The three gaps

Because SCRM is still a nascent area, so the authors, most researchers in this area tend to come from different more established areas. However, this diversity affects collaboration with other researchers [...] and it can also hamper research engagement with industry. Essentially, there are three areas where researchers disagree most:

(1) a definition gap—there is no clear consensus on the definition of SCRM (because some limit the scope of SCRM to rare but large impact events while others believe that SCRM is about demand-supply uncertainties);

(2) a process gap—there is lack of research on an important aspect of the risk management process, namely, the response to supply chain risk incidents; and

(3) a methodology gap—there is shortage of empirical research in the area of SCRM.

This is creating three gaps that need to be closed for supply chain risk research to achieve some common ground.

SCRM Literature Review

According to the authors, a useful first step in learning more about these gaps is to characterize the diversity in scope in supply chain risk research methods among researchers. So they do, and they come up with this selected list of articles (in chronological order):

• Jüttner et al. (2003)
  Based on sources: environmental risk sources, network risk sources, and organizational risk sources
• Spekman and Davis (2004)
  Six dimensions of supply chain as risk sources, (1) inbound supply, (2) information flow, (3) financial flow, (4) the security of a firm’s internal information system, (5) relationship with partners, and (6) corporate social responsibility
• Cavinato (2004)
  Based on five subchains/networks as risk sources, (1) physical, (2) financial, (3) informational, (4) relational, and (5) innovational
• Chopra and Sodhi (2004)
  Categorize supply chain risks at a high level as disruptions or delays. These risks pertain to (1) systems, (2) forecast, (3) intellectual property, (4) receivable, (5) inventory and (6) capacity risk
• Christopher and Peck (2004)
  Categorize supply chain risks as (1) process, (2) control, (3) demand, (4) supply, and (5) environmental
• Kleindorfer and Saad (2005)
  Based on the sources and vulnerabilities of risks, (1) operational contingencies, (2) natural hazards, and (3) terrorism and political instability
• Bogataj and Bogataj (2007)
  Categorize supply chain risks as (1) supply risks; (2) process risks; (3) demand risks; and (4) control risks
• Sodhi and Lee (2007)
  Categorize supply chain risks in the consumer electronics industry broadly as those requiring strategic decisions and those requiring operational decisions, in three categories: (1) supply, (2) demand, and (3) contextual risks
• Tang and Tomlin (2008)
  Categorize supply chain risks as (1) supply, (2) process, and (3) demand risks, (4) intellectual property risks, (5) behavioral risks, and (6) political/social risks
• Manuj and Mentzer (2008a)
  Categorize supply chain risks as (1) supply, (2) operations, (3) demand, and (4) other risks including security and currency risks, See
• Manuj and Mentzer (2008b)
  for another categorization: (1) supply, (2) operational, (3) demand, (4) security, (5) macro, (6) policy, (7) competitive, and (8) resource risks
• Oke and Gopalakrishnan (2009)
  Consider low-impact high-frequency and high-impact low-frequency risks in three major categories: (1) supply, (2) demand, and miscellaneous risks in the retail sector
• Rao and Goldsby (2009)
  Categorize supply chain risks as (1) framework and (2) problem specific, and (3) decision making risk

Many of these articles have been reviewed on this blog (see links), some I know of, but hadn’t had the chance to review, while some are completely unknown to me, adding yet more papers to my already 2-foot high pile of “to be reviewed”-papers on my desk :(

The authors come up with even more articles and

classified the existing SCRM literature according to four key elements for managing supply chain risks: (1) risk identification; (2) risk assessment; (3) risk mitigation; and (4) responsiveness to risk incidents, the last one subdivided into responsiveness to (a) operational risks (frequent risk events stemming from inherent supply-demand uncertainty); and (b) catastrophic risks

I think this is an excellent classification scheme, as it follows the standard risk management procedures laid out in ISO73.

What is supply chain risk management?

