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I am blogging about current research in Supply Chain Risk Management. Risk Management in Supply Chains is getting more important due to globalization and shorter product life cycles. The goal of my blog is to summarize and analyze current literature of Supply Chain Management at the associated Risks.
Uncertainty can be categorized in continuous risk, more slowly changing patterns, and disruptions, which describe abrupt changes in a system.
Tomlin (2006) investigates the question which supply chain strategies perform best when dealing with the later.
Mitigation vs. Contingency Planning
From case studies analyzed in literature the author first deducts disruption management strategies used in practices. The summary can be seen in figure 1.
Figure 1: Strategies for Managing Disruptions (T........ Read more »
Tomlin, B. (2006) On the Value of Mitigation and Contingency Strategies for Managing Supply Chain Disruption Risks. Management Science, 52(5), 639-657. DOI: 10.1287/mnsc.1060.0515
Supply chains risks can also be analyzed in a specific industry context and this is exactly what Agrell et al. (2004) did with telecom supply chains. They used a three tier SC (2nd tier supplier, EMS, OEM) to include the selection, coordination and motivation of independently operating suppliers in the model.
In terms of risk handling and sharing the telco industry is to some extent unique as well; there are several possible complications, like
differing business logic in the different sta........ Read more »
Agrell, P., Lindroth, R., & Norrman, A. (2004) Risk, information and incentives in telecom supply chains. International Journal of Production Economics, 90(1), 1-16. DOI: 10.1016/S0925-5273(02)00471-1
Obstacles to Information Sharing
There are many obstacles to information sharing in a supply chain. Confidentiality is probably one of the biggest issues, but there are others not so obvious like antitrust regulations, the timeliness and accuracy of the provided information, differing technologies between the supply chain partners or a mismatch in the alignment of incentives. Therefore trust and cooperation become critical ingredients in a supply chain partnership.
Drivers of Information ........ Read more »
Aviation and steering a company can be viewed as somehow alike. At least this is the starting point for the article by Srinivas (2009) reviewed today.
But unlike companies a pilot has some advantages: a clear starting point, a given destination, he knows on which path to get there, he knows anytime if he is off course and he also knows how to get back on track.
Company as a staggering Airplane
On the other hand within a company you have a hard time defining those parame........ Read more »
Srinivas, S. (2009) Effective Performance Management . Journal of Business Logistics, 30(2), 85-100. info:/
I just stumbled upon one of the articles I already read about a year ago, shortly after I started my research. Beside indication of a future research agenda (see as well here), Jüttner et al. (2003) also explain some fundamental concepts of supply chain risk management.
How to get there?
Jüttner et al. decided to conduct a exploratory study with practitioner interviews and compare these results with a literature review. Four basic concepts for Supply Chain Risk Management evolved from th........ Read more »
Juttner, U., Peck, H., & Christopher, M. (2003) Supply Chain Risk Management: Outlining an Agenda for Future Research. International Journal of Logistics Research and Applications, 6(4), 197-210. DOI: 10.1080/13675560310001627016
Yet another case study. This time on strategic network design. Why? A major problem for businesses is to find the right strategy for a given situation. And "right" here means optimal (for a given KPI).
Research question might be: Are there general categories which can be used to make different decision situations comparable? And if yes, what would optimal strategies under these circumstances be?
Seuring (2009) tries to answer the first research question using case studies. From........ Read more »
Seuring, S. (2009) The product-relationship-matrix as framework for strategic supply chain design based on operations theory. International Journal of Production Economics, 120(1), 221-232. DOI: 10.1016/j.ijpe.2008.07.021
Setting up the right partnerships is hard to do. There are multiple levels to the decision with which companies to setup formal relations and how deep this relationship should be? Christopher and Jüttner (2000) develop a framework for managing partnerships. The full paper can be found here.
The authors use focus group interviews and multiple case studies to gain insights into practitioners' experiences.
Several factors are affecting an increasing focus on partnership manageme........ Read more »
Christopher, M., & Jüttner, U. (2000) Developing strategic partnerships in the supply chain: a practitioner perspective. European Journal of Purchasing , 6(2), 117-127. DOI: 10.1016/S0969-7012(99)00038-6
Everybody concerned with the task of developing risk mitigation strategies has a list in his mind of different factors influencing a company's exposure to risk and if you think about it: those factors are probably related.
Example: The number of suppliers for one component can have a huge impact on risk, but the necessity of a high number of (redundant) suppliers may itself be affected by the trust you built with your main supplier. Both trust and having multiple suppliers affect supply cha........ Read more »
Faisal, M. N., Banwet, D.K., & Shankar, R. (2006) Supply Chain Risk Mitigation: Modeling the Enablers. Business Process Management Journal, 12(4), 535-552. info:/
... and what to do about it.
Decisions within a company are not made on pure rational grounds. Assuming that there is the will to make a rational decision, nevertheless limits in information gathering, computing capabilities and memory lead to irrational conclusions (bounded rationality).
So the goal must be to enhance rational decision making and for this end Kaufmann et al. (2009) developed a framework to combat irrationality.
The authors use case studies to analyze companie........ Read more »
Kaufmann, L., Michel, A., & Carter, C.R. (2009) Debiasing Strategies in Supply Management Decision-Making. Journal of Business Logistics, 30(1), 85-106. info:/
It's not that there are no articles on supply chain risk management anymore. But after writing on current research in the last weeks (like the one on system failure here) I have been wondering more about the foundations of supply chain management in general. So I decided to review an article today on general supply chain management research, in this case a literature review by Sachan and Datta (2005).
The complete article can be found here.
