This is already my second article (click here for the first) about managing supply chain risks in the chemical industry. This time by Paul R. Kleindorfer and Germaine H. Saad from Wharton and the Widener University. But this industry is quite interesting since it has to withstand a multitude of risks, so let’s get right to business:
Today’s article is from the late 90s, but sets a great example for research methodology in supply chain risk management. But don’t worry, I will focus on the results, since they’re very interesting as well. The objective of today’s article (Supply Chain Management in Food Chains: Improving Performance by Reducing Uncertainty) is to show strategies (here called principles) to reduce uncertainty, and at the same time show the beneficial effects of reduced uncertainty.
I just found the first supply chain risk related paper from a professor (Biying Shou) of one of my alma maters: The City University of Hong Kong, and I think this a good time to have a look at his work.
Many articles, including my own research show, that companies tend to focus largely on risk mitigation measures concerning the supply side. Only little is done to include demand side risks or demand side measures into the mitigation of supply chain risks. The study “Pricing During Disruptions: A Cause of the Reverse Bullwhip Effect” focusses on optimal pricing measures during a disruption. And so it helps to close the gap a little bit.
I have to distract myself a little bit from thinking about supply chain risks too much, so I thought why not use the chance to read a different article once in a while. Well, at least the authors are familiar: Paul Childerhouse and Denis R. Towill and their paper of 2003: “Simplified material flow holds the key to supply chain integration”
The distinction between disruptions and recurrent / continuous risks is commonly used by researchers and practitioners in supply chain management. But how should the differences be reflected in the supply chain planning process? Is it necessary to differentiate between the risk types here as well?
In 2007 Sunil Chopra et al. analyzed this question in depth.
This blog may be a good starting point for supply chain risk management related research and literature, but even with more than 140 articles reviewed in the blog I still just touched the tip of the iceberg. There are still many basic articles left. Like this one by Helen Peck (2006): “Reconciling supply chain vulnerability, risk and supply chain management”
This article presents a comprehensive practice oriented framework for managing supply chain disruptions by Sunil Chopra and ManMohan S. Sodhi. The article has been published in the MIT Sloan Management Review in 2004. The framework covers everything from risk analysis to the selection of the risk mitigation strategy.
A large proportion of the efforts in supply chain risk management focus on the supply side, even though, using common definitions of supply chain management, the supply chain of course not only contains the suppliers but also the customers down to the end-customer.
Focussing on the supply side, Hallikas et al. 2005 studied the different classes of supplier relationships and what risk mitigation strategies might be effective with these classes. This classification can help both affected parties, in understanding the effects of risk on their relationship.
For many years sustainability risks have been largely neglected. Reputational damages caused by incidents like the Brent Spar platform can reach tens of millions of dollars. But in a supply chain context companies are not only held responsible for their own actions but also for the actions of their suppliers.
In their 2010 paper Foerstl et al. analyze supplier sustainability risk and develop and test a framework for its mitigation.