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SCRMBlog

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Let’s see if this new-biweekly publication pattern pays off. I think at lease the last two weeks produced some very interesting articles.

 

Articles

  • Just last week the new iPhone 5 has been announced. If you want to read a little bit more about the supply chain implications of its ultrafast global rollout, have a look at “Apple’s real iPhone 5 ace: Its supply chain” at ZDNet. ( ZDNet)
  • Contemplating the effects of the hottest US summer in memory, The Guardian writes about the necessity to think beyond the supply chain when building a sustainable business. ( Guardian)
  • Swiss Re claims that the losses related to floods now come close to those caused by earthquakes. “The $12 billion insured losses in Thailand really highlighted the potential for flood to cause extreme losses,” he says. “The insured losses corresponded to 1,800 percent of the country’s total annual property premium”. ( Insurance Networking)
Already tweeted
  • René Descartes and supply chain management http://t.co/djF6UdPW
  • The Evolving Role of the Risk Professional: A Panel Discussion at the 2012 RIMS Canada Conference http://t.co/3M21FTtl
  • Hans Lessoe Shares LEGO’s Risk Management Strategy at the 2012 RIMS Canada Conference http://t.co/xvopyHO
  • For those who learn visually: Supply chain management infographics & more http://t.co/CdPwED1E

 

 

 

Originally posted by Daniel Dumke at http://scrmblog.com/content/flooding-and-iphone-this-week-in-supply-chain-management-3637-2012

Agility and robustness are the concepts of choice if you want to reduce supply chain risks. In their upcoming paper ( Dealing with supply chain risks: Linking risk management practices and strategies to performance) Andreas Wieland and Carl Marcus Wallenburg analyze the effects of both of these concepts on customer value and business performance.

Since Andreas is a colleague of mine at the “Berlin University of Technology” he kindly provided me with a heads up.
Actually, the paper has been named the most exiting paper of 2012 so far by the International Journal of Physical Distribution & Logistics Management.
Here is what the IJPDLM has to say about it:

Probably the most important topic today in global distribution and SCML is the governance of risk across relationships. Andreas Wieland and Carl Marcus Wallenburg have written a very interesting manuscript titled, “Dealing with supply chain risks: Linking risk management practices and strategies to performance.” What managers need is the ability to justify when to and to not spend money on monitoring and governance practices. To build justification, a value understanding must be developed. This manuscript opens the door for expanded research in this area, while also generating interesting practical outcomes. Researchers should view this manuscript as a call for future research in IJPDLM.

There is also a short video summary of the article.

Methodology

The effects of supply chain risk management ( SCRM) on the performance of a supply chain remain unexplored. It is assumed that SCRM helps supply chains to cope with vulnerabilities both proactively by supporting robustness and reactively by supporting agility. Both dimensions are assumed to have an influence on the supply chain’s customer value and on business performance. This research is aimed at providing clarity by empirically testing these hypotheses and scrutinizing the findings by the means of case studies.

The authors employ two empirical methods to assess this question:

  • First, a survey was conducted with 270 manufacturing companies from Europe.
  • Second, these findings were then complemented by six case studies to explore the survey findings further and extend on them.

Figure 1 shows the process of the method selection.

Utilized multi-method research design
Figure 1: Research Concept (Wieland and Wallenburg, 2012)

Building hypothesis: agility and robustness

The authors analyze preventive and reactive strategies (figure 2).

Examples for agile and robust measures
Figure 2: Robustness and Agility to reduce Supply Chain Risks (Wieland and Wallenburg, 2012)

Based on the existing literature and research gaps the authors form the following hypotheses as a foundation for their research:

  • Supply chain risk management
    • H1a: Supply chain risk management has a positive effect on agility.
    • H1b: Supply chain risk management has a positive effect on robustness.
  • Supply chain’s customer value
    • H2a: Agility has a positive effect on the supply chain’s customer value.
    • H2b: Robustness has a positive effect on the supply chain’s customer value.
  • Business performance
    • H3a: Agility has a positive effect on business performance.
    • H3b: Robustness has a positive effect on business performance.
    • H4: Business performance is positively influenced by the supply chain’s customer value.

Results

The findings of the survey are shown in figure 3.

Empirical results of hypotheses testing
Figure 3: Resulting links between Research Concepts (Wieland and Wallenburg, 2012)

The hypotheses 1a and 1b are both supported, which reinforces the notion that agility and robustness are indeed used as measures in supply chain risk management.
Both measures also have a positive impact on the supply chain’s customer value.
On the other hand the link between agility and business performance cannot be supported for agility and only weakly supported for business performance.

