This is a review of another chapter of the book by Zsidisin and Ritchie (Supply Chain Risk). The book can be bought at amazon.com, if you are interested in reading more.
Companies offer a smaller or larger range of products serving different markets, depending on their history and primarily the respective business model.
From a supply chain management point of view this poses the question if it is ok just to use the same supply chain strategy for all those products.
Supply chain risks are a part of everyday life. Shorter disruptions to supply, production and distribution systems happen on a regular basis.
On the other hand longer disruptions become more frequent, especially due to the high interconnectedness of global supply chains.
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.
Within a supply chain many supplier-buyer relationships exist. Even though supply chain management aims to take a high level view, these dyadic relationships form the basis of the supply chain and therefore should be the focus of a supply chain analysis.
The negotiation of the terms of these relationships defines the structure of the supply chain and can affect the power and profit distribution within the supply chain itself.
So, this week we’ll have a closer look at negotiations in the supply chain using a 2008 paper by Frederik Zachariassen.
This time I’d like to have a look at supply chain risk management from a strategic point of view: What are the prerequisites in the design and culture of an organization to mitigate supply chain risks? The title of the article I review today is: “The organizational antecedents of a firm’s supply chain agility for risk mitigation and response”.
Method
The authors use structural equation modeling technique to establish the relations within their model (figure 1).
Practitioners often complain about the huge gap between practice and research related to the estimation of risks. In theory all is easy: A disruptive event just gets a probability and outcome assigned. But in practice these figures most often have to be estimated.
Todays article by Knemeyer et al. (2009) covers exactly this dilemma and tries to answer the question of how to plan for a catastrophe.
I just recently had a discussion with a professor at Mahidol University (Bangkok), where I was staying for a research exchange, on how knowledge can be used to mitigate risks within a supply chain.
Several questions I receive concern the very basic elements of supply chain risk management. Since reading “Categorization of Supply Chain Risk and Risk Management” by Norrman and Lindroth (2004) I often referred to it, to describe the different aspects.
Framework
Norrman and Lindroth suggest a three dimensional framework to analyze different supply chain risk management issues (figure 1). The dimensions are:
