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2019 | Buch

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Revisiting Supply Chain Risk

herausgegeben von: George A. Zsidisin, Michael Henke

Verlag: Springer International Publishing

Buchreihe : Springer Series in Supply Chain Management

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book offers a bridge between our current understanding of supply chain risk in practice and theory, and the monumental shifts caused by the emergence of the fourth industrial revolution. Supply chain risk and its management have experienced significant attention in scholarship and practice over the past twenty years. Our understanding of supply chain risk and its many facets, such as uncertainty and vulnerability, has expanded beyond utilizing approaches such as deploying inventory to buffer the initial effects of disruptions. Even with our increased knowledge of supply chain risk, being in the era of lean supply chain practices, digitally managed global supply chains, and closely interconnected networks, firms are exposed as ever to supply chain uncertainties that can damage, or even destroy, their ability to compete in the marketplace. The book acknowledges the criticality of big data analytics in Supply Chain Risk Management (SCRM) processes and provides appropriate tools and approaches for creating robust SCRM processes. Revisiting Supply Chain Risk presents a state-of-the-art look at SCRM through current research and philosophical thought. It is divided into six sections that highlight established themes, as well as provide new insights to developing areas of inquiry and contexts on the topic. Section 1 examines the first step in managing supply chain risk, risk assessment. The chapters in Section 2 encompass resiliency in supply chains, while Section 3 looks at relational and behavioral perspectives from varying units of analysis including consortiums, teams and decision makers. Section 4 focuses on examining supply chain risk in the contexts of sustainability and innovation. Section 5 provides insight on emerging typologies and taxonomies for classifying supply chain risk. The book concludes with Section 6, featuring illustrative case studies as real-world examples in assessing and managing supply chain risk.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Research in Supply Chain Risk: Historical Roots and Future Perspectives

Abstract

Risk has always existed in business and networks—well before the terms supply chain and supply chain management became part of our lexicon. However, our understanding of supply chain risk only started to coalesce approximately twenty years ago. The purpose of this chapter is to highlight how "Revisiting Supply Chain Risk" serves as a bridge between our current knowledge of supply chain risk to where we believe the discipline will evolve.

George A. Zsidisin, Michael Henke

Assessing Supply Chain Risk—The First Step in Managing Supply Chain Risk

Frontmatter

Chapter 2. Assessing the Vulnerability of Supply Chains: Advances from Engineering Systems

Abstract

Vulnerability assessments focus on extended sets of hazards and threats, and seek to ensure that adequate resources exist to restore system functionality to a stable level within a reasonable amount of time. Multiple frameworks for vulnerability assessments in supply chains report on tools that can support this analysis. The purpose of this chapter is to inform supply chain researchers and practitioners of emerging trends and advances from engineering design that can benefit supply chain risk management, and set these in the context of a previously published methodology (Asbjørnslett 2009) for vulnerability assessment in the supply chain.

Specific advances that will be addressed include:

Epoch-era analysis for structuring event taxonomies and scenarios.
Failure mode thinking for low-frequency, high-impact (LFHI) events.
Design structure matrices and axiomatic design principles for function–form mapping in the supply chain as a tool for ensuring adequate levels of redundancy, flexibility, and identification of latent functionality.

Sigurd S. Pettersen, Bjørn Egil Asbjørnslett

Chapter 3. Using Scenario Planning to Supplement Supply Chain Risk Assessments

Abstract

A fundamental component of supply chain risk management is the process of assessing risk in order to make decisions about how to best manage it. In assessing risk, analysts and leaders commonly focus on their near-term environments, overlooking key indicators that might evolve into significant future risks. We propose the use of scenario planning as a supplement to traditional supply chain risk assessment paradigms and practices, and we describe the scenario planning process within the context of supply chain risk management. This chapter does not propose a panacea for the challenges associated with supply chain risk management; rather, it proposes a method of raising and enhancing the level of risk awareness among decision-makers who attempt to manage it.