Because the literature review indicated that there is much diversity in the scope including in definition of SCRM, the authors decided to investigate this further and conducted a survey on the definition of supply chain risk and of SCRM, asking the following main questions, with subsequent follow-up questions.

Q1 What is supply chain risk management (SCRM)?
Q2 How is SCRM different from supply chain management?
Q3 What is the link between SCRM and Enterprise Risk Management (ERM)?

Interestingly, the answer for the first question are somewhat divergent, see below:

When asked what SCRM is, disruptions and disasters rank low on the list.

When asked what SCRM should primarily be defined as, disruptions and disasters come up top of the list. Personally, I am not sure which is better; what do you think?

Supply Chain Risk Management goes where?

The authors also asked where supply chain risk management should be placed in relation to supply chain management and in relation to enterprise risk management, resulting in the following figures:

I think they got it right, because SCRM cannot be decoupled from SCM, nor can it be decoupled from ERM. In my opinion.

Conclusion

This paper should be required reading for any supply chain risk researcher. Not only does it list the most important works in supply chain risk management research, it classifies them in accordance with established risk management norms and it also lays the groundwork for future research into supply chain risk, by asking the research community itself where it thinks supply chain risk should place itself and where it should be headed, thus building rapport with those most likely to follow suit.

Reference

Sodhi, M., Son, B., & Tang, C. (2011). Researchers’ Perspectives on Supply Chain Risk Management Production and Operations Management, 21(1), 1-13 DOI: 10.1111/J.1937-5956.2011.01251.X

Author links

• city.ac.uk: Manmohan S Sodhi
• city.ac.uk: Byung-Gak Son
• ucla.edu: Christopher S Tang

Related posts

• husdal.com: Current gaps in supply chain risk research

Business Dis-Continuity

The now classic textbook example of supply chain continuity, or rather “dis-”continuity, is the difference in how Ericsson and Nokia handled a fire in the chip manufacturing plant that supplied both companies. A well-handled supply chain disruption can result in business continuity, i.e. Nokia, while an ill-handled supply chain disruption can result in business dis-continuity, i.e. Ericsson. Building on this as one of the examples in the early pages of the book, Kildow goes on to explain in detail why and how she thinks that business continuity thinking should be part of supply chain management.

BCM+SCM=SCCM

As far as I can see, this is the first book that successfully marries Business Continuity Management with Supply Chain Management, thus creating Supply Chain Continuity Management, although this term is never used in the book anywhere, but that’s what it is; instead, she uses Supply Chain Business Continuity. Personally, I consider straightforward supply chain continuity the better terminology.

Familiar, but better

In its structure, the book more or less follows the same and familiar steps that Steve Cartland used in his book chapter on business continuity in global supply chains:

• Assess the risk
• Analyze the business impact
• Develop business continuity strategies

However, unlike Cartland’s book chapter, Kildow focuses exclusively on supply chains. As such, she is perhaps closer to the Swedish book on How to secure your supply chain that I have reviewed earlier.

Business Impact Analysis

Every enterprise has a supply chain, so Kildow, and within it there are products and services where disruptions could have a huge impact on business continuity. For each of these there are critical business functions that depend on each other, and mapping these functions is important in establishing their level of criticality. Here is Kildow’s suggested evaluation criteria:

• Function involves direct contact with customers
• Function involves direct contact with suppliers, contractors or shippers

Loss of function would

• Directly result in a loss of revenue and profit
• Potentially result in a loss of customers
• Directly result in increased operating costs
• Result in accounts receivable delays
• Delay distribution of products or service delivery
• Delay shipment or receipt of products
• Delay receipt of materials, parts or components
• Negatively impact the company’s current public image
• Result in significant liability exposure or other legal ramifications
• Prevent the company from meeting regulatory requirements
• Lead to imposition of fines or other penalties for failure to fulfill delivery clauses or meet service level agreements
• Result in financial penalties for late payment of accounts payable.

