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Supply Chain Risk Management: Understanding the Business Requirements from a Practitioner Perspective
Abstract
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.
... Supply Chain Risk Management (SCRM) is a managerial activity that includes the identification and management of supply chain risks, through a coordinated approach between SC members, to reduce SC vulnerability as a whole (Christopher, 2002;Jüttner, 2005). The main focus of SCRM is to understand, and try to avoid the ripple effects that risks can have on a SC (Norrman & Jansson, 2004). ...
... In essence, risk within SC context is viewed as disruptions of different flows (materials, information, and cash) that take place between SC parties. A key feature of SC risk is that it extends beyond the boundaries of a single organization (Jüttner, 2005). Jüttner, Peck, and Christopher (2003) highlighted the difference between SC risk sources and risk consequences. ...
... Brindley (2004) defines SCRM as "the management of supply chain risks through coordination or collaboration among supply chain partners so as to ensure profitability and continuity". Christopher (2002) and Jüttner (2005) define SCRM as "a managerial activity that includes identification and management of supply chain risks, through a coordinated approach amongst SC members, to reduce SC vulnerability as a whole". Rao and Goldsby (2009) identified the key definitions of SCRM that exist in the literature. ...
Purpose-Recently, the risk of counterfeit was reported as a high prevalent risk in the pharmaceutical supply chain (PSC). The continued presence of counterfeit medicines in the legitimate supply chain is considered as one of the biggest challenges that face pharmaceutical manufacturers operating in the Egyptian market. This not only imposes significant threats to supply chain (SC) performance but also negatively affects public health. The purpose of this paper is to investigate the counterfeit risk within the PSC in Egypt. Design/methodology/approach-This research follows a qualitative approach. Primary data were collected through interviewing senior experienced managers within various functional departments at the largest local private pharmaceutical corporation in Egypt. The findings were then scrutinized and discussed in the light of available literature. Findings-The research highlighted the nature and types of drug counterfeiting activities occurring in the PSC. Participants indicated that counterfeiters mostly pass of their fake products as genuine drugs, to deliberately deceive customers. Potential infiltrations of counterfeit drugs into the legitimate supply chain were identified. High level of supply chain fragmentation and minimal coordinated efforts are evident. Contrary to expectations, no clearly defined strategy is devised by supply chain members to manage counterfeit risk, implying low degree of preparedness toward counterfeit risk. Practical implications-Greater efforts are needed to improve transparency within the PSC through greater communication and information sharing. As a result, unauthorized products cannot be accounted for throughout the supply chain and will be treated and removed from the market. Originality/value-This research has gone some way towards enhancing our understanding of how counterfeit drugs may infiltrate the legitimate PSC. The empirical findings offer valuable insights for tailoring balanced and effective risk management strategies for counterfeit risk. Finally, this research will serve as a base for future rigorous studies addressing the issue of counterfeit risk within the pharmaceutical industry in Egypt.
... Additionally, technological advancements, while enhancing efficiency, have also introduced new risks. Companies that rely heavily on global outsourcing, single sourcing, and just-in-time inventory strategies have found their supply chains increasingly fragile, lacking the flexibility needed to adapt to unexpected disruptions [101][102][103][104][105]. ...
... A comprehensive evaluation of risks across multiple dimensions is necessary to mitigate the substantial impact these disruptions have on supply chain management. Supply chains are exposed to various sources of risks, which can be categorized into operational and disruption risks, each of the risk sources is closely related to logistics risks or gives rise to logistics risks [103,[114][115][116][117]. ...
Mitigating Supply Chain Vulnerabilities: A Bibliometric Analysis of Sustainable Logistics for Resilience and Risk Management with Perspectives on the Automotive Industry
... The extent of sharing information on demand forecasting and market trends. Juttner [65], Morris and Carter [66] The extent to which profits and costs in business operations are shared. The extent to which parties collaboratively address and manage risks and losses between each other. ...
... This implies that for companies to secure a competitive advantage, they must operate efficiently, and to achieve this, companies need to establish relationships that involve sharing both mutual benefits and losses. Previous studies have emphasized that capabilities such as effective exchange, communication, and collaboration with trading partners are prerequisites for achieving lead time reduction, cost savings, and similar benefits [62,65]. ...
This study aims to explore the significance of trust among companies within the supply chain and investigate its effect on collaborative supply chain risk management. In the current uncertain business environment, it is crucial for companies to establish trust relationships with their trading partners and collaboratively manage risks. This research seeks to understand how such trust relationships influence collaborative risk management and, subsequently, the effect of risk management collaboration on logistics performance. This study surveyed manufacturing companies in the Korean supply chain, and data were analyzed using SPSS 23.0 and AMOS 23.0. The results of this study imply that cognitive trust, related to the partner’s expertise and capabilities, is more crucial than emotion-based affective trust in fostering collaborative supply chain risk management among companies within the supply chain, especially in the current unpredictable and complex business environments. Given the supply chain disruptions caused by uncertainties in the business environment, it is imperative to effectively manage risks and restructure the disrupted supply chain. Therefore, companies need to strive to demonstrate their expertise and capabilities to build cognitive trust and enhance logistics performance through supply chain risk management collaboration.
... Previous studies suggest that supply chain risk refers to the negative deviation from expected performance measures, resulting in negative consequences for the focal firm (Wagner & Bode, 2008) and the potential variation of outcomes influencing the decrease of value-added at any activity cell in a chain (Bogataj & Bogataj, 2007). In the context of supply chain risk management, it can be defined as the recognition and control of supply chain risks to decrease susceptibility through a collaborative approach between supply chain actors (Jüttner, 2005;Jüttner et al., 2003). Supply chain risk management involves the administration of risks through allocation and collaboration among participants to ensure effectiveness and efficiency for the supply chain . ...
In today's dynamic business environment, supply chain disruptions and uncertainties were inevitable, posing significant challenges to firms aiming to maintain a competitive edge. Firms faced increasing risks from global supply chain complexities, geopolitical tensions, and unexpected events such as natural disasters and pandemics. This study addressed a critical knowledge gap by exploring the nuanced interplay between supply risk management (SRM) practices, a firm's competitive advantage, and the moderating influences of intellectual capital (IC) and risk management capability (RMC). Our research investigated these relationships through a survey of 284 Ghanaian SMEs and a comprehensive analysis. The results revealed that effective SRM practices significantly enhanced a firm's competitive advantage by enabling better risk identification, assessment, and mitigation strategies. However, contrary to conventional wisdom, the study found that high levels of intellectual capital could negatively moderate this relationship. This unexpected finding suggested that over-reliance on IC might introduce cognitive biases or resource allocation challenges that undermine SRM effectiveness, potentially leading firms to underestimate risks or misallocate resources. Conversely, the findings confirmed that robust RMC positively moderated the relationship between SRM and competitive advantage. Firms with strong risk management capabilities were better equipped to align their risk management practices with broader organizational strategies, enhancing their ability to respond to and recover from disruptions. This alignment allowed firms to maintain operational continuity and achieve strategic objectives, thereby reinforcing their competitive position in the market. This study contributes to the literature by providing a nuanced understanding of how SRM, IC, and RMC interacted to influence competitive advantage. It offered both theoretical insights into the complex dynamics of supply chain risk management and practical implications for organizations striving to optimize their supply chain strategies amidst a volatile
... A supply chain is a network of organizations involved in producing goods and services to meet consumer needs (Christopher and Peck, 2004). SCRs are not confined to individual firms but also involve coordination and cooperation across organizational boundaries (Jüttner, 2005). SCR can encompass both operational risks and disruption risks (Tang, 2006). ...
Purpose
Supply chain risk (SCR) has been extensively explored in various sectors, yet there is a notable scarcity of SCR studies in the dairy industry. This study aims to identify the primary and distinctive risks in the dairy supply chain (DSC), propose a typological model for SCR, highlight challenges specific to the DSC and offer mitigation strategies.
Design/methodology/approach
We employ a systematic literature review to collect and review relevant research articles published between 2010 and 2019 to identify the main risks and mitigation strategies associated with the DSC, enabling the construction of a typological model of DSC risks.
