Using inventory to mitigate the Ripple effect

A single disruption at a single location within a supply chain may effect many other locations of a the supply chain through the Ripple effect (Ivanov et al., 2014). In this article we focus on the role of inventory to mitigate the Ripple effect. Our main finding states that operational decisions (such as safety inventory level or service level) are highly interrelated with decisions that mitigate the Ripple effect (such as a high Resilience of the supply chain). Specifically, we find: 1) An increase in demand volatility may lead a firm to invest more in operational safety stock as well as in dedicated Risk Mitigation Inventory. 2) A high service level and high resilience of a supply chain can be conflicting objectives

An Optimized Resource Allocation Approach to Identify and Mitigate Supply Chain Risks using Fault Tree Analysis

Low volume high value (LVHV) supply chains such as airline manufacturing, power plant construction, and shipbuilding are especially susceptible to risks. These industries are characterized by long lead times and a limited number of suppliers that have both the technical know-how and manufacturing capabilities to deliver the requisite goods and services. Disruptions within the supply chain are common and can cause significant and costly delays. Although supply chain risk management and supply chain reliability are topics that have been studied extensively, most research in these areas focus on high vol- ume supply chains and few studies proactively identify risks. In this research, we develop methodologies to proactively and quantitatively identify and mitigate supply chain risks within LVHV supply chains. First, we propose a framework to model the supply chain system using fault-tree analysis based on the bill of material of the product being sourced. Next, we put forward a set of mathematical optimization models to proactively identify, mitigate, and resource at-risk suppliers in a LVHV supply chain with consideration for a firm’s budgetary constraints. Lastly, we propose a machine learning methodology to quan- tify the risk of an individual procurement using multiple logistic regression and industry available data, which can be used as the primary input to the fault tree when analyzing overall supply chain system risk. Altogether, the novel approaches proposed within this dissertation provide a set of tools for industry practitioners to predict supply chain risks, optimally choose which risks to mitigate, and make better informed decisions with respect to supplier selection and risk mitigation while avoiding costly delays due to disruptions in LVHV supply chains

RISKY BUSINESS: AN ANALYTICAL APPROACH TO SERVICES SUPPLY CHAIN RISK MANAGEMENT

Cyber threats, economic upheavals, and environmental disasters threaten global supply chains. These vulnerabilities impact the readiness of U.S. forces and their capacity to defend the nation. Consumers and the government need a framework for assessing vulnerabilities and establishing effective supply chains. MITRE’s System of Trust (SoT) serves as a framework to measure trustworthiness and identify risk factors affecting their supply chain security. The SoT develops a taxonomy of risk factors, defines risk measures attributable to those risk factors, and creates a framework for organizations to objectively quantify supply chain risk. Our study validates the services risk factors and identifies techniques and best practices to mitigate risk unique for services. Our research questions are: What are the primary indicators of supply chain risk, and which are unique to Department of Defense services? Furthermore, what are the best practices for preventing, mitigating, and responding to service-specific supply chain risks? This research draws on qualitative interview data to obtain insight into the services aspect of supply chains, systematically evaluate MITRE’s risk factors and risk measures, and identify gaps in available data. Our research results in a Services Supply Chain Risk Management Framework that managers should use to evaluate and mitigate risks within their supply chains.Captain, United States Air ForceCaptain, United States Air ForceApproved for public release. Distribution is unlimited

Strategies to Minimize the Impact of Supply Chain Risk on Business Performance

The exposure of companies to turbulence, uncertainty, and vulnerability in their supply chain results in supply chain disruption with an estimate cost of $10 million for each supply chain disruption. The purpose of this case study was to explore the strategies supply chain managers use to mitigate supply chain disruption on business performance in a pharmaceutical company in Maryland. Contingency theory of fit formed the conceptual framework for this study. Participant perceptions were elicited in interviews with 11 supply chain managers regarding strategies to mitigate risks associated with supply chain disruptions. Data from interviews and supporting documents were processed and analyzed using data source triangulation to discern emergent themes. Three main themes emerged: (a) supply chain design, planning, and forecasting; (b) flexible and multiple supplier base; and (c) resource allocation and demand management. The implications for positive social change include the potential of reducing supply chain risk, which could lead to lower prices of products for consumers, increased stakeholder satisfaction, and a higher standard of living

Analyzing the Risk Factors of Supply Chain Management in Indian Manufacturing Organizations

Today organizations of any magnitude have heavily integrated supply chain. The supply chain management consists of all parties involved, directly or indirectly in fulfilling customer request. There is an immense growth which has expanded from the traditional point of view as not only of physical distribution of materials but also to services. Implementing supply chain risk management has been troubleshooting in many organizations. In practice assessing risk management in supply chain is rather underdeveloped and often dealt with informal and reactive manner. As risk management issues today is subjected to substantial research and the organizations are trying to mitigate the risk issues so as to maintain the smooth operation of supply chain. The purpose of this paper is to identify and prioritize the risk factors in context to supply chain management of Indian manufacturing organizations. The research presented here is specifically targeted to Indian manufacturing organizations which are managing the supply chain operations. This paper deals with the risk issues and thus empirically assesses which risk factors are most influencing one in supply chain operations which must be given careful attention