Considering this exhaustive list, there is maybe not much left that is non-critical, but more important than the assessment of everything important is to develop strategies for ensuring continuity, and in the book, Kildow lays out the steps for doing so.

Developing Business Continuity Strategies

When developing strategies, Kildow says, it is important to remember that business continuity is not business as usual, rather it is best possible business under certain scenarios.  Thus, all strategies must consider two dimensions:

• when a disaster directly impacts the organization
• when a link in the supply chain experiences a disruption that creates a disaster ripple effect

Once basic strategies are identified, it is necessary to dig into all related requirements for for ensuring continuous business flows such as inventory levels, restocking plans, and the movement of materials, components, parts and products.

Why business continuity?

As an argument for the importance of business continuity, Kildow puts forward the 80-20 rule

• 20% of a company’s stock takes up 80% of its warehouse space
• 80% of sales come from 20% of the sales force
• 20% of an organization’s staff causes 80% of its problems
• 20% of an organization’s staff provides 80% of its production
• 20% of the risks to an organization result in 80% of its disasters

Practical and hands-on

Not only does Kildow go into details about risks and strategies specific to supply chains, her book also includes a detailed appendix on

• how to assess your own business continuity readiness,
• what specific hazards a supply chain continuity plan should include,
• how to deal with pandemic issues,
• how to set up your continuity team,
• three continuity plan samples, and
• a supply chain/business continuity glossary.

Reference

Kildow, B. A. (2011) A Supply Chain Management Guide to Business Continuity. New York: AMACOM.

Author link

• linkedin.com: Betty A Kildow

Buy this book

• amazon.com: A Supply Chain Management Guide to Business Continuity

Related posts

• husdal.com: Supply Chain Risk versus Business Continuity
• husdal.com: Business Continuity in Global Supply Chains
• husdal.com: How to secure your supply chain

New for 2011: New insights and new risks

2011 provided me with a couple of new insights as to supply chain risk:

• I simply could not have leave out the impacts and aftermaths of the earthquake and tsunami in Japan.
• I included the risk definitions and risk matrix in this book on Security Risk Mangement, because I found them very illustrative.
• I expanded on the issue of risk and uncertainty in the three most common risk definitions.
• I thought it might be good to highlight supply chain deviations, disruptions and disasters versus supply chain disturbances and disruptions.
• I included a figure on how to reduce risks from this excellent German PhD on Risks in Low Cost Country Sourcing.
• Finally, as a teaser and “wake-up call”, since the lecture started at 8:15 in the morning I included a funny TV commercial from Norway, showing risk management in practice: assessing the current situation and visualizing all that can go wrong, deciding what to do and then realizing that you haven’t thought of everything after all:

The lecture slides

Reference

Husdal, J (2011) Supply Chain Risk – The dark side of supply chain management. Unpublished. Lecture notes, Molde University College, Molde, Norway.

Related

• husdal.com: Supply Chain Risk 2010

• husdal.com: Supply Chain Risk 2009
• husdal.com: Supply Chain Risk  2008

The highlights

So then, a little less than two years ago, what was keeping executives up at night? Below is a short summary of the questions and the replies, where I have cited the three top items and the three bottom items. You can read the full list in the report that you download below.

Over the past year, what has contributed most to the magnitude of disruption to your supply chain?

• Unpredictability of demand
• Exchange rate volatility
• Energy price volatility
• …
• Disputes with partners/suppliers
• IT or utility failure
• Intellectual property infringement

Over the next year, which of the following do you see as the biggest threats to the resilience of your supply chain?

• Unfavourable exchange rate movements
• Input price increases
• Energy price increases
• …
• Theft
• Product tampering
• Disruption from unknown third-parties to supply chain

Which of the following steps has your organisation taken in the past 12 months as a result of the current downturn?

• Negotiated lower prices from suppliers
• Increased efficiency of logistics
• Increased use of outsourcing
• …
• Increased prices to customers
• Reduced capacity levels
• No particular steps

Which of the following are exerting pressure on your company to increase its supply chain resilience?