Findings
Results of the systematic review of the SCR literature show that the main DSC risks include on-farm risk (e.g. risks originating from the farming system), off-farm risk (e.g. supply risk, demand risk and manufacturing risk) and inherent SCR (e.g. logistics risk, information risk and financial risk). Notably, we find that the farming system plays a key role in today’s agricultural supply chain operations, indicating the importance of considering on-farm risk in the entire DSC. Additionally, mitigation strategies are located in response to the identified DSC risks by the typology of DSC risks.
Originality/value
This paper is the first attempt to develop a typological model of SCR for the dairy industry by a systematic literature review. The findings contribute to providing a comprehensive understanding of DSC risks by bridging the gap of ignoring the on-farm risks of the DSC in the existing literature. The typology may serve as a guide in practice to develop mitigation strategies in response to DSC risks.
... These early strategies typically employed reactive approaches, where companies responded to risks only after disruptions had already impacted the supply chain (Norrman & Jansson, 2004). However, as supply chains became more global and complex, scholars began advocating for proactive risk management practices, where risks are identified, assessed, and mitigated before they materialize (Jüttner, 2005). Proactive strategies emphasize the importance of building resilience into the supply chain, enabling companies to better withstand and recover from disruptions (Sinha et , 2004). ...
This study investigates strategic approaches to mitigating risks in transportation and logistics within global supply chains, focusing on the integration of advanced technologies, flexibility, collaboration, and sustainability. By employing the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, the study systematically reviews 37 key articles to provide a comprehensive understanding of modern risk management practices. The findings reveal the increasing reliance on technologies such as predictive analytics, the Internet of Things (IoT), and blockchain for enhancing visibility, monitoring, and decision-making. Flexibility in logistics networks, including alternative sourcing and diversified transportation routes, emerged as crucial for mitigating disruptions, while collaboration among supply chain partners, particularly through real-time information sharing, significantly reduces risk exposure. Additionally, the study highlights the growing integration of sustainability into risk management, addressing climate change and environmental risks. This research underscores the need for proactive, adaptable, and sustainable risk management strategies to maintain supply chain resilience in the face of evolving global challenges.
... These early strategies typically employed reactive approaches, where companies responded to risks only after disruptions had already impacted the supply chain (Norrman & Jansson, 2004). However, as supply chains became more global and complex, scholars began advocating for proactive risk management practices, where risks are identified, assessed, and mitigated before they materialize (Jüttner, 2005). Proactive strategies emphasize the importance of building resilience into the supply chain, enabling companies to better withstand and recover from disruptions (Sinha et , 2004). ...
This study investigates strategic approaches to mitigating risks in transportation and logistics within global supply chains, focusing on the integration of advanced technologies, flexibility, collaboration, and sustainability. By employing the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, the study systematically reviews 37 key articles to provide a comprehensive understanding of modern risk management practices. The findings reveal the increasing reliance on technologies such as predictive analytics, the Internet of Things (IoT), and blockchain for enhancing visibility, monitoring, and decision-making. Flexibility in logistics networks, including alternative sourcing and diversified transportation routes, emerged as crucial for mitigating disruptions, while collaboration among supply chain partners, particularly through real-time information sharing, significantly reduces risk exposure. Additionally, the study highlights the growing integration of sustainability into risk management, addressing climate change and environmental risks. This research underscores the need for proactive, adaptable, and sustainable risk management strategies to maintain supply chain resilience in the face of evolving global challenges
... SC vulnerability refers to the occurrence of a serious disruption due to SC risks that may affect the ability of the SC to meet the needs of end users (Jüttner 2005). SC vulnerability is defined as the inability of the SC to respond to disruptions at a given time (Azevedo et al. 2008). ...
The selection of appropriate suppliers is a critical issue for the survival of a company in a competitive market environment and is also one of the most significant challenges for organizations. The present study proposes a method for supplier selection by organizing them using clustering techniques. In this study, suppliers are selected based on a set of resilience criteria. The Improved Best Worst Method was used to determine the weight of the criteria using GAMS software. The two clustering algorithms including K-means and DBSCAN were used in this study. The DBSCAN algorithm was used to identify the noise points as the K-means algorithm could not identify these points properly. Both algorithms were implemented in the MATLAB software considering a scenario with 30 suppliers and 22 resilience criteria. The criteria including raw material quality, delivery time of raw materials, and reliability have the highest priority. Based on the results, some managerial implications were also presented.
... These may include some applications such as shipping, quality performance, financial standing and capacity adequacy. [64,75,76,79,81] Material order risks SR-28 ...
Sustainability means the most effective and efficient use of existing resources to meet the needs of future and current generations. Nowadays, with the increase in global environmental problems as well as social and economic problems, sustainability in the supply chain of the automotive industry has become increasingly important. In our study, after conducting an extensive literature review in the automotive industry, consulting with experts, and identifying 35 different Sustainability Risks across 5 sustainability dimensions, we proposed a total of 40 risk strategies to mitigate these risks. Using the evaluations of automotive supply chain experts from one of Turkey's leading logistics companies, risk strategies were ranked using the Interval-Valued Neutrosophic Fuzzy Evaluation based on Distance from Average Solution (IVN Fuzzy EDAS) method, and the best strategies were determined. Accordingly, it has been determined that the optimal approach for companies is to establish and implement legal compliance procedures and programs while adhering to prevailing regulations and policies. It aims to make a useful contribution to the literature in terms of covering this subject for the first time with fuzzy EDAS method, adding new sustainability risk dimensions, and developing broad-level risk and risk prevention strategies on the subject. In this study, the interval-valued neutrosophic fuzzy EDAS method was applied for the first time to the issue of sustainability risks in the automotive industry. At the same time, this study aims to contribute to the literature by adding new dimensions to sustainability.
... Businesses use risk management strategies to preserve long-term competitiveness (Jena and Meena, 2019). Similarly, Jüttner (2005) established a link between supply chain strategy and supply chain risk management. Abdelilah et al. (2021) argued that combining lean and agile processes is one of the key skills for reducing supply chain risk. ...
Purpose
This study aims to investigate the nexus between information technology (IT) competency, supply chain agility and supply chain performance in the hospitality industry. The authors examine the association of IT competency and supply chain performance through supply chain agility while considering the boundary condition role of risk management.
Design/methodology/approach
The authors collected data via a questionnaire from 302 full-time hotel and restaurant managers in Pakistan.
Findings
Study results reveal a positive association between IT competency and supply chain performance while supply chain agility mediates this relationship. In addition, risk management is identified as an important boundary condition that moderates the direct and indirect relationships between IT competency and supply chain performance.
Originality/value
Study results reveal an important association between IT competency and supply chain agility contributing to the scholarly discussion on supply chain issues in the hospitality sector.
... The primary objective of supply chain risk management is to decrease the susceptibility of the supply chain and enhance its ability to recover from disruptive events. Risk management is a method to find a compromise between performance on the one hand and risk on the other [73]. The goal is by no means to avoid all possible risks. ...
Supply chain risk management (SCRM) is a vital component of contemporary supply chain management. This is because supply chain disruptions (SC) can have significant and detrimental effects, such as financial losses, reputational damage, and even the failure of a business. Nonetheless, implementing SCRM can be difficult due to the intricate and unpredictable nature of SC operations. These operations involve a variety of entities, geographies, and processes, thereby introducing complexity and uncertainty to the task of SCRM. In order to implement effective SCRM, it is necessary to identify, evaluate, and mitigate various sources of risk in real-time, including control, process, demand, and supply risks. However, currently, there is no comprehensive decision support system (DSS) that can assist decision-makers in all the stages of the SCRM process. Although several risk assessment mechanisms exist, they are not capable of handling the complexity of SCRM-related issues in real-time. Furthermore, existing DSSs tend to focus on specific aspects of SCRM and do not take into account the entire process. Therefore, there is a need for a more holistic approach that can deal with the intricacies and uncertainties of SCRM-related issues and provide decision-makers with up-to-date information to make well-informed decisions. The proposed framework, NeutroMAS4SCRM, combines Neutrosophic Data AHP with a multi-agent system (MAS) to manage supply chain risks (SCRs) more effectively. It leverages the MAS for prompt coordination and response, and the NDAHP technique for event extraction from current datasets and risk evaluation. The framework can identify potential risks that require comprehensive risk management and classify them based on predefined criteria using the NDAHP approach, which surpasses the limitations of vagueness, uncertainty, and complexity. Moreover, it immediately notifies relevant individuals of unexpected changes and utilizes simulation methods to establish a quantitative risk assessment and control system. The proposed MAS for the supply chain is implemented on the JADE agent platform, where message content based on FIPA-ACL is specified using a dedicated AgentSCRM ontology. The simulation-based DSS evaluates the framework by assessing cost risks and harmful effects, determining its efficacy in assisting companies to manage risks efficiently. The simulation results demonstrated that the Neutro-MAS4SCRM framework can effectively decrease risk costs. In conclusion, NeutroMAS4SCRM is a promising tool for decision-makers seeking to enhance their SCRM strategies and improve their capabilities to address unforeseen risks.
