SUPPLY CHAIN RISK MANAGEMENT

Supply Chain Risk Management

[Name of Student]

[Name of Instructor]

Table of Contents

Chapter 1: Intrduction4

Background of the Study5

Problem Statement6

Purpose of the Study6

Significance of the Study7

Structure of the Paper7

Chapter 2: Literature Review8

Supply Chain Management8

Risk and uncertainty9

The stages of the risk management process11

Ericsson and the sub-supplier accident12

The Albuquerque accident13

Chapter 3: Methodology15

Qualitative Research15

Research Method16

Data Collection18

Literature Selection Criteria19

Search Technique19

Keywords Used19

Theoretical Framework20

Ericsson's current supply chain risk management approach21

Organizational principles and responsibility21

Risk identification process24

Risk treatment/management28

Risk monitoring and follow-up29

Incident handling and business continuity planning29

The supply chain approach to risk management and business continuity management31

Business impact of improved supply chain risk management33

Chapter 5: Conclusion35

Contribution to Future Research37

Managerial Implications38

Future Research Guidelines41

References43

Appendix A: Figures and Tables48

Supply Chain Risk Management

Chapter 1: Intrduction

Supply chain risk management (SCRM) is of growing importance, as the vulnerability of supply chains increases. The main thrust of this article is to describe how Ericsson, after a fire at a sub-supplier, with a huge impact on Ericsson, has implemented a new organization, and new processes and tools for SCRM. The approach described tries to analyze, assess and manage risk sources along the supply chain, partly by working close with suppliers but also by placing formal requirements on them.

This explorative study also indicates that insurance companies might be a driving force for improved SCRM, as they now start to understand the vulnerability of modern supply chains. The article concludes with a discussion of risk related to traditional logistics concepts (time, cost, quality, agility and leanness) by arguing that supply chain risks should also be put into the trade-off analysis when evaluating new logistics solutions - not with the purpose to minimize risks, however, but to find the efficient level of risk and prevention.

Background of the Study

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;

Fast and heavy ramp-up of demand early in product life cycles

Capacity limitation of key components.

Problem Statement

In the actual economic environment, efficiency for manufacturing firms is moving from an internal to a supply chain priority. The relevance of right management of the supply chain is connected to the possibility that it offers to the firms to reach a competitive advantage on the market. Several studies on supply chain strategies and practice generally find ...