• Executive management
• Customers
• Own business units and staff
• …
• Suppliers
• Non-executive management
• Logistics providers

Over the next 12 months, what do you see as the biggest obstacles to improved supply chain risk management?

• Concerns about increased costs and redundancy
• Underestimation of potential impact of supply chain risks
• Poor communication across supply chain
• …
• Inadequate technology
• Excessive focus on efficiency
• No representation of supply chain at board level

Which of the following steps are you currently taking to increase the resilience of your company’s supply chain?

• Improve collaboration with suppliers and partners
• Shift from single to multiple supplier base
• Streamline processes
• …
• Introduce supply chain event management system
• Increase capacity levels
• Nothing—resilience is not a concern

As I said above, this was written two years ago, and perhaps it is already outdated and no longer valid, but I’m not so sure. That said, how would you answer the questions above?

Related link

• acegroup.com: Managing supply chain risk for reward

Related posts

• husdal.com: Stemming the rising tide of supply chain risks
• husdal.com: The supply chain of the future

Material, financial and information flows

The article takes a familiar approach in classifying and categorizing different supply chain risks the literature they review, namely

• material flow risks
• financial flow risks, and
• information flow risks,

an approach many supply chain researchers will readily recognize, i.e. the “boxes, bucks and bytes” in Kleindorfer and Wassenhove’s Managing Risk in Global Supply Chains, strangely enough not mentioned in their collection of literature. On a side note, to complete the flows that make up supply chain management, Wassenhove added two more flows,

• people flows, and
• knowledge or skills flows

in his book on Humanitarian Logistics, flows that in my opinion are equally important in supply chain risk management, as people are often the weakest link in the supply chain, and people are the agents that more often than not perceive risks as different from what objective measures tell them to be.

Risk definiton

When looking at their list of 80 or so references I was surprised to not find many articles I would have considered important in looking back how the supply chain risk management literature has evolved. However, when looking at the definition of supply chain risk they employ, it became clear to me why they were so “selective”:

supply chain risk should refer to (i) events with small probability but may occur abruptly and (ii) these events bring substantial negative consequences to the system

While the authors may subscribe to a risk definition similar to that of Paul Kleindorfer, I beg to disagree here, as I believe that the focus on risk as something that is only very negative is not the right way to address the full spectrum of risk issues. Consequently, I think the authors have not fully captured the development of supply chain risk management research.

Literature review

First the authors describe how they found the articles they reviewed:

Based on the description of definitions in previous section, we use search keywords supply chain, supply chain risk or supply chain risk management together with risk or uncertainty. After obtaining these articles,we use the criteria ‘‘high impact and low probability risk’’ to filter the most relevant ones. Finally we have shortlisted and reviewed 138 articles between the years of 1995 and the first half of 2008.

This is a valid approach, but I would have liked to know more about the search keywords. Are those the keywords employed by the authors of the reviewed articles? If so they may not always fully describe the content the article, since the number of keywords allowed is often limited by the journal publisher, and some authors may deliberately chose to use certain keywords and to omit other keywords. Or did the authors (of this article) read and then decide what keywords that fit? Also a bit puzzling to me is that they say to have reviewed 138 articles, but only 80 or so made it into the references of the article, which in hindsight may account for the articles that I thought were missing from this review.

Solid work

Having said the above, I am still very much impressed with the work the authors have done. Using citation and co-citation analysis, they identify three separate time periods and topical clusters within those periods.

Main issues discussed during the year 1995 until 1999 include financial risk management and operations strategies such as adoption of lean concept and early supplier involvement .Between years 2000 and 2003, the number of articles in SCRM slowly increases. Main issues vary from operation plans to relationship of supply chain partners. In the same time period, we also note the emerging of studies on information technology and information flow. Meantime, we also note a rising discussion on globalization risk associating with political and cultural practices. A dramatic increase of publications starts in 2004, from which SCRM exhibits a steady rising of interest from academic researchers and practitioners. Challenges and opportunities of outsourcing to low cost countries are the favorite discussion topics. Others include supply chain partner relationship, supply chain environmental, economy and political issues and growth of information sharing and security. Several studies on financial risk are also noted.

