Approach to defining/classifying Supply chain risk (C)
The terms ‘risk’ ‘uncertainty’ ‘disruption’ and ‘disaster’ are frequently and interchangeably used in supply
chains to describe the perceptions and interpretations of individuals and organizations. A general interpretation
of risk is influenced by the negative consequences of variation in expected outcomes, their impact and
likelihoods (March and Shapira, 1987). Risk events are also studied with core supply chain activities and
investigated with common business practices. Christopher and Peck (2004) relate the risks with the vulnerability
and likelihood of being lost or damaged. Interruptions to the flow of information, material and finance from the
original supplier to the end user which cause a mismatch between demand and supply are also considered as
risks (Juttner et al., 2003).
In line with the definitions discussed above and to relate the risks with supply chain functional aspects we
categorize the orientation of risk definitions related to operational characteristics (C.1), market characteristics
(C.2), business/strategic characteristics (C.3), product characteristics (C.4) and others (C.5). Table 2 shows the
risk characteristics and features in each of the categories.