... Trust-based partnerships are essential for driving enterprise green innovation (Xia et al., 2020). Additionally, stable enterprise relationships form the foundation of information communication and risk sharing, which enhances integrated design and supply chain visibility for GBs (Jüttner, 2005). On the other hand, the acceptance of hypotheses H4a, H4b, and H4c indicates positive interactions among the risk indicators. ...
Green buildings are more effective in saving energy and reducing carbon dioxide emissions than conventional buildings. However, the long-term development of green buildings depends heavily on the resilience of their supply chain. This study examines how capability factors (readiness, response, and recovery) and risk factors (technological, organizational, and environmental) interact to influence the resilience of the green building supply chain, using a third-order partial least squares structural equation model. The results indicate that response capability and technological risk significantly impact resilience, while readiness capability mitigates organizational and environmental risks. The study suggests three strategies to enhance supply chain resilience: strengthening readiness capabilities and increasing resistance to organizational or environmental risks. The findings provide green building project managers with practical insights and tools to make informed decisions that improve supply chain resilience.
... In recent years, attention to risk and uncertainty in the supply chain has become increasingly attractive and important for researchers and scholars. Risk in the supply chain refers to unforeseen events that may disrupt the natural flow of materials and information within the chain, consequently causing disruptions in chain performance (Jüttner, 2005). Risk in the supply chain refers to any threat, danger, or uncertainty that may affect the performance and operations of the supply chain. ...
Sustainable development in supply chain management is of great importance, as it emphasizes that the procurement process in sustainable supply chains addresses not only current needs but also future requirements. This subject, by improving processes, reducing waste and energy consumption , increasing efficiency, and establishing sustainable relationships with suppliers and customers, contributes to the sustainability and success of companies in international competition. Moreover, hub location is crucial for optimizing distribution processes and reducing costs in the supply chain, especially for perishable products with a defined and limited shelf life, which imposes various constraints on the supply chain. Additionally, to bring mathematical models closer to reality, uncertainty approaches can be employed, and strategies to deal with uncertainty can be considered. This research delves into these issues in the realm of supply chain management, focusing on sustainability and uncertainty, and provides a review of research conducted in the literature of this field.
... In the initial phases, risk management was characterized by a focus on individual elements of the supply chain, such as supplier reliability and logistics efficiency. Jüttner (2005) describes this period as one where risk management was primarily concerned with operational risks and the immediate mitigation of disruptions. The approach was largely siloed, with limited collaboration between different components of the supply chain. ...
This study explores the strategic integration of risk management and Human Resources (HR) practices within the context of supply chain management, aiming to identify how such integration enhances organizational resilience and sustainability. Employing a systematic literature review and content analysis, the study examines scholarly articles from key databases, focusing on the period from January 2000 to the present. The methodology involves a comprehensive search strategy, stringent inclusion and exclusion criteria, and a detailed selection process to distill insights from relevant literature. Key findings reveal that strategic HR practices, such as talent management, leadership development, and fostering a risk-aware culture, significantly contribute to mitigating supply chain risks and bolstering resilience. Furthermore, the study highlights the pivotal role of technological advancements, including artificial intelligence, blockchain, and the Internet of Things, in supporting the dynamic integration of risk management and HR practices. This integration not only addresses operational efficiencies but also aligns with strategic objectives towards sustainability and adaptability in the face of global disruptions. The study concludes that the strategic importance of integrating risk management with HR practices cannot be overstated, emphasizing its necessity for building agile, resilient, and sustainable supply chains. As organizations navigate the complexities of modern supply chains, this integrated approach offers a pathway to not only survive but thrive amid uncertainties, underscoring a blueprint for sustainable competitive advantage in evolving global markets. This review contributes to the existing body of knowledge by providing a comprehensive overview of current practices and future directions for integrating risk management and HR practices in supply chain management.
Purpose
This study aims to develop a process model that captures the co-evolution of supply chain risk management (SCRM) and value creation. The model is designed to support multinational small and medium-sized enterprises (SMEs) in addressing the challenges of geopolitical disruptions, such as the US–China trade war, by providing a framework for simultaneously strengthening SCRM and enhancing value delivery in the global supply chain.
Design/methodology/approach
This study employed an inductive case study methodology to construct a theoretical process model of SCRM, drawing on data from semi-structured interviews with eight multinational SMEs impacted by the US–China trade war since January 2018. Using grounded theory techniques—including open coding, axial coding, and selective coding—the interview data were systematically analyzed to develop a process model that captures the complexities of managing supply chain risks in a volatile geopolitical context.
Findings
This study presents a process model illustrating the co-evolution of SCRM and value creation within firms in response to geopolitical disruptions. The evolutionary process of SCRM progresses through four stages: decoding disruption dynamics, synergizing the information ecosystem, catalyzing adaptive transformation, and architecting resilient adaptation. Correspondingly, the value creation process evolves alongside SCRM, aligning with each stage. It includes value-contextualized recalibration, value-driven communication, value-centric customization, and value-sustained resilience.
Originality/value
This study offers a novel contribution by developing a process model that captures the co-evolution of SCRM and value creation. It identifies four critical stages in the SCRM life cycle, each intricately aligned with corresponding phases of value creation. This integrated framework provides a strategic pathway for firms to navigate supply chain risks while simultaneously enhancing value delivery, particularly in the context of geopolitical disruptions such as the US–China trade war. By linking SCRM and value creation, the study equips multinational SMEs with a practical and comprehensive roadmap for building resilience and competitiveness in an increasingly volatile global environment.
O presente trabalho aborda um estudo de caso realizado em uma indústria de Cosméticos multinacional de grande porte, na qual foi estruturada uma operação de terceirização por meio do departamento de Compras. Com esta dissertação pretendeu-se demonstrar que a estratégia adotada foi importante para se garantir vantagem competitiva no mercado globalizado, além de reduzir custos e aumentar o nível de atendimento a taxa de serviço para a linha de bisnagas plásticas. Para isso, contextualizou-se o setor de Compras dentro da Cadeia de Suprimentos, destacando suas características e papel estratégico dentro das organizações. Seguindo essa mesma linha, foi destacada a situação da área de Cosméticos no cenário mundial e brasileiro, além do posicionamento que o Brasil conquistou frente esse mercado. Em adicional, construiu-se uma lógica que interligasse a identificação de problemas nesta indústria com a necessidade de programar de um modelo de gerenciamento para tal. Assim, comprovou-se que a terceirização foi um bom recurso para promover ganhos financeiros de escala e flexibilidade produtiva para a empresa estudada, pois além de ter recuperado o bom nível de taxa de serviço, reforçou sua capacidade de oferecer ao mercado produtos com alto padrão de qualidade a preço competitivo.
We examine whether foreign national directors (FNDs) on US corporate boards help their firms mitigate the adverse effects of economic policy uncertainty (EPU) shocks originating from the directors' home countries. Using a comprehensive data set of US manufacturing firms' international supply chain relationships from 2003 to 2019, we find that EPU spikes in supplier countries lead to significant declines in aggregate US imports as well as in buyer firms' inventory purchases, sales, and market valuation. However, firms with FNDs from the affected countries are better able to mitigate these negative impacts. Cross‐sectional analyses reveal that the beneficial role of FNDs is more pronounced in firms with limited operational slack, greater difficulty accessing information about supplier countries, and higher financial constraints. Robust to a battery of sensitivity tests, our findings underscore the importance of FNDs on corporate boards during times of increased global uncertainty, especially for firms heavily reliant on foreign suppliers, and inform the debate on board diversity and supply chain resilience amid economic policy‐driven uncertainties.