Note the scale on the y-axis above. I must say that I find it hard to believe that while there haven’t been written that many articles on supply chain risk management, but obviously more than enough, they have actually been cited close to 500 times in 2003. Possible, yes, but the authors do not say where the citations have been taken from, so it is hard to judge credibility of the figure.

Nonetheless, the figure leaves no doubt that supply chain risk management has seen a dramatic increase in interest in the recent decade.

Research gaps

The authors identify a number of research gaps or possible new research strands for budding researchers:

Robust planning: exploring the uncertainty inherent in a supply chain, and developing optimization decisions which provide more predictable results.

Revenue management: using pricing policies to allocate and relocate capacity from disrupted to non-disrupted segments of the supply chain.

Agency theory: investigating understanding supply chain interdependencies in a systems perspective.

Option theory: integrating real options and financial options for improving strategic/tactical and operational decisions.

System dynamics: understanding and analyzing the inherent control policies in a supply chain, e.g. the bullwhip effect in supply chain disruption management.

Reverse logistics: using returned items as a backup or reserve inventory to improve supply chain reliability and to reduce tied-up capital

I find this a very interesting list, especially the last suggestion, which also adds in sustainability, perhaps the coming issue in future supply chain management, as reported by eft.com.

Critique

This is a well-researched article. It is perhaps not so well written or well-structured. By that I mean that it doesn’t flow so well when reading it, and it takes some time for the main points to sink in. Some figures are not self-explanatory and are also not described  in enough detail in the text to fully understand what they convey. Overall however, the article brilliantly sums up the core topics of supply chain risk management of the past, the present, and where it may be headed to in the future.

Reference

Tang, O., & Nurmaya Musa, S. (2010). Identifying risk issues and research advancements in supply chain risk management International Journal of Production Economics 133 (1), 25-34 DOI: 10.1016/j.ijpe.2010.06.013

Author links

• linkedin.com: Qu Tang
• linkedin.com: S Nurmaya Musa

Related posts

• husdal.com: A literature review in supply chain risk management
• husdal.com: Risk and uncertainty in supply chains

What are the Top Supply Chain Risks?

The Marsh report is based on a survey of 110 risk management professionals conducted in January and February 2008. The study results, so the report,  are remarkably consistent across industry and company size, suggesting that there are common supply chain risk pain points and best practices across the risk management profession. The list of  what were the top concerns in supply chain risk management in 2008 is quite interesting:

According to one of the respondents, “The most concerning risk issues, he says, are labor issues, raw material costs, political and regulatory climates, import/export restrictions, and risks involving shifting production from plant to plant or country to country.”

Why have Supply Chain risks increased?

According to Marsh, Although supply chain risks have always been present, they are being exacerbated by two forces: the move to leaner supply chains holding less inventory and the move to increased outsourcing.

This reminds me of my post on Lean logistics means risky logistics that I wrote two years ago. The report further notes that

more volatile supply chains also create margin risks for enterprises. Many companies find their expected sourcing savings from lower-cost areas to be significantly eroded by unanticipated supply chain volatility, leading to increased safety stock requirements, expensive transportation expediting costs, more quality control expenditures.

Indeed, while outsourcing foes have its benefits, supply chain risk cannot  be outsourced, as Jack Barry wrote in 2004.

What are important success criteria in battling supply chain risks?

Finally, the report highlights the importance of the role of the risk manager and lists the skills a risk manager must possess in order to succeed,

So, how can a company improve its risk management? It can:

• Have the risk manager take a strategic role in mobilizing the company against both insurable and uninsurable supply chain risks
• Implement supply chain risk management processes that are consistent across the enterprise and are designed end-to-end, including direct suppliers, critical raw material suppliers, and logistics partners.
• Embed risk management activities and responsibilities into existing supply chain processes and functions.
• Use a cross-functional team to manage supply chain risks.