Cliff Thomas, Thomas Chermack

Chapter 4. Decision Support Systems and Artificial Intelligence in Supply Chain Risk Management

Abstract

This chapter considers the importance of decision support systems for supply chain risk management (SCRM). The first part provides an overview of the different operations research techniques and methodologies for decision making for managing risks, focusing on multiple-criteria decision analysis methods and mathematical programming. The second part is devoted to artificial intelligence (AI) techniques which have been applied in the SCRM domain to analyse data and make decisions regarding possible risks. These include Petri nets, multi-agent systems, automated reasoning and machine learning. The chapter concludes with a discussion of potential ways in which future decision support systems for SCRM can benefit from recent advances in AI research.

George Baryannis, Samir Dani, Sahar Validi, Grigoris Antoniou

Chapter 5. Resilience Assessment in Complex Supply Networks

Abstract

Resilience has been widely used as one of the core elements to deal with and to respond to major disruptions. Therefore, building resilient supply networks has become an important issue for managers, stakeholders, and researchers. However, the complexity arises when large numbers of companies are networked together to achieve some collaborative advantage. The combination of large-scale interdependencies and unpredictable behavior creates new challenges for managing risk. Different actors make decisions at different times and consequently with different sets of information guiding them. The network resilience results from the interaction of all network components. The presence of interdependence between nodes in different networks makes the resilience assessment more difficult, since the failure of nodes in one network may cause a disruption at its dependent node in another network. Traditional theories and approaches do not fully address the technical and managerial challenges of today’s supply chains. Hence, one challenge faced by researchers is how to assess the resilience. The main objective of this chapter is to define and formalize a method for a holistic resilience assessment in complex supply networks.

Mustafa Güller, Michael Henke

Creating Resiliency by Managing Supply Chain Risk

Frontmatter

Chapter 6. What Value for Whom in Risk Management?—A Multi-value Perspective on Risk Management in an Engineering Project Supply Chain

Abstract

When supply-chain risk management (SCRM) is implemented as a highly formalized, compliance-driven activity, it easily ends up disconnected from the actual value creation and value perspectives of the relevant stakeholders. SCRM is embedded in a complex stakeholder landscape, and as a consequence, the value of SCRM is perceived differently by different stakeholders. We argue that when employing a value-based approach, risk management can be tailored to specific stakeholder needs at each step in the supply chain, while maintaining coherence with the overall objectives of the supply chain. Based on a combination of case studies carried out over 1 year in engineer-to-order project environments and arguments from literature, this chapter presents a conceptual model for developing supply-chain risk management activities that are based on the value perspectives of key stakeholder groups in a customer–supplier relationship. The value perspectives collected are positioned in the stakeholder landscape and fall into two categories. One related to the outcome and one related to the process quality of risk management. The model presented in this chapter can be used recursively to model up-stream and down-stream value perspectives of stakeholders in the supply chain. It is established to facilitate a conversation with the stakeholders, elicit their value perspectives and identify alignments and misalignments in order to customize the SCRM.

Pelle Willumsen, Josef Oehmen, Monica Rossi, Torgeir Welo

Chapter 7. Risk Management of Critical Logistical Infrastructures: Securing the Basis for Effective and Efficient Supply Chains

Abstract

To establish both effective and efficient supply chains, not only planning, controlling, and monitoring of material, information, and financial flows are necessary, but also the logistical infrastructure must be available and in an appropriate condition for all required processes. However, in the recent past, various events led to a limitation—or even to a breakdown—of the logistical infrastructure. These often unanticipated events—ranging from natural catastrophes such as an earthquake, to political crises such as in Eastern Ukraine, to terror attacks—might have a tremendous impact on supply chains. However, in supply chain risk management, the explicit consideration of risks for the logistical infrastructure is often ignored. We therefore focus on the critical logistical infrastructure and develop an evaluation approach for decision makers to support them in channeling risk management activities. The evaluation considers how the limitation or breakdown of any element of the logistical network influences all supply chains that use the network. By calculating risk-induced costs for the supply chains, implications of risk can be quantified and used as a basis for decision making.