Purpose
Global events revealed the vulnerability of global supply chain (SCs) and triggered the debate about how to improve supply chain resilience (SCRES). Industry 4.0 (I4.0) provides promising opportunities. However, there is still great uncertainty about its future implementation. Hence, this study aims to identify the potential of integrating I4.0 technologies to improve SCRES.
Design/methodology/approach
Based on current literature and grounded in the organizational information processing theory as a theoretical lens, 12 future-oriented projections on the implication of I4.0 on supply chain risk management (SCRM) were developed. A two-round Delphi study among 49 SC management experts from industry, academia and professional service companies was conducted to assess and discuss the projections regarding their expected probability of occurrence in 2035, their impact on SCRES and their desirability. A fuzzy c-means algorithm was applied to cluster the projections based on expert assessments.
Findings
Based on the experts’ assessments, three clusters of I4.0 influence on SCRES were identified. First, the study suggests that in 2035, companies will have integrated an SCRM perspective into their strategic decision-making and their daily operations. Second, companies strive for collaborative SCRM, based on I4.0-enhanced risk information sharing, but struggle with full implementation until 2035. Third, I4.0 technologies will support, but not replace, SC risk managers in making risk-related decisions in 2035.
Originality/value
Thus, this study addresses the necessity for future-oriented empirical research on I4.0-enhanced SCRM and analyzes how SCRES can be improved through the combination of cultural, personnel and strategic factors supported by I4.0 technologies in the long term.
This study explores the impact of COVID-19-related supply chain disruptions on manufacturing firms, focusing on external risks: demand, environmental, and supply. Our literature review reveals the general lack of comprehensive disruption plans and exposes the vulnerabilities in manufacturing firms with limited research addressing this issue. By adopting an interpretive research philosophy and a qualitative, inductive approach, our research delves into the operational challenges and adaptations implemented in the manufacturing sector during the pandemic through case studies. The findings reveal that COVID-19 significantly increased risks, causing demand surges, logistical disruptions, extended lead times, and labour shortages due to lockdowns, necessitating strategic shifts towards localised and digital supply chains in the manufacturing sector. Our study not only enriches the supply chain literature by detailing the pandemic’s effects and emphasising the need for robust disruption plans for enhanced resilience but also offers new insights into managing supply chain disruptions in crises, highlighting the necessity of strategic adaptations for future crisis preparedness across various industries.
Purpose
This study has been carried out in dairy product manufacturing industry of Northern India to judge the significance of supply chain strategies viz. cost reduction and optimization strategies toward performance improvement and mediator effect of strength and opportunity between strategies and performance parameters.
Design/methodology/approach
Questionnaire survey has been performed to justify their role toward performance improvement. Structural equation modeling, descriptive statistics, hierarchical regression and clusters and partial least square-structural equation modeling has been applied for ascertain the benefits occurred.
Findings
Results indicated that strength (success factors of strength identified from literature) is the significant mediator than opportunity (success factors) for enhancing performance of organization. Small incremental improvements and 5S activities are highly important cost reduction strategies for enhancing performance of supply chain strategies. Supply chain strategies significantly improve the quality of milk in the industry under study. The customer has got high-quality product after implementing supply chain strategies. Right-time delivery of product is only possible if failure modes are analyzed thoroughly. Reliability of performance parameters is 88% which signifies that high benefits are achieved by implementing cost reduction and cost optimization strategies of supply chain concept. Processing of milk is significantly improved after taking combined effect of processing and delivery of product.
Originality/value
This paper helps both academics and managers to gain a better understanding of this question by considering the role of supply chain strategies implementation practically through a standard procedure.
Supply chains across the world are getting more complex with every passing day. Due to globalization, companies are operating internationally, and so their operations have incorporated a plethora of areas. With great expansion comes great risks as well; therefore, today's supply chain faces great risks when operating on a global scale, and these risks hinder their performance. In this study, we explore the relationship of supply chain risk management, reaction time, and resilience with the performance of the organization and investigate in detail how a better strategy of supply chain risk management can lead to better performances and firms becoming resilient to disruptions and risks. This study is based on Pakistan's automobile sector, and the data was recorded from all the leading automobile industries in Pakistan. The research follows a quantitative model. One hundred questionnaires were filled out by people employed in automotive firms, and the data was analyzed using SPSS. Correlation analyses were performed to see how performance and supply chain risk management, along with other variables – resilience and reactive supply chain- were related to each other. Furthermore, a regression test was applied to understand the impact of structured supply chain risk management on a firm’s performance, and the results reveal that supply chain risk management does have a significant influence on the performance of a firm. Future work can be done in this same area by exploring more industries and firms, taking a bigger sample size, and exploring more categories of risks that influence the firms’ operations in their ways.
In a world increasingly shaped by global disruptions—ranging from pandemics and natural disasters to geopolitical tensions—the integration of sustainable logistics practices and supply chain resilience has become a cornerstone of modern supply chain strategies. This study undertakes a bibliometric analysis of 445 Scopus-indexed documents (2002–2024) using VOSviewer and Biblioshiny, offering a systematic exploration of critical research trends, thematic clusters, and knowledge gaps within this intersection. The analysis identifies several dominant themes, including green logistics, circular economy principles, digital transformation technologies, and adaptive risk management. Findings highlight the transformative role of digital tools—such as blockchain, IoT, and AI—in enhancing supply chain transparency, predictive analytics, and operational agility. The automotive sector emerges as a focal industry, facing unique challenges of resource dependency, regulatory compliance, and the need to align sustainability with resilience frameworks. Additionally, the study underscores the growing prominence of circular economy practices, such as reverse logistics and closed-loop supply chains, in addressing environmental goals while bolstering supply chain adaptability. However, significant gaps persist, particularly in the empirical validation of sustainable logistics practices and their measurable impact on resilience outcomes across diverse regions and sectors. The study calls for the development of integrated frameworks that align environmental sustainability with technological innovation and operational efficiency, supported by longitudinal studies and cross-industry comparisons. This research contributes to academic discourse by offering actionable insights for scholars and practitioners. It establishes a foundational roadmap for integrating sustainability and resilience, emphasizing the pivotal role of digitalization and circular economy principles in shaping robust, adaptable supply chains capable of withstanding the complexities of an increasingly volatile global environment.
This article investigates Brexit-induced consequences on supply chains and logistics – as well as potential solutions and strategies by carrying out a content analysis through a literature review, the first to our knowledge. Our findings reveal that Brexit-induced consequences for supply chains include increased customs duty rate, labour supply issues, increased costs related to expected delays, tariff and nontariff barriers, added complexity to guarantee food safety, authenticity or security, increased food prices, as well as low-skilled households carrying the
major load. Our findings regarding typical supply chain strategies or solutions for abovementioned Brexit-induced consequences include supply chain redesign, relocation of operations and markets, changing sourcing countries or regions, new information and communication technologies solutions such as traceability and blockchains, vertical and horizontal collaboration, resilience, better risk-recovery strategies, as well as the switch to ‘other’ metrics. Another result refers to the fact that we observe only a low level of theoretical grounding in (supply chain) risk management literature among the considered articles.
Keywords:
Brexit; logistics consequences; literature review; content analysis; supply chain risk management; resilience
The cattle livestock industry faces numerous challenges, particularly concerning the supply chain. This sector is complex and diverse, presenting positive and negative implications for the future of sustainable cattle production. This study assesses the supply chain risk factor to ensure the successful performance of cattle industry in Malaysia. Furthermore, this study provides a supply chain risk management framework model for cattle industry. This study analysed qualitatively based on in-depth interview process. The participants of this study were 14 individuals included farmer, breeders, butchers, importers, and quarantine centre provider. The findings indicated that logistic risks were comparatively less detrimental to enhancing the performance of the livestock industry. This study establishes a theoretical model for cattle supply chain risk management (CSCRM), and it suggests that cattle farmers and suppliers can successfully mitigate risks in the supply chain to achieve improved outcomes.