Nothing revolutionary new, but nonetheless, an important reminder that supply chain risk management best practices are not very sophisticated and not something only major corporations can afford.

Conclusion

As mentioned, this report was written before the financial downturn, and in my opinion, in the three years since then it has not lost much of its timeliness and is as up to date now as it was then.

Read more: Marsh’ Risk Insights

FYI, Marsh is a leading insurance broker and risk adviser and has a dedicated website on all sorts of risk issues in business: Marsh Risk issues

Reference

Enslow, B. (2008) Stemming the Rising Tide of Supply Chain Risks: How Risk Managers’ Roles and Responsibilities Are Changing. Marsh Inc.

Download the report

• marsh.com: Stemming the tide of rising supply chain risks

Related link

• marsh.com: Insights in Supply Chain Risk

Related posts

• husdal.com: Turning a vulnerable supply chain into a valuable supply chain

Confirmed speakers so far:

• Supply Chain Council – European Chair (Event Chairman)
• Avnet – VP EMEA, Supply Chain
• Philips – CFO, Philips Supply
• Nokia – Director Corporate Security CEMEA & Global Supply Chain Security
• Johnson & Johnson – Procurement Director
• Electrolux – Demand Flow Director (tbc)

Conference Topics

Below are some of the topics the event will cover. For the investigative delegate, topics with links refer to related posts on husdal.com.

• The nature of supply chain risk management and emerging trends in the study and practice in this rapidly-developing field.
• Advances in the assessment and management of supply chain risk.
• The role of total cost analysis (design versus disruption) in effective supply chain risk strategies.
• Behavioral decision making as an enabler or impediment of effective risk management.
• Risk sharing in multi-firm risk management strategies.
• The role of supply chain risk management in global competitiveness (e.g., how effective supply chain risk management supports competitiveness-enhancing global trade patterns).
• Supply chain risk management in the face of interacting product design and logistics issues.
• Supply cost and performance risk as a result of deteriorating freight transportation infrastructure.
• Supply Chain Security for the Future
• How a standardized and proactive partnership between Customer and Logistics provider can mitigate the risk for both parties?!
• The nature and management of supply risk associated with freight capacity limitations.
• The logistical impact of rapid demand fluctuations and approaches to managing the associated supply risk.
• Assessing and effectively managing supply chain costs associated with logistics price volatility.
• Modeling the economic value of effective supply chain risk management.
• How to used VMI (Vendor Management Inventory) as a valid risk mitigation strategy?
• SC Risk Management: Sensing and Responding
• The need for SC visibility to provide the predictability necessary to effectively mitigate risk.
• Best practice methodologies for taking efficient risk mitigation decisions based on ROI

There should be something for everybody here. I found many topics that interest me…all, in fact.

Date and place

• 26 & 27 October 2011, Barcelona, Spain

Links

• scrm.iconeventsinternational.com: SCRM2011 (Conference website)
• linkedin.com: SCRM2011 group page on Linkedin

Related posts

• husdal.com: SCRM 2010

husdal.com is an offcial media partner for the 3rd Supply Chain Risk Management Seminar

More than meets the eye

To me, the major point of this article is not the case study of a Chinese manufacturer of Special Purpose Vehicles, but a cause and effect diagram showing how internal and external risk affect all processes in the supply chain. Even more useful is a set of nine criteria used for assessing the trustworthiness of a case study. Not to mention the 80 or so references in the bibliography, where – as always – I didn’t find articles that I thought they would have cited, but more importantly, I found lots of articles I had not heard of before. Add to that a very detailed description of how the case study was undertaken and the lessons learned from it, this article is nothing less than a cookbook in supply chain risk management case studies.

Cause and effect

One very illustrative figure in the article is a cause and effect diagram showing internal and external supply chain risk in a product design change perspective.