Michael Huth, Sascha Düerkop

Chapter 8. Procedure Model for Supply Chain Digitalization Scenarios for a Data-Driven Supply Chain Risk Management

Abstract

Screening existing literature on Supply Chain Risk Management (SCRM) shows that only sporadic attention is paid to real data-driven SCRM. Most tools and approaches lead to an expert knowledge-based SCRM. Due to the emerging topic of digitalization in supply chains, there is huge potential in building a data-driven, smart SCRM. Looking at the literature related to digitalization in supply chains reveals that most publications are related to actual applications and less attention is paid to conceptual models making digitalization manageable. This chapter presents a process model to support the management in developing and assessing supply chain process-oriented digitalization scenarios with a focus on risk prevention and reduction. Decision makers can decide between different maturity stages for their SCRM and develop digitalization scenarios in workshops supported by domain- mapping matrices to structure the process. The decision-making process ends with an evaluation approach.

Florian Schlüter

Chapter 9. Preparing for the Worst

Abstract

Investments in supply chain risk management (SCRM), like other risk management initiatives, often require an upfront investment in an initiative that has no guaranteed or even likely payoff because the value is linked to a highly uncertain contingency. Such investments in SCRM can be modeled as real options that give a company the right but not the obligation to take action in the future, such as in response to a risk event. This chapter revisits supply chain risk by describing how companies are now managing supply chain risks. It illustrates four common categories of investment—each of which can be looked upon as a real option—that companies make in preparation for disruptions in supply (although these preparations also serve to handle surges in demand). The categories are investments in redundancy (e.g., inventory), flexibility (i.e., of facilities and processes), emergency operation centers (EOC), and business continuity planning (BCP).

Yossi Sheffi

Chapter 10. The Future of Resilient Supply Chains

Abstract

While supply chain resilience has been touched upon frequently, research remains (with the exception of often repeated anecdotal examples) relatively disparate on what disruptions actually are. This research aims to advance theoretical and managerial understandings around the management of supply chain disruptions. A two-stage research process is used which focuses first on polling academic experts. This stage is followed by the extraction of insights from practitioners in the automotive, electronics and food industries. Our findings coalesce around: (1) the types of disruptions that respondents are most concerned about; (2) the associated strategies suggested to cope with disruptions; and, (3) how resilience can be measured. It is apparent that there are some areas where academics and practitioners agree and others where they agree to a lesser extent. Both sets of actors tend to agree on how resilience can be quantified, with recovery time the preferred indicator. However, there is a discrepancy around how resilience is achieved within the supply chain. Academics emphasise the importance of redundancy while practitioners refer more to flexibility. Also, they disagree around what constitutes “key disruptions”: academics suggested high-profile events, while practitioners are more concerned with day-to-day problems.

Mattia Donadoni, Sinéad Roden, Kirstin Scholten, Mark Stevenson, Federico Caniato, Dirk Pieter van Donk, Andreas Wieland

Incorporating Relational and Behavioral Perspectives

Frontmatter

Chapter 11. Can Buyer Consortiums Improve Supplier Compliance?

Abstract

When suppliers (i.e., contract manufacturers) fail to comply with environmental or safety regulations, several non-governmental agencies and consumer activists put pressure on the buyers (customers) to take necessary actions to improve supplier compliance. Due to concerns over negative image and public boycotts, many buyers conduct costly audits to improve supplier compliance. By considering a common practice that calls for independent audits (i.e., each buyer performs its own audit) as a benchmark, we examine the implications of joint audit mechanism arising from a buyer consortium. Under this mechanism, buyers conduct joint audits by sharing the joint audit cost and impose a collective penalty on the supplier if the supplier fails their joint audit. We evaluate the efficacy of joint audits against the commonly practiced independent audits. Our analysis reveals that the joint audit mechanism is beneficial in two important ways. First, it can make the supplier increase its compliance level in equilibrium. Second, the joint audit mechanism can increase the supply chain profit when the audit cost is below a certain threshold.

Felipe Caro, Prashant Chintapalli, Kumar Rajaram, Christopher S. Tang

Chapter 12. Leadership in Risky Supply Chains

Abstract

Two logisticians from the Department of Defense offer ideas that may apply to either military and commercial supply chains or combinations thereof. A stable supply chain is where operations are routinized across smooth inter-organizational relationships. When faced with familiar situations, supply chain partners can rely on past experience which has become the basis for routine work; that is, partners employ the reliable frames of reference imbedded in their standard operating procedures. However, unusual situations present emergent, unpredictable risk and require management that is qualitatively different from that in standardized practice. In the face of risky supply chains, adaptive leaders exercise “creative deviance,” and seek to influence others in the chain to diverge from their habitualized frames of reference through divergence and value patterning. While adaptive leadership becomes a mitigation strategy for confusingly novel situations, there are also social risks for supply chain innovators.