This chapter establishes the foundational concepts of Supply Chain Risk Management (SCRM), focusing on risks arising from natural disasters. It clarifies the distinctions between risk and uncertainty, emphasising their critical roles in supply chain disruptions. The chapter explores both upside and downside risks, integrating perspectives from decision theory and finance, while addressing the debate between objective and subjective risk assessments. Positioned within the broader field of Supply Chain Management, this chapter traces the evolution of SCRM from firm-level concerns to a holistic, supply chain-wide approach. By providing a detailed typology of supply chain risks and disruptions, it offers essential insights for understanding the impact of disasters on firm performance, setting the stage for deeper exploration in subsequent chapters.
We extend the existing framework for decomposition of production length structure in global value chains and propose a novel concept and measure of industrial chain risk exposure on both the demand‐side and supply‐side at the region‐sector level in China. Using data from WIOD, ADB‐MRIOT, and China's multi‐regional input‐output tables, we measure and analyze the industrial chain risk exposures, and risk‐return ratios on the demand‐side and supply‐side of each region‐sector in China from 2002 to 2017. Our results reveal the following key insights: First, inland regions exhibit high domestic industrial chain risk exposures, while coastal regions have high global industrial chain risk exposures, a pattern consistent at the region‐industry level. Furthermore, demand‐side industrial chain risk exposures surpass supply‐side exposures within region‐sectors. Second, High‐tech manufacturing industries display greater risk exposure compared to other sectors. Third, Guangdong and Shanghai, as the main regions of China's international trade, share similar global industrial chain risk exposures to those of Germany and South Korea. Fourth, the bilateral demand‐side exposures of the industrial chains in each region are asymmetric.
Understanding how SCRM works in the healthcare sector, especially in organ donation, is crucial. However, implementing strategies applicable to SCRM to identify and mitigate risks is a significant challenge across all industries. Nonetheless, the need to identify and mitigate risks in ODS (Organ Donation Supply Chains) is paramount and can bring greater control and efficiency to daily management in healthcare organizations, facilitating organ transplant processes. Mapping the state-of-the-art risk management initiatives for organ donation supply chains is essential. Therefore, this work aims to propose a bibliometric and qualitative analysis of risk management initiatives that cover the entire chain, considering combining factors that involve the supply chain as a whole, and not just logistical factors. As a result, the identification of the main methodologies and tools used for better risk management will be shown, along with the main barriers and facilitators, as well as positive and negative outcomes.
This article presents a decision support system model based on the analysis of risk factors of digital supply chain management in the country's steel industries and presents a decision support system (DSS) model based on the analysis of risk factors. At first, by reviewing the literature and using the exploratory factor analysis method, 37 risks were identified in 10 main categories including financial, environmental, organizational, supply, demand, process/production, suppliers, cyber/information system, market/price volatility risks. , and technology were classified. Then, by using interpretative structural equations, the relationships and mutual effects of these risks were analyzed. Since then, the purpose of a descriptive research and the method of collecting information from previous studies and articles, library studies and questionnaires have been used, and it is a survey, and the sample of the research is the managers and experts of the supply chain of the steel industry, who are fully familiar with the supply process and have at least 5-10 years of experience. They have a working history, and there are 170 of them. The proposed DSS model improves the ability to identify, evaluate, and manage risks and helps managers to make more optimal decisions in resource allocation and supply chain management with a more accurate analysis of risks. The research results show that this model can effectively reduce complications and increase efficiency in digital supply chain management. In the end, suggestions are given for implementing the model in other industries, applying more advanced technologies, and conducting further studies to improve and develop the model. This research can be used as a practical guide for managers and researchers in the field of risk management in the digital supply chain.
This study examines how e-business experience and organizational roles impact on the perception of dependency risks including external service provider risks, legal and compliance risks, and security risks among SMEs. Thus, the first research objective is to examine how and to what extent general and specific e-business experience influence the perceived risks and their priorities. In the present research, a mixed research approach and Kruskal-Wallis test were adopted to compare the risk perception of the respondents. We dissect the findings further by applying qualitative analysis on the impressions shared by the respondents. The findings show that e-business experience has direct effects on risk perception and the firms with less e-business experience perceive dependency risks as more severe, especially in terms of website developer, hardware, and software dependencies. On the other hand, larger and more experienced SMEs consider legal and compliance risks as more important especially where the cross-border transactions and data privacy issues are involved. Moreover, IT staff showed better appreciation of the reputational and employee risk factors more than the non-IT staff showing that technical knowledge is key to risk perception. Based on these results, this study posits that as SMEs gain e-business experience, their risk perceptions change and so do their understanding of external vulnerabilities and regulations.
Purpose: This study aims to shape the future trajectory of scholarly research on traditional, reputational and societal supply chain risks and their management.
Design/methodology/approach: The research employs a narrative literature review of the overview type. In order to control bias stemming from the subjectivity of our methodology, we synthesized the relevant literature transparently and established various safeguarding procedures.
Findings: The established research stream on traditional supply chain risk has generated a wealth of concepts that can potentially be transferred to the study of reputational and societal risks. The maturing research stream on reputational risks has mostly focused on risk manifestation, from the upstream perspective of the focal firm. The emerging scholarship on societal supply chain risks has anecdotally highlighted detrimental effects on contextual actors, such as society-at-large.
Research limitations/implications: The study shifts scholarly attention to the role of the context in the risk manifestation process-as a potential risk source for traditional supply chain risk, during the risk materialization for reputational supply chain risk, and as the locus of the risk effect for societal supply chain risk.
Originality: This review is unique in that it fosters a holistic understanding of supply chain risk and underscores the increased importance of the context for it. The socioeconomic , institutional and ecological contexts connect the three reviewed research streams. Detailed research agendas for each literature stream are developed, comprising 23 topical areas in total.
This research asserts that the integration of artificial intelligence (AI) empowers small and medium enterprises (SMEs) to adapt dynamically to unpredictable conditions within supply chains (SCs), reducing the potential financial burden associated with decision-making. Grounded in a resource-based perspective, the study explores the influence of Artificial Intelligence on Supply Chain risk management for small and medium enterprises. A conceptual framework encompassing AI-driven risk management Supply Chain re-engineering capabilities, and supply chain agility (SCA), was formulated and validated using data gathered from SME different levels of managers. The primary methodological approach employed is multiple regression. The findings reveal that the utilization of AI for risk management has a consequential impact on both SC re-engineering capabilities and agility. Furthermore, re-engineering capabilities not only influence but also moderate agility. In the current landscape characterized by heightened demand uncertainties in supply chains, managers face the challenge of making intricate decisions necessitating significant resources within constrained time frames. AI offers the ability to model diverse scenarios, addressing critical questions that traditional infrastructures struggle to handle. This research amalgamates a multiple-construct notion of agility and delineates non-linear interaction within the conceptual framework.
This research explores that status of supply chain risk management (SCRM) in manufacturing small and medium enterprise (SMEs) in South Africa. This is accomplished through the development of a conceptual framework based on the extant literature on SCRM, risk and risk management in SMEs and risk theory. The framework is tested through a mixed-method multiple case study design in eight South African manufacturing SMEs of different sizes in the furniture and metal industries in Gauteng, South Africa. This approach addresses theoretical gaps relating to the lack of frameworks that develop and present a holistic approach to better understand how supply chain risk is managed in SMEs, as well as, methodological gaps where there is a call for more case study based empirical studies on SCRM, and in particular in SMEs.
A significant finding of this research is that while SME owner-managers do not have formal risk management procedures like their counterparts in large organisations, they informally follow risk management processes advocated in the literature, namely, the risk identification, risk analysis and risk handling aspects of the formal process. This finding, supported by the evidence, is significant as the literature has been ambivalent. Hence, this research is ground-breaking as it provides for a strong position on this debate. These implicit processes make use of environmental scanning for ongoing risk identification, risk analysis and risk handling is exhibited in the owner-manager’s conversations and actions regarding risk to and in the business. Prevention and mitigation are the most common risk handling modes employed by SME owner-manager and are based on the experience; knowledge and intuition of owner-managers.
This research contributes through another important finding in that SMEs possess risk management capabilities. Risk management capability is demonstrated by the OMs in this research through their capability to leverage resources and use them effectively in preventing and/or mitigating risk. This research, hence, augments Lindbom et al.’s (2015) theoretical proposition of risk management capability by providing empirical evidence that tests and supports the proposition.