Although based on this particular case study, in my opinion this diagram is generally applicable to almost any manufacturing supply chain.

Internal risks are related to:

• R&D risk: The inability to quickly redesign the product to meet customer’s requirements for design change
  
• Production risk: The inability to quickly and efficiently produce the product with customer’s changed design
  
• Planning risk: The inability to maintain stable and consistent planning production planning and scheduling
• Information risk: The inability to share information among different supply chain roles and make it accurate, secure and visible across the entire supply chain
• Organizational risk: The inability to adjust the organization structure and operational processes to match the dynamic characteristics of customer demand

External risks are related to

• Policy risk: The inability to meet industry and government regulations, trade rules and legal standards
  
• Supply risk: The inability to guarantee supply availability, timeliness, cost and quality
  
• Delivery risk: The inability to deliver on time and to guarantee the logistic capability

Trustworthiness criteria

A very interesting selling point of this article is the use of trustworthiness criteria and how the case study meets these:

• Credibility: Extent to which the results appear to be acceptable representations of the data
• Transferability: Extent to which the findings from one study in one context will apply to other contexts
• Dependability: Extent to which the findings are unique to time and place; the stability or consistency of explanations
• Confirmability: Extent to which interpretations are a result of the participants and the phenomenon as opposed to researcher biases
• Integrity: Extent to which interpretations are influenced by misinformation or evasion of participants
• Fit: Extent to which findings fit with the substantive area under investigation
• Understanding: Extent to which participants buy into results as possible representations of their worlds
• Generality: Extent to which findings discover multiple aspects of the phenomenon
• Control: Extent to which organizations can influence aspects of the theory

I find this an incredibly useful set of criteria, perhaps a few too many, but nonetheless, I think these are the critera every case study should be judged against.

Critique

There is only one “negative” point to be made about this article: It’s a bit on the long and detailed side, too detailed perhaps in its description of the case study. However, I don’t see where it could have been shortened. Having said that, the positive takeaways from this article which I already mentioned in the beginning more than outweigh the fact that it does take a while to fully read this article. Kudos on an job well done.

Reference

Lin, Yong, & Zhou, Li (2011). The impacts of product design changes on supply chain risk: a case study International Journal of Physical Distribution and Logistics Management, 42 (2), 162-186 DOI:10.1108/09600031111118549

Author links

• linkedin.com: Yong Lin
• gre.ac.uk: Li Zhou

Related posts

• husdal.com: Product design and supply chain risk

Short and succinct

The survey targets professionals working in supply chain related functions and I hope that those readers of my blog can spare some minutes of their time and answer Mrunal’s survey on supply chain risk management.

The survey addresses SCRM along four dimensions:

• supply chain risk awareness
• supply chain risk identification
• risk assessment and evaluation
• risk mitigation approaches

It’s a short survey, and it shouldn’t take much time, probably much less than 10 minutes. I should add that the surey is meant for a worldwide audience, not just Singapore. Please follow the link below.

Survey highlights

What will be interesting to see is which of the following risks contained in the survey that has increased during the last 5 years:

• Globalization and outsourcing
• Economic uncertainty
• Technology advancements and shorter product life cycles
• Natural disasters
• High customer service level expectations

Another set of interesting answer may be found in the risk mitigation efforts they survey lists

• Performance evaluation for suppliers/ distributors
• Maintaining buffers to avoid operational risks
• Staff awareness training and empowerment
• Implementation of business continuity / contingency plans
• Insurance
• Financial instruments (forward buys, foreign currencies etc.)

Overall, I think this is a survey that captures the essence of supply chain risk management and is thus worth responding to.

Author link

• linkedin.com: Mrunal Korde

Related link

• freeonlinesurveys.com: Supply Chain Risk Management Survey

Related posts

• husdal.com: Measuring supply chain risk management

Are you too doing supply chain risk research?

