143 posts · 105,937 views
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.
Daniel Dumke
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- November 29, 2010
- 09:48 AM
- 999 views
Level of Detail in a Simulation Model
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
After the last more general entries on managers perception of risk and measuring SC performance I wanted to make a detour back to the basics.
Simulation is one of the tools, which can be used for analyzing supply chain dynamics, optimization and to support corporate decision making.
One major question when starting a supply chain model has always been what level of detail should you choose? Someone could start with a single worker in an agent based simulation model and continue with the machine he is operating, but when the goal is to gain insights about the interaction between your company and your closest competitors this might be too much information.
To get a better grasp on this topic I read "The impact of different levels of detail in manufacturing systems simulation models" by J.F. Persson (Translation). Continue reading "Level of Detail in a Simulation Model"
... Read more »
Persson, J. F. (2002) The impact of different levels of detail in manufacturing systems simulation models. Robotics and Computer-Integrated Manufacturing, 18(3-4), 319-325. DOI: 10.1016/S0736-5845(02)00024-8
- November 24, 2010
- 11:49 AM
- 1,006 views
Supply Chain Risk Management Dissertations (Supply Chain Design: Capacity, Flexibility and Wholesale Price Strategies)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
This is the forth contribution to my series on doctoral dissertations on Supply Chain Risk Management. 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 dissertation was written by Brian Tomlin in 1999 as his doctoral thesis at the Massachusetts Institute of Technology, Cambridge, USA. It can be downloaded here at his homepage at his current employer (Tuck School of Business at Dartmouth). The title is:
Supply Chain Design: Capacity, Flexibility and Wholesale Price Strategies Continue reading "Supply Chain Risk Management Dissertations (Supply Chain Design: Capacity, Flexibility and Wholesale Price Strategies)"
... Read more »
Brian T. Tomlin. (2000) Supply Chain Design: Capacity, Flexibility and Wholesale Price Strategies. Massachusetts Institute of Technology, Dissertation. info:/
- November 22, 2010
- 07:47 AM
- 817 views
Measuring Supply Chain Performance
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Last week I conducted another Interview for the empirical part of my research. And we also discussed how to measure performance within the SC. As it turns out, multiple measures, namely service, cost, working capital are used. Sadly in literature many authors still focus on a single measure only and I wanted to know more about it. So I read an article by B. Beamon (Measuring Supply Chain Performance) to get an overview over performance measures used and how to select the right one(s).
History of Supply Chain Performance Measures
Supply chains consist of many different companies and within those, various functions. So first measures have relied on characterizing individual systems like production, distribution, or inventory management. In literature the measures have often been categorized into aspects of quality, time, flexibility, and cost.
But most often cost is used as an only measure or cost and another measure for customer responsiveness is applied. Other more qualitative measures, like customer satisfaction or concerning risk management, are seldom used due to their restricted applicability in quantitative models.
Measures are generally thought of being effective if the following characteristics are fulfilled:inclusiveness (measurement of all pertinent aspects)universality (allow for comparison under various operating conditions)measurability (data required are measurable) andconsistency (measures consistent with organization goals) Continue reading "Measuring Supply Chain Performance"
... Read more »
Beamon, B. (1999) Measuring supply chain performance. International Journal of Operations , 19(3), 275-292. DOI: 10.1108/01443579910249714
- November 17, 2010
- 07:32 AM
- 895 views
Managing Information Risks
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
At the moment I am looking for gaps in my reading up to now and I found that I have not read much about information risks. It also seems that those risks are not (yet?) in focus, neither in research nor business. So I was happy to find "Information risks management in supply chains: an assessment and mitigation framework" by Faisal, Banwet and Shankar.
Topic / Methodology
The purpose of the paper is to provide a framework for the management of information risks, and to device a way to measure them. The authors therefore use graph theory and interpretive structural modeling to model the interrelations between risks and their drivers and develop a framework for mitigating the risks. They start categorizing information risks as follows:Information security / breakdown risks (I1)forecast risks (I2)intellectual property rights risks (I3)IT/IS outsourcing risks (I4)Figure 1: Model for Information Risk Mitigation in a Supply Chain (Faisal et al. 2007) Continue reading "Managing Information Risks"
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Faisal, M., Banwet, D., & Shankar, R. (2007) Information risks management in supply chains: an assessment and mitigation framework. Journal of Enterprise Information Management, 20(6), 677-699. DOI: 10.1108/17410390710830727
- November 12, 2010
- 06:37 AM
- 513 views
Risk from the Managers Perspective (Part 2)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Today I will write about the implications of the risk understanding by managers covered in Part 1 of this series. Continue reading "Risk from the Managers Perspective (Part 2)"
... Read more »
March, J., & Shapira, Z. (1987) Managerial Perspectives on Risk and Risk Taking. Management Science, 33(11), 1404-1418. DOI: 10.1287/mnsc.33.11.1404
- November 10, 2010
- 03:43 AM
- 723 views
Risk from the Managers Perspective (Part 1)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Today I finally read one of the most cited articles on subjective risk in general. In 1987 March and Shapira set out to shake up the existing theories on the perception and processing of risks by managers. Accordingly, they aggregated the information from various surveys on this topic.