Further key findings of this research are that supply chain risks are not the most prevalent risks in manufacturing SMEs in South Africa. Risks within the company operational environment, such as, financial, strategic and operations risks, take precedence. Supply chain risks on the demand side receive more focus than those on the supply side
Supply chain management has become more complex due to recent disruptions in business ecosystems. With these disruptions, supply chains now face a greater number of risk sources, particularly with the adoption of sustainability measures. Thus, this chapter aims to deepen the understanding of risk management practices within sustainable supply chain management. Resource orchestration theory is utilized as a theoretical lens to conceptualize risk management practices in sustainable supply chains through dynamic and relational capabilities. Theory synthesis and an integrative review are employed for the conceptualization in the chapter. The findings and discussion demonstrate that the resource orchestration perspective can guide managers and researchers in developing capabilities to understand and address challenges related to risks within sustainable supply chain management. If these capabilities are properly orchestrated by managers in a sustainable supply chain, they enable organizations to survive in a rapidly changing environment.
In times of prolonged economic doldrums across the globe, multinational firms (MNFs) offshoring blunders can undermine their competitiveness in the marketplace. To help the MNF formulate a more resilient offshoring strategy and identify the most desirable offshoring destination, this article aims to identify dynamic risk factors that significantly hinder the efficiency of offshoring and then measure specific offshoring risks over time using two different versions of data envelopment analysis (DEA) models and Malmquist productivity index (MPI). After assessing the degree of risk resiliency of the offshoring host countries over extended periods and then conducting Tobit regression analysis to identify key factors that significantly influence offshoring risks, we found that the host country's logistics efficiency (i.e., logistics performance index [LPI]) and domestic market size were critical indicators of offshoring success in that country. Since low‐cost sourcing countries (LCCs) tend to have relatively low LPIs and smaller domestic market sizes, they are not attractive offshoring destinations. This finding defies conventional wisdom. This article is one of the first longitudinal studies to assess the comprehensive risk resilience of 87 different offshoring destinations (countries) during multiple periods (6‐year span).
Relief organisations face significant logistical challenges in the aftermath of natural disasters, characterised by volatile environments. Effective risk management in these contexts hinges on the identification, evaluation, and mitigation of potential risk events. This study addresses this critical need by aiming to identify and prioritise the most critical strategies to improve resilience. To achieve this, a novel framework, the Fuzzy Analytical Hierarchy Process - A fuzzy Technique for Order Performance by Similarity to Ideal Solution (FAHP-FTOPSIS), is proposed. An empirical application demonstrates that this framework effectively and systematically prioritises strategies for mitigating risks. This study examined existing mitigation strategies and identified eight that are particularly significant. Among these, collaboration and coordination, flexible transportation capabilities, and flexible supply bases emerged as the three most critical mitigation strategies for emergency supply chains. This finding emphasises the importance of prioritising these critical strategies in the development of strategic emergency supply chain plans. The practical implementation of these strategies, substantiated by empirical data from credible sources, would significantly enhance the preparedness of stakeholders and relief actors. This translates to a proactive ability to anticipate and respond to potential risk factors, ultimately leading to a more effective response to natural disasters.
A poultry slaughterhouse has a strategic role in the broiler supply chain because they determine the quality of carcass products sent to the processing industry and consumers. Slaughterhouses also act as a buffer when there is an oversupply of live birds due to the uncertainty of the production sector and the consumer market by functioning as cool storage. The series of activities to transform harvesting live birds became fresh and frozen carcasses have various risks that lead to product quality degradation and financial loss. This study aims to identify and assess the risk events and risk agents along the supply chain and then provide mitigation actions against potential risk causes to minimize the impact of losses and the frequency of risk occurring. The House of Risk (HoR) method is used because it can help identify and assess risks in each activity according to the stages of the business process. The HoR method itself combines Quality Function Deployment (QFD) with FMEA (Failure Mode Effect Analysis). This study tries to use HoR with a sequence of activities arranged according to the SCOR (Supply Chain Operation Reference) stage. HoR stage I found 26 risk events, 52 risk agents, and 12 of them are potential risk agents. The 3 highest risk agents are product mishandling, insufficient manpower, and engine breakdown. HoR phase II proposes 28 risk mitigation actions and obtained 8 selected mitigation actions that consider the difficulty level of implementation, and the company's ability both in terms of costs and human resources. The recommendations given are implementing reward and punishment, training and briefings for workers, and carrying out periodic maintenance for machines.
Purpose
This study builds on the panarchy theory by viewing the supply chain as a socio-ecological system and further expands it by considering the within-level linkages internal to the supply chain level. Three types of linkages are considered: the two cross-level linkages with the planetary and the political-economic levels and the supply chain within-level linkages. The research questions are addressed using the data gathered by the Carbon Disclosure Project within its Supply Chain Programme.
Design/methodology/approach
This work aims to study, applying the lens of panarchy theory, how the planetary and the political-economic levels affect the supply chain within-level linkages for sustainability. Furthermore, the difference in how these cross-level linkages influence focal firms and first-tier suppliers is explored.
Findings
The results show that considering the planetary-supply chain linkage, climate change risk exposure is likelier to foster within-level linkages with buyers than with suppliers. Further, climate change mitigation investments have different roles in the different tiers: focal firms are pushed to strengthen the linkages with their suppliers when they lose efficacy in improving their carbon performance, whereas first-tier suppliers exploit investments to gain legitimacy. Discussing the political-economic level effect, perceptions from first-tier suppliers could be two-fold: they could perceive a mandating power mechanism or exploit policymakers’ knowledge to advance their capabilities.
Originality/value
The results contribute to the sustainable supply chain management literature by providing empirical evidence of the cross-level linkages theorised by the panarchy theory. Moreover, the concept of within-level linkages is proposed to apply the theory in this field.
Purpose
Management and risk techniques within industries have been studied from various disciplines in nondefense-affiliated industries. Given the assumption that these techniques, strategies and mitigations used in one industry apply to other similar industries, this paper examines the defense industry for risk assessment. We characterize interactions for onward application to risk identification in the defense industry.
Design/methodology/approach
This research employs a systems theory approach to the characterization of industry interactions, using three dimensions including environment, boundaries and relationships. It develops a framework for identifying relationship types within system-of-systems (SoS) environments by analyzing the features of interactions that occur in such environments.
Findings
The study’s findings show that different systems environments within the defense industry SoS exhibit different interaction characteristics and hence display different relationship patterns, which can indicate potential vulnerabilities.
Research limitations/implications
By employing interaction as a means for evaluating potential risks, this research emphasizes the role played by relationship factors in reducing perceived risks and simultaneously increasing trust.
Originality/value
This paper intends to develop an initial snapshot of the relationship status of the Swedish defense industry in light of the global consolidation in this industry, which is a relevant contextual contribution.
This chapter presents a comprehensive longitudinal study examining the profound influence of the COVID-19 pandemic on the global mobile workforce, with a specific focus on expatriates and their families. The research spans the initial reactions in the spring of 2020, followed by subsequent assessments at six months and one year later. By adopting a longitudinal approach, the study captures the evolving perspectives and real-life encounters of expatriates, shedding light on the multifaceted challenges and opportunities arising from the pandemic. The findings reveal not only immediate disruptions but also profound shifts in motivation, priorities, and the emergence of expatriates' critical individual skill set, termed “C-skills,” and organizational competencies essential for resilience in the post-pandemic world.
Die Resilienz eines Lieferanten ist ein elementarer Faktor in der Gestaltung von Lieferketten. In der Lieferantenauswahl wird die Resilienz noch nicht vollumfänglich im Bewertungsprozess berücksichtigt. Im Rahmen eines Forschungsprojekts soll hierfür eine Grundlage geschaffen und damit die Resilienz als Bewertungskriterium in den Prozess der Lieferantenauswahl integriert werden. Der Beitrag soll dabei ein Verständnis über die unterschiedlichen Erfolgsfaktoren resilienter Lieferketten schaffen.
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.