Are you a student or researcher in supply chain risk or related subjects? I’d be more than happy to promote your research, surveys, survey results, reports and papers on this blog. Please get in touch and I’ll see how I can help you to spread the word about yourself and what you are doing.

Supply Chain Security Background

Security is a supply chain management issue that has grown in importance, particularly in recent years.  Most recent is the development of the  ISO 28002 Supply Chain Security and Resilience standard. An earlier paper by Williams, Lueg & LeMay from 2008 presents an overview and research agenda for supply chain security. Even earlier, the 2005 IBM white paper on Investing in Supply Chain Security highlights the benefits of improved security. In other words, supply chain security is  a matter that should not be overlooked, and today’s paper takes on a practical approach, describing five areas in the supply chain where security measures should be considered.

Supply Chain Security Initiatives

The paper also lists the different security initiatives that are currently in place by governments and international bodies and what these initiatives are meant to focus on:

• originating actor
  • International organizations, governmental agencies, private sector
• transport mode
  • air, sea, rail, road
• enforceability
  • mandatory or voluntary
• main goal
  • customs administration, reducing specific vulnerabilities, global security, technology development

There is a great variety of initiatives, all targeting supply chain security enhancement, but from different perspectives.

Supply Chain Security Measures

However, while the above initiatives overlap each other, which isn’t such a bad thing, they also leave gaps, which is much worse. Consequently, in order to overcome this, the paper lists these five categories of concern for supply chain security:

• Cargo Management
• Facility Management
• Information Management
• Human Resources Management
• Company Management Systems

and describes in detail what security measures that should be implemented:

Cargo Management – Protecting cargo during all steps of manufacturing, shipping and transport processes:

• Efficient prevention, detection and reporting of shipping process anomalies (routes and schedules continuous review; alerts management)
• Adequate inspections during the shipping process (in points where liability changes, to packaging materials and vehicles before being in contact with cargo).

Facility Management – Guaranteeing the security of the facilities where goods are manufactured and cargo is stored and handled.

• Optimal warehouse/terminal layout design (entry/exit controllability; clearly marked control areas; sufficient light conditions)
• Efficient facility monitoring (24hr camera system, security guards, filming activities of loading containers, picking ).

Information Management – Protecting critical business data and exploiting information as tool for detecting illegal activities and preventing security breaches.

• High protection of business information/data (management procedures and storing methods designed to protect information from unauthorized access and usage).
• Accurate and complete recordkeeping of shipping information for potential security audits (improved recordkeeping methods; quality control of records, error correction).

Human Resources Management – Guaranteeing trustworthiness and security awareness of all personnel with physical or virtual access to the supply chains.

• Professional employee hiring / exit process (background checks; interviews for leaving or fired employees).
• Efficient information dissemination process (internal and external publication of the company security policies).

Company Management Systems – “Building security” into internal and external organizational structures and company management systems, including supplier, partner and client management processes.

• Adequate business partners evaluation system (selection of low risk and high security compliant suppliers, clients and subcontractors).
• Complete company security management system (defined security processes, defined and controlled security indicators, internal and external audits).

The list and the examples above make this paper highly usable and practically applicable to the everyday concerns of supply chain managers. For the reader seeking more information, I highly recommend this extensive book on Security Risk Management, which among other things also has a chapter on supply chain risk.

Conclusion

This is a very practical paper. It shows in few words where security measures need to focus and it lists the different security initiatives that are currently in place by governments and international bodies.

Reference

Hintsa, J., Gutierrez, X., Wieser, P., & Hameri, A. (2009). Supply Chain Security Management: an overview International Journal of Logistics Systems and Management, 5 (3/4), 344-355 DOI: 10.1504/IJLSM.2009.022501

Author links

• linkedin.com: Juha Hintsa
• linkedin.com: Ximena Gutierrez
• linkedin.com: Philippe Wieser
• hec.unil.ch: Ari-Pekka Hameri

Download

• cross-border.org: Supply Chain Security Management
• epfl.ch: Ximena Gutierrez’ PhD

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