Christopher R. Paparone, George L. Topic Jr.

Chapter 13. Malicious Supply Chain Risk: A Literature Review and Future Directions

Abstract

Supply chain risk management faces a myriad of challenges. Perhaps the most understudied of which deals with intentional disruptions; that is, those disruptions arising from deliberate actions that can negatively affect supply chain operations and performance. The following chapter focuses on suppliers intentionally undermining the operations of a supply chain through opportunistic behavior such as: deception, product fraud, and contract/trust breeches. Such behavior engenders relational failure and leads to a type of risk that extant models of risk management have neglected. Accordingly, proactively managing this type of risk requires a substantially different management approach. The following presents a review of the innovative work in this domain and subsequently advances a framework for aiding managerial decision making for proactively managing and coping with such intentional risk in a supply chain. This framework encapsulates a three-pronged approach centered on avoiding and detecting, mitigating the impact of, and recovering from this unique type of supply chain risk.

Scott DuHadway, Steven Carnovale

Chapter 14. A Behavioural View of Supply Chain Risk Management

Abstract

The field of supply chain risk management (SCRM) has provided academics and managers with a range of useful models and frameworks to identify, assess and mitigate potential disruptions. At the core of these frameworks are implicit assumptions of rational decision-making, consistent preferences and optimal choice. Empirical evidence has, however, questioned the validity of making such assumptions and has shown that environmental uncertainty and managerial illusions create deviations from rational decision-making. Moreover, studies have found that managers may have individual goals that are not related to risk and cost minimisation but that reflect their risk preferences, status-seeking or the history of their relationships with exchange partners. Failure to account for behavioural factors, such as risk perception and social preferences, may therefore lead to inaccurate risk management models and sub-optimal decision-making. In this chapter, we draw from advances in behavioural research to highlight the importance of incorporating such factors into supply chain risk management models. In particular, we challenge the underlying assumptions—i.e. objective risk assessment and rational decision rules—and review behavioural factors relevant in the risk management context. Based on our discussion, we provide potential avenues for future research.

Mehrnoush Sarafan, Brian Squire, Emma Brandon-Jones

Managing Risk in Sustainable and Innovative Supply Chains

Frontmatter

Chapter 15. Resilience and Sustainability in Supply Chains

Abstract

This chapter presents an overview of issues regarding supply chain resilience and sustainability and how the two interact. Here, sustainability is discussed in terms of environmental, ethical, and social responsibility criteria, rather than taken to mean being able to continually function at an acceptable level over time. Initially, supply chain resilience and supply chain sustainability are discussed separately, and commonalities are highlighted. Drawing on results from the literature, each is analyzed along three dimensions: An economic/cost-related dimension; an environmental dimension; and a social impact dimension. A more direct relationship between the two concepts is then presented. We frame the resilience-sustainability relationship by presenting four possible cost/benefit categories: operational, compliance, direct, and indirect. These categories, analogous to total cost of quality categories used when analyzing quality management decisions, can serve as a basis for informing decision makers when seeking to make decisions regarding resilience-sustainability strategies. Underlying our discussion are concepts drawn from business continuity and risk management, which are used to develop strategies to improve the resilience-sustainability relationship. Drawing on these concepts, we finally discuss how they can be employed by practitioners.

Holmes E. Miller, Kurt J. Engemann

Chapter 16. Sustainability Risk Management in Supply Chain

Abstract

Sustainable supply chains have become an emerging research topic which is also increasingly on the agenda of purchasing and supply managers. Although the role of sustainability, and especially corporate social responsibility, has continued to increase, implementation in the supply chain remains challenging. The chapter aims to find out how to implement and assure responsibility in the purchasing and supply chain and the role of risk management in assuring responsibility. Using case studies as illustrations, the chapter offers guidelines for the process of implementing responsibility in the supply chain and addresses what kind of role risk management plays in this process. The systematic methods for the process of implementing responsibility are likely to provide insights for managers who are responsible for assuring responsibility in the supply chain.