This article introduces a Supply Chain Risk Management (SCMR) model aiming to develop a raw material sourcing methodology to define material flow management policies under hybrid Make to Order (MTO) and Make to Stock (MTS) scenarios, which consider the analysis of risks and operational costs of supplying products with short shelf life. This model identifies and measures risks according to inventory positioning criteria, using a System Dynamics (SD) model that varies demand and production levels in value-adjusted contexts. The model shows that a hybrid methodology decreases operating costs and improves the service level indicator. The main contribution of the proposed methodology is the assessment of different configurations to establish the inventory positioning point in particular conditions of the planning and logistics processes in a CS. The methodology was assessed in a Colombian company offoodproducts with short-term shelf life.
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.
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.
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.
Practitioners and educators have variously addressed the concept of supply chain management (SCM) as an extension of logistics, the same as logistics, or as an all-encompassing approach to business integration. Based on a review of the literature and management practice, it is clear that there is a need for some level of coordination of activities and processes within and between organizations in the supply chain that extends beyond logistics. We believe that this is what should be called SCM. This article proposes a conceptual model that provides guidance for future supply chain decision-making and research.
SCM is one of the hottest topics in manufacturing and distribution, and like JIT and TQC it requires a corporate commitment. This book provides both fundamental principles of SCM as well as a set of guidelines to assist in practical application of SCM. It will be one of the first books on the market that deals exclusively with SCM and its application. Readers in the academic, management sciences, sales, marketing and government environments will find this book of particular interest.
New ways are needed to manage supplier chains effectively. Here, the instrument of a ‘limited life company’ is suggested. It seems to have several benefits.
The reported research examined the usefulness of placing risk propensity and risk perception in a more central role in models of risky decision making than has been done previously, Specifically, this article reports on two studies that examined a model in which risk propensity and risk perception mediate the effects of problem framing and outcome history on risky decision-making behavior, Implications of the pattern of results for future research are discussed.
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.
Supplier diversification and backup sourcing offer alternatives to stockpiling inventory as a means of mitigating disruption risks. In this chapter, we introduce some simple models to analyze and explore the performance of these sourcing strategies. The effectiveness of diversification depends largely on the number of suppliers, the possibility of disruption correlation, and the available spare capacity at suppliers. Most of the benefits are achieved with a small number of suppliers. The effectiveness of backup sourcing depends largely on the cost and availability of the backup source, with availability being measured as response time and capacity provided. When choosing the appropriate strategy, managers need to account for all the significant factors that influence performance, including the disruption profile, inventory costs, the fixed and variable supplier costs, capacities, response times, and disruption correlation. Crafting the best strategy relies on sound judgment aligned with suitable analysis.
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.
Focuses on the failure of companies to align supply chain processes with corporate strategic goals. Presents results of research sponsored by Ernst & Young LLP and Stevens Institute of Technology in which supply chain executives were surveyed to determine which specific corporate strategies are aligned with supply chain practices. Only one business strategy – responsiveness – scored consistently high among the majority of respondents. Reduced time-to-market, low cost, high quality, and lowest total delivered cost also scored fairly high. The remaining strategies – profitable growth, increased market share, innovation, increased revenues, and working capital efficiency – scored less well. Conclusions for managers are drawn from these results.
The concept and importance of supply chain management (SCM) has been introduced and described at length in the literature. Several mostly conceptual definitions of SCM were found. To classify these multiple definitions and extend SCM to include a process orientation a conceptual model of SCM evolution was developed. This research proposes that SCM is an evolving concept with individual firms at different stages in their adoption of the concept. In its most advanced form SCM is not a subset of logistics but is a broad strategy which cuts across business processes both within the firm and through the channels required to reach the customer and involves the firm's suppliers. Thus SCM as a concept is organization-wide; not logistics-specific. An exploratory study of purchasing professionals was performed and it was determined that their definitions of SCM focused on developing relations with suppliers including partnerships. SCM provided purchasers multiple benefits including improved supplier coordination. This improved coordination resulted in greater commitment to long-term supplier relations, with a focus on reducing cost to the buying organization.
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.
This research explores the linkage between firms' outsourcing activities and the occurrence of supply chain disruptions. It is based upon a two-phase process utilizing methodological triangulation. Phase one applies qualitative methods that explore the overall environment of outsourcing and disruptions in supply chains in the automotive industry based upon a case study of a Swedish car manufacturer. Phase two applies quantitative methods to test the findings from phase one in a wider context in the automotive industry. The results indicate that there is a significant association between the outsourcing of internal activities and the occurrence of disruptions in firms' inbound logistics flows from subcontractors.
A significant feature of business management in the 1990s has been the practice of outsourcing. Firms and public sector bodies have reconsidered where the boundary of their organisation should be set, and passed to third parties responsibility for many business activities. However, many firms have been disappointed with the results they have achieved from outsourcing, not least when it has concerned high profile functions such as information technology. Part of the reason for this disappointment, it is argued, lies in the methodologies (or lack of them) which have been employed by managers. Very few have taken into account the main risks of the practice or identified the required safeguards. This article seeks to address these shortcomings by presenting a model for effective risk management. The article also provides a case study – outsourcing at Hewlett-Packard – which shows what can be achieved if managers use the right criteria for their decisions.
A conceptual framework for the analysis of vulnerability in supply chains is developed. The conceptual framework is limited to the inbound logistic flow of manufacturers. The study has been performed as a two-step process. Step one explores the concept of vulnerability from the point of view of an inductive approach. The conceptual framework is generated and based on the empirical findings from a case study of a Swedish car manufacturer in the automotive industry. Step two is deductive in terms of testing in other industries the generated conceptual framework that originates from step one. The conceptual framework consists of two dimensions, namely categories of disturbance and sources of disturbance. Principally, categories of disturbance are divided into quantitative and qualitative disturbances. Sources of disturbance are divided into atomistic (direct) and holistic (indirect) disturbances. In addition, the specific criteria of an inbound logistic flow indicate how vulnerability in supply chains is proposed to be analysed according to the developed conceptual framework of vulnerability.
Purchasing organizations use various strategies and techniques to minimize the chance and impact of detrimental events occurring in the supply base. Supply risk assessments are a necessary first step in managing those risks. An analysis of in-depth interviews with purchasing professionals from nine companies indicates that purchasing organizations often create contingency plans, and implement process-improvement and buffer strategies in response to perceived supply risks discovered in assessments. Even though risk assessments, contingency plans, and risk management efforts are generally acknowledged as being important, many of those interviewed believed that there was not enough done in their organizations to mitigate supply-related risks.
Intense global competition has created a highly demanding customer.
To serve his needs for highvariety, low cost, sound quality and easy
availability, organisations are looking beyond their own boundaries to
the management of their supply chains. In this they have been inspired
by the typical Far Eastern, and the very best Western, practice. But
supply chain management is still a hope not a reality for many
companies. On the one hand there is an array of “panaceas”
on offer for our “sick” businesses; new technology, computer
integrated manufacturing, the Just-in-Time approach, total quality
management, and more besides. On the other hand supply chain management
has few specific tools of its own. To the manager busy holding on to his
market share it is difficult to see where to start the process of making
his operation more competitive. A three-stage approach to help companies
see just which actions are likely to get the supply chain into better
competitive shape is proposed. Also introduced are two simple graphical
tools to help management develop a strategy for enhanced supply chain
effectiveness: the pipeline map and the supplier relationship grid.
Decision-making studies incorporating risk have typically used risk measures that are generic across industries. Responding to calls for finer-grained approaches, a recent study used a qualitative approach to discover how managers interpret risk in different industry contexts. Managers from the oil and gas (61), commercial banking (66), and software development (28) sectors were asked an open-ended question about their conceptualizations of risk in the context of regularly encountered business situations. Resulting textual data were analyzed using QSR NUD*IST. Industry group membership and risk interpretations were found to be significantly related in that the different industry groups showed different distributions of attention to various aspects of risk. For researchers, these findings suggest the need to use differentiated risk measures. For practitioners, the findings suggest potential benefits from broadening cognitions relating to risk.
IN BRIEF
Proactive supply management is a frequently used phrase, yet no agreement exists about its precise meaning. This article argues that proactive purchasing management is risk management, a perspective that evolved from case studies of the purchasing function. To better understand risk management from the perspective of purchasing management, it is analyzed within the context of transaction cost theory and the resource dependency model. Evidence is provided from the case studies that risk management is an appropriate framework for understanding proactive purchasing management. Examples of risk management through proactive purchasing activities are presented.