The article is called "Managerial Perspectives on Risk and Risk Taking" and it can be downloaded here as PDF and I really recommend reading it.
In the first part I will analyze major empirical findings on how managers perceive risks, the second part will cover the implications from that and will be published this Friday.
Continue reading "Risk from the Managers Perspective (Part 1)"
... Read more »
March, J., & Shapira, Z. (1987) Managerial Perspectives on Risk and Risk Taking. Management Science, 33(11), 1404-1418. DOI: 10.1287/mnsc.33.11.1404
- November 3, 2010
- 05:55 AM
- 924 views
Organizational Risk Perception and Reduction
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Today I read a rather old article from 1995 about "Organizational Risk Perception and Reduction: A Literature Review" by Vincent-Wayne Mitchell, now at the Cass Business School in London. I present it here since I think most of the concepts and strategies are still valid.
Objective and Methodology
The objective of Mitchell was to show the status of current research on how risks are perceived in organizational buyer behavior and what can be done to reduce these risk. He therefore conducts a review of the current literature.
Figure 1: Factors affecting organizational buyers' risk perception (click to enlarge; Mitchell 1995)
Continue reading "Organizational Risk Perception and Reduction"
... Read more »
Mitchell, V. (1995) Organizational Risk Perception and Reduction: A Literature Review. British Journal of Management, 6(2), 115-133. DOI: 10.1111/j.1467-8551.1995.tb00089.x
- October 27, 2010
- 12:17 PM
- 861 views
The Supply Chain Uncertainty Circle
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
How to shrink the "Uncertainty Circle" is the topic of a paper I read today. It has been written by Rachel Mason-Jones and Denis R. Towill and can be downloaded here free of charge.
This article from 1998 focusses on how to shrink the uncertainty within a supply chain and therefore improve performance, since we believe that those companies which cope best with
uncertainty, are most likely to produce internationally
competitive bottom-line performance.
This hypothesis is also backed by several other authors like, Craighead et al. (2009) or Hendricks and Singhal (2005).
Within the product delivery process for a single company, the authors find four causes of uncertainty: supply side, manufacturing processes, control systems and demand side (see figure 1).Causes of Supply Chain Uncertainty (Mason-Jones and Towill 1998) Continue reading "The Supply Chain Uncertainty Circle"
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Mason-Jones, Rachel, & Towill, Denis R. (1998) Shrinking the Supply Chain Uncertainty Circle. IOM Control, 24(7), 17-22. info:/
Craighead, C., Hult, G., & Ketchen Jr., D. (2009) The effects of innovation–cost strategy, knowledge, and action in the supply chain on firm performance. Journal of Operations Management, 27(5), 405-421. DOI: 10.1016/j.jom.2009.01.002
- October 25, 2010
- 06:23 AM
- 932 views
Supply Chain Crisis Management
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Supply Chain Risk Management is one way to look at risks within a company (and beyond). But there are broader and more narrow disciplines as well, with Business Continuity on the one end and Supply Chain Crisis Management on the other.
I wanted to get an overview of current research on Supply Chain Crisis Management first, so today I explore "Managing supply chains in times of crisis: a review of literature and insights" by Natarajarathinam, Capar and Narayanan. The article is focussed on providing the researcher with a current state of supply chain crisis management, but practitioners will probably find the "Practical Implications of SC Crisis Management" in figure 3 (below) useful.
Crisis
So how do crises fit into the Supply Chain Risk Management landscape? The authors cite Merriam-Webster on crisis, where it is defined as: an unstable or crucial time or state of affairs in which a decisive change is impending; especially: one with the distinct possibility of a highly undesirable outcome. So in a supply chain context, a crisis is comparable to a disruption where the flow of goods, information or money is interrupted.