The analysis is pretty straight forward,........ Read more »
Sachan, A., & Datta, S. (2005) Review of supply chain management and logistics research. International Journal of Physical Distribution , 35(9), 664-705. DOI: 10.1108/09600030510632032
Process orientation may or may not be a very hip topic right now. Nevertheless effective processes are a foundation for company performance. Lockamy, Childerhouse, Disney, Towill and McCormack (2008), analyze and explain the impact of process maturity and uncertainty on supply chain performance, the full paper can be obtained here free of charge.
In close collaboration with several businesses they conducted an empirical study on this topic, which I present in the following.
Business Proce........ Read more »
Lockamy, A., Childerhouse, P., Disney, S., Towill, D., & McCormack, K. (2008) The impact of process maturity and uncertainty on supply chain performance: an empirical study. International Journal of Manufacturing Technology and Management, 15(1), 12. DOI: 10.1504/IJMTM.2008.018237
I already reviewed some articles of Denis Towill primarily because he does some interesting research on simulation and supply chains, but also because I like his clear style in his articles.
In one of his early papers (1992) he teamed up with Naim and Wikner and described state of the art strategies to fight the bullwhip effect or as it is called in the paper by its older name: Industrial Dynamics.
I already described the causes of the bullwhip effect and how to measure........ Read more »
Towill, D., Naim, M., & Wikner, J. (1992) Industrial Dynamics Simulation Models in the Design of Supply Chains. International Journal of Physical Distribution , 22(5), 3-13. DOI: 10.1108/09600039210016995
In this article the authors, Giunipero and Eltantawy (2004) explore situational factors which contribute to the company's level of investment into risk management activities. These factors are:
degree of product technology
need for security
importance of the supplier
the purchasers’ prior experience
Risk Management Steps (Giunipero and Eltantawy, 2004)
Risk Buffering and Risk Management
The authors argue that in literature and practice alike risk buffering activities are used too often i........ Read more »
Giunipero, L., & Eltantawy, R. (2004) Securing the upstream supply chain: a risk management approach. International Journal of Physical Distribution , 34(9), 698-713. DOI: 10.1108/09600030410567478
Yet another paper on risk mitigation strategies. This time: How to reduce risks by improving confidence. You can find the complete paper of today in the web.
Lack of Confidence
The authors theorize that especially demand risk (volatility) has increased during the last years. With several SC concepts which are aimed to reduce the slack in the supply chain during the same period, overall risks in the SC have increased dramatically.
This leads to a lack of confidence by the managers responsi........ Read more »
Christopher, M., & Lee, H. (2004) Mitigating supply chain risk through improved confidence. International Journal of Physical Distribution , 34(5), 388-396. DOI: 10.1108/09600030410545436
In last weeks article (Hendricks and Singhal, 2005) I described the effects of supply chain glitches on supply chain performance. This week should be viewed an update to that.
Already in 2003 Hendricks and Singhal showed in an article the devastating effects supply chain glitches can have on the shareholder value. Up to that time a strong correlation between excellence in supply chain management and shareholder value has always been presumed. Many have alluded to the compelling bottom-line........ Read more »
Hendricks, K., & Singhal, V.R. (2003) The effect of supply chain glitches on shareholder wealth. Journal of Operations Management, 21(5), 501-522. DOI: 10.1016/j.jom.2003.02.003
At the moment I am focussing more on the interviews I am conducting for my research, so I am not reading as much anymore. I therefore try to select articles which are both useful for my research and my blog.
Today I read an article with the fuzzy title "Supply chain risk in turbulent environments — A conceptual model for managing supply chain network risk" by Peter Trkman and Kevin McCormack.
The authors present a framework for the identification and prediction of supply risk.
Conceptua........ Read more »
Trkman, P., & McCormack, K. (2009) Supply chain risk in turbulent environments—A conceptual model for managing supply chain network risk. International Journal of Production Economics, 119(2), 247-258. DOI: 10.1016/j.ijpe.2009.03.002
This is somewhat of the fifth contribution to my series on doctoral dissertations, apart from not being a doctoral thesis but a master thesis on Supply Chain Risk Management. Nonetheless, an immense effort and dedication is spent on these works only to find the results hidden in the libraries. So the goal is raise interest in the research of my peers.
Author / Topic
This thesis was written by Kenneth Kanyagui in 2010 as his master thesis at the Massachusetts Institute of Technology, Cambri........ Read more »
Kanyagui, K. (2010) Impact of Demographics on Supply Chain Risk Management Practice. Massachusetts Institute of Technology, Master Thesis. info:/
I already reviewed one of the articles of Zsidisin (Perception of Supply Risk). Today I had a look at an article about how the purchasing organization is involved in the supply chain risk management activities.
Zsidisin et al. did an exploratory study with semi-structured interviews with purchasing professionals in nine companies from the manufacturing industry. Semi-structured, open-ended interviews were employed to gain an understanding of how purchasing organizations c........ Read more »
Zsidisin, G., Panelli, A., & Upton, R. (2000) Purchasing organization involvement in risk assessments, contingency plans, and risk management: an exploratory study. Supply Chain Management: An International Journal, 5(4), 187-198. DOI: 10.1108/13598540010347307
Today I introduce you to the process of measuring agility in a supply chain. Agility is a major concept in the research of the last 10 years or so. I already have written some articles on this topic:
Design of Agile Supply Chains
Distribution Centers in Agile Supply Chain Design
Agile Supply Chains
Foundation for a Responsive Supply Chain
Consequently, the goal of today's article is to expand on those and define what are the key factors of SC agility and how it could be measured.
T........ Read more »
One of the most published supply risk researchers is George A. Zsidisin. In his 2003 article he describes the characteristics of inbound supply that affect the perception of risk.
The author defines supply risk as the potential occurrence of an incident associated with inbound supply from individual supplier failures or the supply market, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety.
He........ Read more »
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