Resource-based and risk-based views of strategic alliances have not been adequately reflected in the literature. This paper identifies four types of critical resources that the partners bring to an alliance: financial, technological, physical, and managerial resource. It also suggests two basic types of risk in strategic alliances: relational risk and performance risk. The alliance making process is examined in terms of the interactive effects of resource and risk on the orientations and objectives of the prospective alliance partners. Managerial implications are discussed and future research directions indicated in the form of propositions for empirical testing.
The problems associated with transparency in supply relationships — the two-way exchange of information and knowledge between customer and supplier — represent chronic difficulty for managers. The sensitivity of such exchanges appears to interfere with — even to negate — their effectiveness and value. This may be because of insufficient consideration of types of transparency and a propensity for customer domination in the relationship. This research is aimed at exploring these difficulties in order to understand the dynamics and varying nature of transparency in this context (including a proposed state of value transparency) and to suggest ways in which it might be approached in practice. In addition to the social and technology-led drivers identified for transparency, the research approach to the concept in supply has been driven by the observation that many of the traditional routines and activities occurring between industrial or commercial purchasers and their suppliers can be unnecessary and wasteful. This article presents the background to this hypothesis and records the development of a framework for discussion of the concept.
Managing supply risk is an essential element of the overall supply management task. As the complexity of risk management has increased, responsiveness seems dominated by varying the level of inventory and using multiple supply sources as means of creating buffers. This research uses the framework of agency theory in managing supplier behaviors as a means to reduce supply risk and the impact of detrimental events. Empirical results indicate that purchasing organizations address various sources of supply risk by implementing management techniques that reduce the likelihood that detrimental events will occur. Firm size, purchases as a percentage of sales, and industry characteristics were also found to influence the manner in which supplier behaviors are managed.
There has been a growing emphasis in business on outsourcing production activities and focusing on core competencies. The decision to outsource the production of goods and services, however, has inherent risk. The purposes of this article are to describe characteristics of inbound supply that affect managerial perceptions of supply risk and to create a classification of those supply risk sources. An analysis of case study data suggests that supply risk is perceived by the effect that purchased items and services have on corporate profitability, market factors, and supplier characteristics. By understanding the characteristics of supply risk, supply management professionals can implement strategies for better managing that risk.
This paper explores the relation between decision theoretic conceptions of risk and the conceptions held by executives. It considers recent studies of risk attitudes and behavior among managers against the background of conceptions of risk derived from theories of choice. We conclude that managers take risks and exhibit risk preferences, but the processes that generate those observables are somewhat removed from the classical processes of choosing from among alternative actions in terms of the mean (expected value) and variance (risk) of the probability distributions over possible outcomes. We identify three major ways in which the conceptions of risk and risk taking held by these managers lead to orientations to risk that are different from what might be expected from a decision theory perspective: Managers are quite insensitive to estimates of the probabilities of possible outcomes; their decisions are particularly affected by the way their attention is focused on critical performance targets; and they make a sharp distinction between taking risks and gambling. These differences, along with closely related observations drawn from other studies of individual and organizational choice, indicate that the behavioral phenomenon of risk taking in organizational settings will be imperfectly understood within a classical conception of risk.
Increasing product/service complexity, outsourcing and globalisation have led to increasingly complex, dynamic supply networks. This has impacted on risk, changing it and changing its location in supply networks. This paper provides a review of definitions and classifications of types of risk; an holistic view of risk assessment and management is taken here. Little evidence is apparent of empirical research on risk in supply networks or tools to help identify, assess and manage that risk. A tool is provided and its testing and development in four case studies in the electronics sector is described. Experiences of using the tool are discussed and conclusions drawn on its potential further development and application.
All purchasing organizations encounter supply risk, whether it is explicitly understood and assessed, or reactively managed. The purpose of this paper is to provide a grounded definition of supply risk. Case study data from seven purchasing organizations uncovered various definitions of supply risk. These definitions focus on the sources of supply risk, emanating from individual supplier factors and market characteristics, and the outcomes of supply risk events, which involve the inability of purchasing firms to meet customer requirements and threats to customer life and safety. Findings from this research provide practitioners and academicians a starting point for understanding supply risk and insights as to how supply risk can negatively affect business operations.
In boom times, it is easy for managers to forget about risk. And not just financial risk, but organizational and operational risk as well. Now there's the risk exposure calculator, a new tool that will help managers determine exactly where and how much internal risk is mounting in their companies. The risk calculator is divided into three parts: The first set of "keys" alerts managers to the pressures that come from growth. Now that the company has taken off, are employees feeling increased pressure to perform? Is the company's infrastructure becoming overloaded? And are more new employees coming on board as the company rushes to fill positions? If the answer is yes to any one of those questions, then risk may be rising to dangerous levels. The second set of keys on the calculator highlights pressures that arise from corporate culture. Are too many rewards being given for entrepreneurial risk taking? Are executives becoming so resistant to bad news that no one feels comfortable alerting them to problems? And is the company's level of internal competition so high that employees see promotion as a zero-sum game? The final set of pressures, the author says, revolves around information management. When calculating these pressures, managers should ask themselves, what was the company's complexity, volume, and velocity of information a year ago? Have they risen? By how much? How much of the time am I doing the work that a computer system should be doing? High pressure on many or all of these points should set off alarm bells for managers. To control risk, managers have four levers of control at their disposal that will show them where they need to make organizational adjustments.
World-class supply management organizations like Honda of America, John Deere, Chrysler, Hewlett Packard, and Motorola all understand the power of continuous improvement in the supply base. The best supplier management and development programs help suppliers--on a long-term basis--develop their own strength and expertise in suggestion systems, new product development, and high quality production results.
Treatments of risk in the international management literature largely focus on particular uncertainties to the exclusion of other interrelated uncertainties. This paper develops a framework for categorizing the uncertainties faced by firms operating internationally and outlines both financial and strategic corporate risk management responses.© 1992 JIBS. Journal of International Business Studies (1992) 23, 311–331
We develop a new version of prospect theory that employs cumulative rather than separable decision weights and extends the theory in several respects. This version, called cumulative prospect theory, applies to uncertain as well as to risky prospects with any number of outcomes, and it allows different weighting functions for gains and for losses. Two principles, diminishing sensitivity and loss aversion, are invoked to explain the characteristic curvature of the value function and the weighting functions. A review of the experimental evidence and the results of a new experiment confirm a distinctive fourfold pattern of risk: risk aversion for gains and risk seeking for losses of high probability; risk seeking for gains and risk aversion for losses of low probability. Copyright 1992 by Kluwer Academic Publishers
Analysis of decision making under risk has been dominated by expected utility theory, which generally accounts for people's actions. Presents a critique of expected utility theory as a descriptive model of decision making under risk, and argues that common forms of utility theory are not adequate, and proposes an alternative theory of choice under risk called prospect theory. In expected utility theory, utilities of outcomes are weighted by their probabilities. Considers results of responses to various hypothetical decision situations under risk and shows results that violate the tenets of expected utility theory. People overweight outcomes considered certain, relative to outcomes that are merely probable, a situation called the "certainty effect." This effect contributes to risk aversion in choices involving sure gains, and to risk seeking in choices involving sure losses. In choices where gains are replaced by losses, the pattern is called the "reflection effect." People discard components shared by all prospects under consideration, a tendency called the "isolation effect." Also shows that in choice situations, preferences may be altered by different representations of probabilities. Develops an alternative theory of individual decision making under risk, called prospect theory, developed for simple prospects with monetary outcomes and stated probabilities, in which value is given to gains and losses (i.e., changes in wealth or welfare) rather than to final assets, and probabilities are replaced by decision weights. The theory has two phases. The editing phase organizes and reformulates the options to simplify later evaluation and choice. The edited prospects are evaluated and the highest value prospect chosen. Discusses and models this theory, and offers directions for extending prospect theory are offered. (TNM)
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Supply Chain Vulnerability, Department for Transport
- M Christopher
Supply-side contingency planning
- G Gilbert
- M Gips