Understanding and managing supply chain risk

In recent years the issue of supply chain risk has been pushed to the fore. Widespread disruptions caused by a variety of supply chain risk sources have underlined the vulnerability of modem supply chains. Supply chain risks can become full-fledged supply chain problems, causing unanticipated changes in flow due to disruptions or delays. This paper seeks to provide practitioners and academicians a starting point for understanding supply chain risks and insights as to how supply chain risks can be managed. To that end the authors go on to clarify the concept of supply chain risk management and to provide a working definition. Next, it describes three categories of risk sources in supply chains: environmental risk sources, intra-organizational risk sources and inter-organizational risk sources. Finally, the research analyzes supply chain risk/reward trade-offs and presents risk-mitigating strategies for the supply chain.