Methodology
The authors used an review of peer-reviewed articles as a basis for their work. For their sample they were using keywords like "crisis", "risks", "disaster", "uncertainty" and more. This search resulted in 118 relevant articles published between early articles before 1990 and 2008.
Figure 1:Published Articles on Supply Chain Crisis Management by Year (Natarajarathinam et al., 2009) Continue reading "Supply Chain Crisis Management"
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Natarajarathinam, M., Capar, I., & Narayanan, A. (2009) Managing supply chains in times of crisis: a review of literature and insights. International Journal of Physical Distribution , 39(7), 535-573. DOI: 10.1108/09600030910996251
- October 21, 2010
- 05:42 AM
- 1,069 views
Supplier Selection in a Turbulent World
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
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.
Conceptual Framework for assessing Supplier Risk (Trkman and McCormack 2009) Continue reading "Supplier Selection in a Turbulent World"
... 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
- October 19, 2010
- 04:39 AM
- 833 views
The Impact of Supply Chain Strategy on Shareholder Value
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
I had this article marked for some time now and I finally got to read it. It describes the connection between Shareholder Value and the concept of Value Based Management (VBM) and Supply Chain Strategy.
Continue reading "The Impact of Supply Chain Strategy on Shareholder Value"
... Read more »
Christopher, M., & Ryals, L. (1999) Supply Chain Strategy: Its Impact on Shareholder Value. The International Journal of Logistics Management, 10(1), 1-10. DOI: 10.1108/09574099910805897
- October 13, 2010
- 09:28 AM
- 715 views
Supply Chain Risk Management Dissertations (No. 3)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
This is the third contribution to my series on doctoral dissertations on Supply Chain Risk Management. 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 dissertation was written by Stephanie Freiwald in 2005 as her doctoral thesis at the University of Bochum. It was published by Peter Lang, Frankfurt a.M. and can be ordered here from amazon.de or your local library. The title can be translated as:
Supply Chain Design - Robust Planning with differentiated Supplier Selection Continue reading "Supply Chain Risk Management Dissertations (No. 3)"
... Read more »
Stephanie Freiwald. (2005) Supply Chain Design - Robuste Planung mit differenzierter Auswahl der Zulieferer. Peter Lang, Frankfurt a.M., Dissertation. info:/
- October 13, 2010
- 09:28 AM
- 626 views
Supply Chain Risk Management Dissertations (Supply Chain Design - Robust Planning with differentiated Supplier Selection)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
This is the third contribution to my series on doctoral dissertations on Supply Chain Risk Management. 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 dissertation was written by Stephanie Freiwald in 2005 as her doctoral thesis at the University of Bochum. It was published by Peter Lang, Frankfurt a.M. and can be ordered here from amazon.de or your local library. The title can be translated as:
Supply Chain Design - Robust Planning with differentiated Supplier Selection Continue reading "Supply Chain Risk Management Dissertations (Supply Chain Design - Robust Planning with differentiated Supplier Selection)"
... Read more »
Stephanie Freiwald. (2005) Supply Chain Design - Robuste Planung mit differenzierter Auswahl der Zulieferer. Peter Lang, Frankfurt a.M., Dissertation. info:/
- October 11, 2010
- 04:27 AM
- 845 views
Supply Chain Integration as major Value Driver
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
"Arcs of integration" is a concept developed by Frohlich and Westrook (2001) which describes the degree of integration of suppliers and customers within a Supply Chain.Arcs of Supply Chain Integration (Frohlich and Westrook, 2001)
Methodology
This concept was developed within the scope of an international study on supply chain strategies. In this survey the authors used the mail survey research method to collect over responses form over 700 companies from all over the world (Asia/Pacific: 26%, Europe: 50%, North America: 14%, South America: 10%). Data was gathered not only on the supply chain integration of each respondent (eg. shared access to planning systems, shared production planning, knowledge of inventory levels), but also on performance parameters on each company (eg. market share, profitability, return on investment).
Continue reading "Supply Chain Integration as major Value Driver"
... Read more »
Frohlich, M., & Westbrook, R. (2001) Arcs of integration: an international study of supply chain strategies. Journal of Operations Management, 19(2), 185-200. DOI: 10.1016/S0272-6963(00)00055-3
- September 22, 2010
- 09:06 AM
- 881 views
Simulation of Supply Chain Disruptions
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Still too many cooperations do not analyze their supply networks using consistent and scientifically proven methods. Some already do. One case of a company (ABC) is described below.
