Types of Supply Chain Risk

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Types of Supply Chain Risk

09.05.2016, 15:22

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CHAPTERS

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Types of Supply Chain Risk
Types of Supply Chain Risk
Introduction
There have been many different definitions of supply chain risk, but it can be broadly defined as "the variation in the distribution of possible supply chain outcomes, their likelihood, and their subjective values" (March & Shapira, 1987, p. 1404). However, this definition has since been expanded upon to account for all the different departments and functions that operate within a supply chain. This leads to an overall definition of supply chain risk as "any risks for the information, material and product flows from original supplier to the delivery of the final product for the end user" (Juttner, et al.,
2003, p. 202). Simply put, supply chain risk refers to the probability of a risk event occurring the supply line and when the product goes on sale. Furthermore, risk sources are the predominant causes of risk events, which are "the environmental, organisational or supply-chain variables which cannot be predicted with certainty and which impact on the supply chain outcome variables" (Juttner, et al., 2003).

Identifying Supply Chain Risk
There are a variety different approaches that a company can take in order to identify risk in their supply chain. Steele and Court (1996) proposed a conceptual framework for identifying the potential risk in an organisations supply chain. This process was comprised of three key steps:

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