Jukka Hallikas, Katrina Lintukangas, Daniela Grudinschi

Chapter 17. The Relationship Between Firm Resilience to Supply Chain Disruptions and Firm Innovation

Abstract

This chapter discusses the relationship between supply chain disruption risk management and innovation management and examines whether a firm’s investment in innovation can improve the firm’s resilience to supply chain disruption. We review the antecedents of both firm innovativeness and firm resilience to supply chain disruptions, and we identify how investment in innovation can enhance a firm’s response to supply chain disruptions using a systematic literature review process. We identify leadership, information sharing, and collaboration as practices that improve both firm innovation and firm resilience to supply chain disruption. We discuss future research directions to further examine the relationship between a firm’s innovation capability and the firm’s resilience to supply chain disruptions.

Mahour M. Parast, Sima Sabahi, Masoud Kamalahmadi

Chapter 18. Supply Chain Virtualization: Facilitating Agent Trust Utilizing Blockchain Technology

Abstract

In this chapter, through the lens of information security, we discuss the use of blockchain technology as a mechanism for facilitating trust between various supply chain agents. The goal is to explicate the use of blockchain technology as a distributed ledger to mitigate a varied set of risks to supply chain virtualization, whereby various agents within the supply chain context can engage in transactions with an immutable and cryptographically secure record. This immutable and secure record would then serve as the foundation of a mutually beneficial relationship, built upon the blockchain technology, by engendering greater trust among supply chain agents. The usefulness of blockchain technology is such that it enables information to be stored using a cryptographically secure hash and be distributed among multiple record-keeping nodes. Each agent within the supply chain context can act as a node and, by maintaining a copy of the record, create a distributed ledger of information. This provides two distinct benefits that facilitate trust among agents within the supply chain context; first, agents acting as nodes within the blockchain possess a copy of the information record, which cannot be altered without their consent. Second, information is stored on the blockchain using a secure method of encryption that provides protection against tampering from malicious sources and security of the information contained on the chain. Therefore, these two benefits of blockchain technology provide supply chain agents with powerful trust-building mechanisms, which extricate fear and allay concerns when interacting with new or unknown agents.

Kane J. Smith, Gurpreet Dhillon

Emerging Typologies and Taxonomies

Frontmatter

Chapter 19. Differentiating Between Supply and Supplier Risk for Better Supply Chain Risk Management

Abstract

■■■

Sudipa Sarker

Chapter 20. Categorizing Supply Chain Risks: Review, Integrated Typology and Future Research

Abstract

Nowadays, supply chains operate in a dynamic environment where a potential unwanted event that does not constitute a risk today may be a severe risk tomorrow. Recent events indicate that supply chain operations of a focal firm may be harmed, when risks that were not successfully identified, materialize. This underlines the importance of supply chain risk identification process in supply chain risk management (SCRM), which can affect a firm’s long-term survival. Firms that are aware of the types of risks that may adversely affect their supply chain operations can improve the management of these risks. Despite the merit of previous studies on supply chain risk identification, current literature is incomplete to offer an inclusive categorization of supply chain risks. This hinders the efforts of firms to develop meaningful risk categorizations, and subsequently their overall supply chain risk management effort. This chapter aims to alleviate this problem. First, it reviews the various typologies proposed in the SCRM literature since 2000 using the systematic network analysis method. By explaining how the categorization of supply chain risks has evolved, this chapter provides valuable insights, both to researchers and practitioners, regarding the historical development of the field. A key conclusion from this review is that none of the existing typologies is complete, though most overlap. Therefore, the second contribution of the chapter is to build on what is already known to offer a new typology of supply chain risks that is both inclusive and parsimonious. Finally, the chapter provides recommendations for future research.

Michalis Louis, Mark Pagell

Chapter 21. The Impact of Supply Chain Disruptions on Organizational Performance: A Literature Review

Abstract

This chapter examines the effect of supply chain disruptions on organizational performance. We employ a systematic literature review to identify different conceptualizations and theorizations of supply chain disruptions, and to understand how different types of supply chain disruptions affect organizational performance. We later discuss organizational capabilities (resilience enhancers) that can improve an organizational response to supply chain disruptions. Finally, we outline future research directions in supply chain risk management and supply chain resilience.