Goals and Methods
ABC company wanted to know more about their exposure to supply chain disruptions originating from their own plants but also the connected transportation links, suppliers and customers. Specifically, the goals were:Assess the current level of supply chain disruption risk in the systemTest different mitigation strategiesProvide a tool that can be used in the case of a disruption to validate recovery steps before putting them into actionIdentify redundancy in the system that can be removed without affecting the risk level
The authors therefore designed a supply chain model for two major products (one high, one low volume product) using discrete event simulation in Arena, one of the most often used simulation environments. To obtain distributions for the resulting performance measures the authors take advantage of Monte Carlo simulation using an excel tool called @Risk. Simulation
The demand and risk patterns were evaluated using available data and expert interviews. In the second step mathematical distribution functions were adjusted to fit the empirical observations / forecast to input those into the model.
The company was very concerned with the effects of the disruptions on their customer service, so the Fill Rate was chosen as the relevant performance measure.
Results
The model was analyzed in two ways: First in an steady state analysis the current risk levels in the model were analyzed. In a second step the model was adjusted, by implementing one of the following strategies: implementation of inventory control and improvement of sourcing.
Even though only one simple measure was used, the ABC company was able to gain valuable insights into their supply chain.
Status Quo: All runs of the risk model experienced at least one week where 0% of the incoming orders were satisfied for the available inventory levels (two to six weeks)Mitigation Strategies: The output clearly showed that reducing response times or increasing capacity of back-up methods were able to reduce the impact of a disruption and speed recovery.ABC realized that they lack a database with historic distribution information for disruptionsThere were no formal strategic-level mitigation proceduresRisk exposure is very dependent on the current state of the models parameters (eg. if a disruption occurs in a low inventory state, recovery lasts much longer)The most important result is that the process of implementing such a simulation model can help the company think about supply chain disruptions more intensively and such a project can be used as a starting point for systematically documenting the risks and contingency plans in case of a disruption.
Reference
Schmitt, Amanda J., & Singh Mahender (2009). Quantifying Supply Chain Disruption Risk Using Monte Carlo and Discrete-Event Simulation Proceedings of the 2009 Winter Simulation Conference, 1237-1248
... Read more »
Schmitt, Amanda J., & Singh Mahender. (2009) Quantifying Supply Chain Disruption Risk Using Monte Carlo and Discrete-Event Simulation. Proceedings of the 2009 Winter Simulation Conference, 1237-1248. info:/
- September 14, 2010
- 07:36 PM
- 795 views
Supply Chain Risk Management Dissertations (Process oriented Risk Management of Product Risks)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
This is the second contribution to my series on doctoral dissertations on Supply Chain Risk Management. 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 their research.
Author / Topic
This dissertation was written by Jörn Dahmen 2009 as his doctoral thesis at the RWTH, Aachen (one of the most renowned Technical Universities in Germany). It was published by Shaker, Aachen and can be ordered here from amazon.de or your local library. The title can be translated as:
Process oriented Risk Management of Product Risks Summary
The dissertation is a short read with 140 pages. The goal of this dissertation is to create a framework for the management of product risks. Product risks combine the risks associated with the product. Nowadays the risks associated with the product-customer relationship are usually highly regulated by law (product liability), so increasing product complexity can lead to higher product risks.
The framework is straight forward and consists of three elements: Risk management elementscontaining the risk policy, analysis, measures and monitoringDrill down viewThe aforementioned risk management process has to be repeatedly executed for different levels of detail in the company.ExecutionThe measures have the be elaborated in teams and executed to be effective.
The author then tests his framework at three different companies (automobile, turbine and cable car producer) and provides evidence that his framework is effective in managing product risks.
Conclusion
Jörn Dahmen delivers a well structured work on product risks and its management. The focus the dissertation sheds light on an often neglected risk. The case studies were interesting and supported the study very well. Caveat: I was missing some really new aspects on the differences of managing product risks.
Reference
Dahmen, Jörn (2002). Prozeßorientiertes Risikomanagement zur Handhabung von Produktrisiken Shaker, Aachen, Dissertation
... Read more »
Dahmen, Jörn. (2002) Prozeßorientiertes Risikomanagement zur Handhabung von Produktrisiken. Shaker, Aachen, Dissertation. info:/
- September 12, 2010
- 07:25 PM
- 983 views
Foundation for a Responsive Supply Chain
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
In the following I summarize the major points of the article "Responsive supply chain: A competitive strategy in a networked economy" by Gunasekaran, Lai and Cheng (2008).
