19. Risk and Uncertainty Management for Sustainable Supply Chains

Supply chains are the backbone of the global economy as well as a major influence on the social and natural business environment (van der Vegt et al. 2015). In today’s globalized world, every organization is part of at least one supply chain. Furthermore, the majority of everyday transactions - withdrawing money, eating in a restaurant, shopping for food or clothes, ordering something online - involves participation in a supply chain. As such, supply chains are the channels via which resources, services, and information flow from the originating supplier to the end user. A company’s relationships across their supply chains combined with increasing globalization have facilitated worldwide operations, better communication, and the ability to integrate enlarged product variety and greater consumer choice. Simultaneously, the emergence of longer and more complex supply chains and relationships, shorter product lifecycles, increased competitive pressure, and environmental uncertainty (Mentzer et al. 2001) have exposed every business to the risk of unexpected disturbances that can lead to financial losses and in some cases firm closures (Skipper and Hanna 2009). Our world is increasingly uncertain (Tang 2006) and our supply chains more vulnerable than ever (Wagner and Bode 2008).