1. Supply chain risk management
At a time when global competition is intensifying and supply chains are becoming longer and more complex, the likelihood of not achieving the desired supply chain (SC) performance increases, mainly due to the risk of SC failures. It is therefore essential that companies plan for disruptions and develop contingency plans as they design or redesign their supply chains. Firms need to understand supply chain interdependencies, identify potential risk factors, their likelihood, consequences and severities. Risk management action plans can then be developed to preferably avoid the identified risks, or if not possible, at least mitigate, contain and control them. The risk involved in supply chains, as well as the impact severity of supply chain failures, has been demonstrated recently by the recalls and subsequent lawsuits for toy cars (Story, 2007) and pet food (FDA, 2008). While risk may be associated with unacceptable products delivered from upstream, it can also involve risks associated with the environment, such as the impact of hurricanes Katrina and Rita (Devlin, 2005), or the current hijackings and robberies of vessels by pirates off the coast of Somalia (Peats, 2008).
1. Supply chain risk managementAt a time when global competition is intensifying and supply chains are becoming longer and more complex, the likelihood of not achieving the desired supply chain (SC) performance increases, mainly due to the risk of SC failures. It is therefore essential that companies plan for disruptions and develop contingency plans as they design or redesign their supply chains. Firms need to understand supply chain interdependencies, identify potential risk factors, their likelihood, consequences and severities. Risk management action plans can then be developed to preferably avoid the identified risks, or if not possible, at least mitigate, contain and control them. The risk involved in supply chains, as well as the impact severity of supply chain failures, has been demonstrated recently by the recalls and subsequent lawsuits for toy cars (Story, 2007) and pet food (FDA, 2008). While risk may be associated with unacceptable products delivered from upstream, it can also involve risks associated with the environment, such as the impact of hurricanes Katrina and Rita (Devlin, 2005), or the current hijackings and robberies of vessels by pirates off the coast of Somalia (Peats, 2008).
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