Responsive Supply Chain (RSC)
The authors define a RSC to contain both aspects of Agile Manufacturing and Supply Chain Management. They argue, that both complement each other in the objective to improve organizational competitiveness.
The concept of SCM, Agile manufacturing and RSC can be compared as follows:
Comparison of Supply Chain Concepts (Source: Gunasekaran et al. 2008) Building Blocks
The framework consists of these major building blocks:Strategic PlanningFocus on Strategic Alliances, global sourcing and TechnologyVirtual EnterpriseThe framework is especially based on the concept of the Virtual Enterprise, where companies specialize their core competencies and focus on their network of supply and demand side partner companies. To achieve this the planning processes have to be intensively IT supported.Knowledge and IT managementAutomation and IT play a dominant role in the development of a physically distributed or virtual enterprise. The most important elements for IT support are: strategy formulation, tactical management, operations control and systems
Framework
According to the authors "The proposed framework can be employed as a competitive strategy in a networked economy in which customized products/services are produced with virtual organizations and exchanged using e-commerce."
Framework for a Responsive Supply Chain (Source: Gunasekaran et al. 2008)
Conclusion
I found one major drawback of this paper: The presentation is not what you should expect from an A-journal paper. Sometimes the content of the paragraphs does not match the caption (Caption: Strategic Planning, Content: the virtual enterprise), furthermore the literature review feels like a succession of short abstracts of papers, without obvious connection between each of them.
Reference
Gunasekaran, A., Lai, K., & Cheng, T. C. E. (2008). Responsive supply chain: A competitive strategy in a networked economy☆ Omega, 36 (4), 549-564 DOI: 10.1016/j.omega.2006.12.002
... Read more »
Gunasekaran, A., Lai, K., & Cheng, T. C. E. (2008) Responsive supply chain: A competitive strategy in a networked economy☆. Omega, 36(4), 549-564. DOI: 10.1016/j.omega.2006.12.002
- September 5, 2010
- 09:19 PM
- 892 views
Theory about Social Structures
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Today I would like to introduce a theory developed by Giddens in 1988 about social structures and how it can be used to analyze theories in Supply Chain Management.
Continue reading "Theory about Social Structures"
... Read more »
Pfohl, Hans-Christian, Elbert, Ralf, & Gallus, Philipp. (2007) Implementierung interorganisationaler Managementinstrumente in logistischen Netzwerken: Strukturationstheoretische Analyse der Besonderheiten bei der Implementierung der CargoScoreCard im Kombinierten Verkehr. Logistikmanagement: Analyse, Bewertung und Gestaltung logistischer Systeme, 231-262. info:/
- September 1, 2010
- 02:05 AM
- 900 views
Segmenting Supply Chain Strategies
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
For researchers and practitioners alike it is important to differentiate supply chain strategies.
Introduction
Not only Fisher (1997) showed, that there is no one-fits-all supply chain. But what are the criteria for should be used for supply chain segmentation?
Fisher focusses on on the product only, and he concludes, that a standard/functional product should be processed by a lean supply chain and innovative products by agile supply chains.
Continue reading "Segmenting Supply Chain Strategies"
... Read more »
Brun, A., & Castelli, C. (2008) Supply chain strategy in the fashion industry: Developing a portfolio model depending on product, retail channel and brand. International Journal of Production Economics, 116(2), 169-181. DOI: 10.1016/j.ijpe.2008.09.011
Fischer, Marshall L. (1997) What is the Right Supply Chain for Your Product?. Harvard Business Review, 105-116. info:/
- August 30, 2010
- 02:37 AM
- 877 views
Supply Chain Risk Management Dissertations (No. 1)
by Daniel Dumke in SCRM Blog - Supply Chain Risk Management
Today I start an irregular series on doctoral dissertations on Supply Chain Risk Management. An immense effort and dedication is spent on these works only to find the results hidden in libraries. So the goal is raise interest in their research.
Author / Topic
The first dissertation was written by Ingo Schneider in 2009 as his doctoral thesis at the Helmut Schmidt University in Hamburg, Germany. It was published by Shaker, Aachen and can be ordered here from amazon.de or your local library. The title translates in:
Risk as Strategic Part of the Supply Chain Design: Analysis and Case Study in the German Automobile Industry Continue reading "Supply Chain Risk Management Dissertations (No. 1)"
... Read more »
Schneider, Ingo. (2009) Die Risikobetrachtung in der Beschaffung als strategische Komponente im Supply-Chain-Design : eine Analyse am Beispiel Karosserieblechteile in der Automobilindustrie. Shaker, Aachen. info:/
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