Introduction
Background
In industry, especially those industries moving towards longer supply chains (e.g. due
to outsourcing) and facing increasingly uncertain demand as well as supply, the issue
of risk handling and risk sharing along the supply chain is an important topic. The
leaner and more integrated supply chains get, the more likely uncertainties, dynamics
and accidents in one link affect the other links in the chain. Hence, the supply chain
vulnerability (Svensson, 2000; Christopher et al., 2002) increases, and it will increase
even more if companies, by outsourcing, have become dependent on other
organizations. A number of current business trends that increase the vulnerability
to risks in supply chains are:
. increased use of outsourcing of manufacturing and R&D to suppliers;
. globalization of supply chains;
. reduction of supplier base;
. more intertwined and integrated processes between companies;
. reduced buffers, e.g. inventory and lead time;
. increased demand for on-time deliveries in shorter time windows, and shorter
lead times;
. shorter product life cycles and compressed time-to-market;
IntroductionBackgroundIn industry, especially those industries moving towards longer supply chains (e.g. dueto outsourcing) and facing increasingly uncertain demand as well as supply, the issueof risk handling and risk sharing along the supply chain is an important topic. Theleaner and more integrated supply chains get, the more likely uncertainties, dynamicsand accidents in one link affect the other links in the chain. Hence, the supply chainvulnerability (Svensson, 2000; Christopher et al., 2002) increases, and it will increaseeven more if companies, by outsourcing, have become dependent on otherorganizations. A number of current business trends that increase the vulnerabilityto risks in supply chains are:. increased use of outsourcing of manufacturing and R&D to suppliers;. globalization of supply chains;. reduction of supplier base;. more intertwined and integrated processes between companies;. reduced buffers, e.g. inventory and lead time;. increased demand for on-time deliveries in shorter time windows, and shorterlead times;. shorter product life cycles and compressed time-to-market;
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