the structure, characteristics and problems of food supply
logistics in the Russian Republic and other former Soviet states.
Examines the structural causes of food short-ages, followed by a
description of changes in food supply systems since the introduction of
free market policies. The major part of the report is devoted to an
analysis of the logistical problems in the food supply chain from food
production, through processing, storage and transport.
Purpose – To minimise business risk of incurring increased marketability and acquisition costs due to volatile demand exacerbated by the bullwhip phenomenon. Design/methodology/approach – Based on the vision of the seamless supply chain and the active support of the decision support system exploiting the automatic pipeline inventory and order based production control system (APIOBPCS) algorithm. The approach has been tested on simulated real-world value stream data. Findings – Demonstrates that it is possible to reduce risk via a combination of the APIOBPCS algorithm plus optimal location of the material flow de-coupling point separating lean and agile pipelines. Research limitations/implications – The methodology only substantially reduces risk generated within the supplier echelon. External bullwhip must be reduced via other routes to streamline flow. Practical implications – Provides businesses with a composite methodology for matching their ordering systems to enable risk minimisation within their span of control. Originality/value – The Bullwhip On-costs Johari Window is a unique tool for mapping supply chain ordering policy risks.
This article presents a secondary analysis of the literature, supplemented by case studies to determine if large companies increase their exposure to risk by having small- and medium-size enterprises (SMEs) as partners in business critical positions in the supply chain, and to make recommendations concerning best practice. A framework defining the information systems (IS) environment is used to structure the review. The review found that large companies’ exposure to risk appeared to be increased by inter-organisational networking. Having SMEs as partners in the supply chain further increased the risk exposure. SMEs increased their own exposure to risk by becoming partners in a supply chain. These findings indicate the importance of undertaking risk assessments and considering the need for business continuity planning when a company is exposed to inter-organisational networking.
Purpose
This paper seeks to understand business requirements for supply chain risk management (SCRM) from a practitioner perspective.
Design/methodology/approach
Based on the findings from an exploratory quantitative survey and qualitative focus group discussions with supply chain managers, some issues of SCRM are derived and structured along the three conceptual levels of “philosophy”, “principles” and “processes”.
Findings
The survey showed that 44 per cent of all eight responding companies expect the vulnerability of their supply chains to increase in the next five years. However, the concept of SCRM is still in its infancy.
Originality/value
The paper contributes to our knowledge on SCRM by presenting the business requirements from a practitioner perspective and by deriving a structure for an integrated approach to SCRM which can guide further research.
Purpose
Global supply chains are more risky than domestic supply chains due to numerous links interconnecting a wide network of firms. These links are prone to disruptions, bankruptcies, breakdowns, macroeconomic and political changes, and disasters leading to higher risks and making risk management difficult. The purpose of this paper is to explore the phenomenon of risk management and risk management strategies in global supply chains.
Design/methodology/approach
This paper is based on an extensive literature review and a qualitative study comprising 14 in‐depth interviews and a focus group meeting with senior supply chain executives.
Findings
The study provides insights into the applicability of six risk management strategies with respect to environmental conditions and the role of three moderators.
Research limitations/implications
The model is developed in a global manufacturing supply chain context. It should be tested in other contexts and with other methods to provide generalizability. The study takes a much needed step toward building a theory of risk management in global supply chains, which opens important future research directions.
Practical implications
This research provides direction to managers for choosing risk management strategies based on the global supply chain environment. Moderators have practical implications for global supply chain managers.
Originality/value
The paper addresses an identified gap in the literature for selecting risk management strategies in global supply chains. It employs grounded theory, a methodology appropriate for theory‐building, to explore a phenomenon with an inadequate theoretical base.