Risk Mitigation in Supply Chain Digitization: System Modularity and Information Technology Governance

Firms face significant risk when they adopt digital supply chain systems to transact and coordinate with their partners. Drawn upon modular systems theory, this study proposes that system modularity mitigates the risk of adopting digital supply chain systems and therefore motivates firms to digitize more of their supply chain operations. The study theorizes how the risk-mitigating effect of system modularity can be enhanced by the allocation of decision rights to the IT (information technology) unit. The main logic is that IT managers with more domain IT knowledge can better utilize their knowledge in decision making to achieve effective system modularity. We tested these theoretical propositions using a survey study of Chinese companies and found empirical support. We also found that the allocation of decision rights to the IT unit does not directly mitigate the perceived risk of digital supply chain systems, which highlights the role of decision allocation to the IT unit as a key moderator in risk mitigation. The study generates theoretical and practical implications on how IT governance and system modularity may jointly mitigate risk and foster supply chain digitization

Internal Process Risk Management: A Proposed Conceptual Framework for Electronic Design Industry Process Gap

Risk management is a crucial element in every industrys operational supply chain as the impact of turbulence in the form of uncertainty is drastic. Many researchers have published theories and frameworks defining Supply Chain Risk Management (SCRM) as there are gaps in the application definition gap, process gap, and methodology gap. This paper identifies the process gap in electronic design industry and proposes a modified framework adopted from Sodhi, Son and Tang (2012) to contribute in formulating a framework to define, operationalize and mitigate internal process supply chain risk management. The purpose of this paper is twofold. First, we categorize the detailed review with electronic design internal supply chain process. Second, we analyze and develop a framework with expected results upon completing the SCRM process throughout each internal process. Keywords Risk management, process gap, micro risk, uncertainty, supply chain risk managemen

Do risk events increase supply chain uncertainty? A case study

Supply chain uncertainty has become an important area of research, and it is crucial for many firms, and especially so for global firms. Decision makers find it difficult to make decisions due to lack of transparency in the supply chain and the impact of possible risk events. This paper aims to approach this topic by developing a conceptual model to assist logistics and supply chain managers to improve supply chain effectiveness by analysing risk events. To this end we use a case study based on a set of interviews with agents of a German firm and some of its suppliers from India, China and Europe, which generates insights uncaptured in previous research in the area. The main findings answer questions such as: 1. How to build an agile supply chain strategy with rapid planning and integrated execution in different stages?; 2. How to identify and avoid risk events as they increase the supply chain uncertainty and are multiplied when interrelated risk events occur simultaneously; 3. Can supply chain uncertainty be reduced by determining the degree of flexibility required to mitigate risk effects, reducing supply chain uncertainty and increasing the firm’s dynamic capabilities?

Strategies to Mitigate Supply Chain Disruption Risks

Businesses with global supply chains typically have a minimum of 1 interruption to their supply chain annually, which can decrease profitability and affect overall company performance. The purpose of this multiple case study was to explore strategies personal care business supply chain managers used to mitigate supply chain disruption risk. The targeted population was 9 supply chain managers working in 5 different Fortune 500 consumer packaged goods personal care companies in the northeastern United States who have successfully used strategies to mitigate supply chain disruptions. Corporate risk management was used as the conceptual framework of the study to determine how company leaders plan for supply chain disruptions and how leaders prioritize and resource implementation and assessment of these plans. Data collection included semistructured interviews, with review of each company\u27s documents as the secondary source of data. Data were analyzed using thematic analysis. Two main themes emerged: identification of a qualified alternative supplier is a common strategy in supply chain disruption mitigation plans, and business top management support is essential in the execution of supply chain disruption plans and strategies. Results of this study might contribute to social change by empowering supply managers to make alternative choices relative to suppliers that will make products more affordable to consumers. An empowered supply management team leads to high return of investments for companies, which can support employment and additional tax revenue to support social programs

Do risk events increase supply chain uncertainty? A case study

Supply chain uncertainty has become an important area of research, and it is crucial for many firms, and especially so for global firms. Decision makers find it difficult to make decisions due to lack of transparency in the supply chain and the impact of possible risk events. This paper aims to approach this topic by developing a conceptual model to assist logistics and supply chain managers to improve supply chain effectiveness by analysing risk events. To this end we use a case study based on a set of interviews with agents of a German firm and some of its suppliers from India, China and Europe, which generates insights uncaptured in previous research in the area. The main findings answer questions such as: 1. How to build an agile supply chain strategy with rapid planning and integrated execution in different stages?; 2. How to identify and avoid risk events as they increase the supply chain uncertainty and are multiplied when interrelated risk events occur simultaneously; 3. Can supply chain uncertainty be reduced by determining the degree of flexibility required to mitigate risk effects, reducing supply chain uncertainty and increasing the firm’s dynamic capabilities?