Mahour M. Parast, Mansoor Shekarian

Grounding Our Understanding of Supply Chain Risk: Cases and Observations

Frontmatter

Chapter 22. The Management of Disruption Supply Risks at Vestas Wind Systems

Abstract

Supply risk management is a key strategic task for Vestas Wind Systems A/S (Vestas), who designs, produces, installs, and services wind turbines for customers in the global green energy market. One type of supply risk that draws much Vestas’ attention is disruption risk, which covers a range of different disruption events, driven by different sets of risk drivers and requires different combinations of risk management strategies. In this chapter, we analyze the three Vestas purchases of gearboxes, towers, and electronics and show how different sets of strategies are required for the successful mitigation of these risks. Based on this analysis, we propose a simple supply risk management framework, which can help managers mitigate disruption risk. The literature tends to treat disruptions as events that can be dealt with by the same generic set of strategies. In this chapter, we show that effective disruption mitigation may require very different strategies depending on the type of supply and the varied drivers causing the disruption.

Chris Ellegaard, Anne Høj Schibsbye

Chapter 23. Foreign Exchange Risk Mitigation Strategies in Global Sourcing: The Case of Vortice SPA

Abstract

Risk in global supply chains has garnered significant attention in business practice and research. However, our understanding of currency rate exchange volatility, and the resulting foreign exchange (FX) risk firms are exposed to, is currently limited from a supply chain perspective. The purpose of this chapter is to present an illustrative case of how Vortice SpA, a medium-sized Italian producer of ventilation systems for residential and industrial applications, perceives and mitigates FX risk in their firm and extended supply chains.

Barbara Gaudenzi, Roberta Pellegrino, George A. Zsidisin, Claudio Bruggi

Chapter 24. The Paradox of Risk Management: A Supply Management Practice Perspective

Abstract

How are risks managed in organizations? A conformist answer to this question is that all the plausible risks are first identified, then assessed and finally mitigated or treated. Grounded on a single in-depth case study of a leading global manufacturing organization and anchored in David Whetten’s framework for theoretical contributions, this chapter reveals that risk management in practice is not as holistic, single-level and time-independent activity as it is presumed to be in the theory and widely referred to standards. The findings suggest that different risks are managed using a multitude of methods during diverse activities within the supply management process by different personnel positioned at various hierarchical levels of the organization. Consequently, this paper contributes to an alternative understanding of risk management, referred to as the paradox of risk management which is a fragmented, multilevel and time-dependent process. Though this chapter draws on a single case of a large global organization and reveals risk management from the supply management practice perspective, the results may plausibly be valid for other large organizations operating in the supply chain context. As a result, this paper is expected to support the research community in developing practically rational models as well as provide assistance to managers of large complex organizations in forming a holistic understanding of supply chain risk management.

Sudipa Sarker

Chapter 25. Risk in Complex Supply Chains, Networks and Systems

Abstract

Risk has largely been investigated in private sector supply settings. Complex supply chains, networks and systems that straddle private and public interface boundaries pose particular risks and challenges. Through an examination of three examples, the nature of the task and diversity of actors and stakeholders are shown to impact on risk mitigation. An initial conceptualisation of risk in complex supply chains, networks and systems is provided to illuminate the relationships between diversity, complexity, risks and their mitigation.

Christine Mary Harland

Chapter 26. Surfing the Tides of Political Tumult: Supply Chain Risk Management in an Age of Governmental Turbulence

Abstract

While the dominant focus in discussions of supply chain risk management has been on dyadic relationships, even a very cursory familiarity with global events should serve to make it clear that business interests are profoundly impacted by politics, and the speed and frequency of the shifting political tides are expanding at a pace that is almost unimaginable.

Michael E. Smith

Backmatter

Titel: Revisiting Supply Chain Risk
herausgegeben von: George A. Zsidisin
Michael Henke
Verlag: Springer International Publishing
Electronic ISBN: 978-3-030-03813-7
Print ISBN: 978-3-030-03812-0
DOI: https://doi.org/10.1007/978-3-030-03813-7