Drivers of supply chain vulnerability

In 2005, the topic of supply chain vulnerability was still a relatively unexplored territory, though it was already in its ascendancy to becoming one of the major areas of management research. In her article Drivers of supply chain vulnerability: an integrated framework, Helen Peck identifies four drivers of supply chain vulnerability, based on an exploratory and empirically grounded case study of commercial supply chains.

A multi-level framework for analysis

The case study, which is minutely detailed in the paper referenced below, suggests that the sources and rivers of supply chain vulnerability, and conversely, supply chain resilience, are found at four different and interlinked levels within the supply chain:

Level 1 – Value stream, product or processes
Workflows and information flows

Level 2 – Assets and infrastructure dependencies
Fixed and mobile assets

Level 3 – Organizations and inter-organizational networks
Contractual and trading relationships

Level 4 – The Environment
Social and natural environment

Intertwined and connected

In assessing the vulnerability of a supply chain, all levels should be investigated in how their characteristics influence the supply chain.

At level 1, the supply chain is seen as a logistics pipeline, where the focus on lean and agile practices have made supply chain performance the overall goal but at the same time it also exposed the supply chain to many risks.

At level 2 the focus is on the supply chain as a carrier of goods and information, and supply chain vulnerability is determined by production sites, distribution centers and warehouses, as well as IT and other communication facilities, and also the whole transportation network from supplier to end customer.

At level 3 the view is further afield, looking at the supply chain from a strategic and management perspective, where organizational management, power-sharing, collaboration and competition become important factors in evaluating vulnerability.

At level 4 the view is a broad macroeconomic perspective, political, economic, social, legal and technological factors, and disruptions or sudden changes in these factors are more often than not beyond the control of the company, but must be dealt with accordingly.

Conclusion

The 4-level model employed by Peck is an excellent tool for explaining the scope and dynamic nature of supply chain risk. It emphasizes that a resilient network involves much more than the design and management of robust supply chain processes. It is important to recognize that by taking actions to reduce risk at one point within the four levels, at the same time the risk profile for the other levels is changed, including players and stakeholders not thought of in the initial risk assessment. Supply chains are dynamic and constantly evolving, and so is supply chain risk. Achieving supply chain resilience is a constant battle and a never-ending process.

References

Peck, H. (2005). Drivers of supply chain vulnerability: an integrated framework International Journal of Physical Distribution & Logistics Management, 35 (4), 210-232 DOI: 10.1108/09600030510599904

Links

Related

Jan Husdal is an engineer turned researcher turned engineer again and he is now a Resilience Adviser with the Southern Region office of the Norwegian Public Roads Administration (Statens vegvesen Region sør) in Arendal, Norway,

Posted in ARTICLES and PAPERS
Tags: , , , ,
ARTICLES and PAPERS
Toy stories: lessons to be learned
supply-chain-risk-toy-industry
Christmas. Toys. Two things that belong together. But it isn't always a happy story. Not only do sea[...]
Supply chain vulnerability and resilience
francesco-longo-supply-chain
Today's post is a review of a conference paper written by Francesco Longo and Tuncer Ören in 2008 an[...]
Call for papers: S-D Logic and Supply Chain Risk
s-d-logic-supply-chain
Is supply chain risk is now beginning to enter more and more areas of  supply chain thinking? It wou[...]
BOOKS and BOOK CHAPTERS
Book review: GIS for Transportation
transportation-gis-miller
Having been a student with Harvey Miller at the University of Utah 2000-2002 probably makes my revie[...]
Book Review: Customs Risk
customs-risk
International trade and global supply chains are filled with goods that are criss-crossing the globe[...]
The Definition of Agility
agile-enterprise-goranson
Although getting close to 20 years old now, The Agile Virtual Enterprise: Cases, Metrics, Tools, wri[...]
REPORTS and WHITEPAPERS
A risky business? The top 10 challenges of offshoring
Sridhar-Vedala
Organisations embarking on offshoring face multiple challenges; many of which can be extremely daunt[...]
Global Risk Reports
global-risk-reports
While waiting for the World Economic Forum Global Risk Report for 2009, the continuation of the Glob[...]
America’s Crumbling Infrastructure
americas-crumbling-infrastructure
My daily morning routine includes a cup of coffee while watching the World Business Report on BBC Wo[...]