Book Review: Managing Supply Chain Risk and Vulnerability

Another book by someone from the ISCRiM group? No, not this time, or perhaps, yes, after all. Managing Supply Chain Risk and Vulnerability: Tools and Methods for Supply Chain Decision Makers by Teresa Wu and Jennifer Blackhurst sounds like ISCRiM, but it’s not. If it were, it should have been noted in the ISCRiM Newsletter, but it wasn’t. Nonetheless, several of the ISCRiM members have contributed to the chapters in this book, which is well worth taking a closer look at, particularly if risk modeling and decision-making is your field.

A two-fold purpose

The book, so the authors say, serves a twofold purpose:

  • Understanding and assessing risk in the supply chain
  • Decision making and risk mitigation in the supply chain

Consequently, the book has two sections covering the above divisions, with 4 and 5 chapters each, written by top ranking researchers from around the world. That much is true, as I recognize many, but not all of the names of the chapter authors.

Understanding and assessing risk

Effective Management of Supply Chains: Risks and Performance by Bob Ritchie and Clare Brindley is very similar to their journal article on Measuring supply chain risk management and performance, but the concepts are further developed than in the journal article.

Managing Supply Chain Disruptions via Time-Based Risk Management by ManMohan S. Sodhi and Christopher S. Tang is a fresh new approach towards supply chain risk, leaning on business continuity, and focusing on reducing the impact by shortening the recovery time. In this they employ a “3D”-model: (1) Detect the event, (2) Design a response, (3) Deploy the response.

Prioritization of Risks in Supply Chains by Mohd. Nishat Faisal lloks at supply chain disruptions in Small and Medium sized Enterprises, since they are particularly vulnerable to supply chain failures, due to limited resources for planning and mitigation.

A Generalized Simulation Framework for Responsive Supply Network Management by Jin Dong, Wei Wang and Teresa Wu evaluates Discrete Event Simulation as a key component in responsive supply network management for proactively assessing the robustness and resilience to disruption of a supply network

Decision making and risk mitigation

Modeling of Supply Chain Risk Under Disruptions with Performance Measurement and Robustness Analysis by Qiang Qiang, Anna Nagurney and June Dong develops a multi-tier supply chain network model with multiple decision-makers associated at different tiers and with multiple transportation modes for shipment of the good between tiers. The model formulation captures supply-side risk as well as demand-side risk, along with uncertainty in transportation and other costs. Not the easiest model to understand, but it serves its purpose well.

The Effects of Network Relationships on Global Supply Chain Vulnerability by Jose M. Cruz. analyzes the effects of levels of social relationship on the vulnerability of global supply chain networks. The chapter comes up with a network performance measure for the evaluation of the efficiency and vulnerability of global supply chain networks,  capturing risk, transaction cost, price, transaction flow, revenue, and demand information, while keeping in mind the decision-makers behavior.

A Stochastic Model for Supply Chain Risk Management Using Conditional Value at Risk by Mark Goh and Fanwen Meng establishes a stochastic programming formulation for supply chain risk management using conditional value at risk. Right…they lost me already here. I’ll skip this chapter.

Risk Intermediation in Supply Chains by Ying-Ju Chen and Sridhar Seshadri is better. They say that in some supply chains, retailers are relatively small and averse to taking risk, and thus, the varying degrees of risk aversion represent a hurdle for the design of a uniform contract for all retailers. However, this can be modelled and simplified, which is what they do.

Forecasting and Risk Analysis in Supply Chain Management: GARCH Proof of Concept is written by an array of researchers: Shoumen Datta, Don P. Graham, Nikhil Sagar, Pat Doody, Reuben Slone and Olli-Pekka Hilmola. They explore advanced forecasting models, focussing specifically on amplified demand.

The verdict

Personally, the first section is the part of the book that I like best. Forecasting and stochastic modeling for decision making are not really my cup of tea; I’m much more a man of visions, strategies, and concepts. That said, the 2nd section does have very interesting articles for me as well, it’s not all math and equations.

Reference

Blackhurst, J. and Wu, T. (Eds.) (2009). Managing Supply Chain Risk and Vulnerability: Tools and Methods for Supply Chain Decision Makers. London: Springer. DOI: 10.1007/978-1-84882-634-2

Author links

Publisher link

amazon.com

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