Conceptual Framework of Supply Chain Safety

In today’s world, companies cannot afford to act on their own. According to a study conducted by AMR Research in 2006 the average company has 36 contract manufacturers. Out of this, 42 % of these companies report that more than 25 % of manufacturing output is produced by third-party contract manufacturers. Thus, it is evident from the study that outsourcing-related activities (predominantly concerning the functional areas of information technology, production, and logistics) not only result in a higher number of companies involved in the supply chain – this in turn explains the fact that the length and the depth of a supply chain have increased manifold. In addition, companies manage today more than five different supply chains because of the requirement to produce multiple products for multiple markets – supply chains can thus be characterized as networks. By consequence, companies experience a stronger mutual dependence on each other – the whole supply chain becomes more vulnerable to disruptions.