The results of the case studies expand on these results. Figure 4 shows the case study participants.

Case characteristics
Figure 4: Case Study Participants (Wieland and Wallenburg, 2012)

In general, the cases revealed that all companies strive to be both agile and robust in order to utilize the specific advantages of each approach.

Interestingly, “the case studies show that robustness is rather required on the supplier side (i.e. upstream in a supply chain). For instance, multiple suppliers are helpful, if the quality of a component is low or a supplier has a high insolvency risk. This finding first of all implies that supplier-related risks tend to be more predictable as otherwise a proactive approach would not be feasible and effective.”

The following propositions are made as a summary of the case interviews:

  • P1: Realizing agility is an effective supply chain approach to deal with customer-related risks.
  • P2: Realizing robustness is an effective supply chain approach to deal with supplier-related risks.
  • P3: To be effective, the degree of agility and robustness needs to fit to the overall competitive strategy.

Conclusion

From my point of view, the nomination as most exciting paper of 2012 (so far) seems to be highly justified.
The nomination as well as the high survey response rate of nearly 20% highlights the importance of supply chain risk management in the current research and practice.
Beside the results, I especially liked the elaborate description of the methodological foundation both for the survey and the case study research.

I also found some points with the potential for improvement:
First, the survey results show that there is no link between agility and business performance. On the other hand, the authors claim that the hypothesis on the linkage between robustness and business performance can be supported. However this happens on a very thin foundation the confidence level for this interpretation is quite low with a error 1 probability of nearly 10%.

Second, a key conclusion of the paper is that robustness should be used for supply-side risks, agility for demand-side risks. However this result originates only from the case study interviews. From a formal point of view I would have wished that it would have also be supported by the survey results.

Third, there is a clear disadvantage to using only concepts (like agility and robustness) in one’s research, since those do leave a lot of room for further questions: What robustness measures are really improving the value for the customer? Are there also agility strategies which should be employed for supply side risks?

But these are only minor points, I really recommend you to read the paper: You can download the full (pre-publication) article here. Click one of the following links, if you want to learn more about robustness or agility.

 

Reference:

Wieland, A., & Wallenburg, C.M. (2012). Dealing with supply chain risks: Linking risk management practices and strategies to performance International Journal of Physical Distribution & Logistics Management, 42 (10)

 

 

 

Originally posted by Daniel Dumke at http://scrmblog.com/review/linking-risk-management-practice-and-strategies-to-performance

Finally, the dissertation is complete. Last week I finished working on the comments and handed in the final work. The process now consists of three more steps that can take another three to four month: First, I have to do a (really) short presentation of my dissertation. Second, I have to wait for two written evaluations by two professors of the university. Last, I have to defend my thesis, hopefully some time around December.

This week was again slow on new good articles. Since this did happen before I decided to change this format to a bi-weekly pattern. I hope this helps to keep the quality of the linked articles up.

Already tweeted

This week on twitter there was a lot of buzz about an article called Can Automation Reduce Supply Chain Risk? Interesting question, but after skimming over it I decided not to join the hype.

 

Why?
The article does summarize a study by the EEF, which I wrote about two weeks ago ( here).
Of course, there is nothing wrong with writing about old stuff. I do it all the time, as long as the topic might still be relevant.

But the problem is: the article called “Can Automation Reduce Supply Chain Risk?” does simply not answer the question posed… Beside the title there is not a single mention of the word automation in the rest of the article.

Perhaps the exaggeration on twitter might be related to the fact that the author of the article is introduced as “David Greenfield, Media & Events Director

 

But still there were some interesting articles I already tweeted about this week:

 

Originally posted by Daniel Dumke at http://scrmblog.com/content/automation-and-amazon-prime-this-week-in-supply-chain-management-35-2012

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This week I would like to think about the future of supply chain management. Cox and Lamming wrote a corresponding article titled: “Managing supply in the firm of the future”.

Methodology

It is difficult to make predictions, especially about the future. So to infer about future development the authors use case studies and historical analysis.

Short history of corporate sourcing

Within the last century business models have changed quite a lot in nearly all industries.
Aa hundred years ago industries like watchmaking were focussed on small customer niches with few and wealthy customers accustomed to great service.
This changed with industrialization and the advent of mass production (and mass services).
Companies thrived in an environment where new customers were less sophisticated, labor was cheap and plenty and supply compliant.

With the rise of the customer (“The customer is always right”) this changed, when customers demanded even faster, smaller and cheaper products.

The model of purchasing born in the early decades of this century, during the heady days of mass production, has lasted almost unchanged to this day. It is based upon the purchaser having a wide spread of potential suppliers, each of whom is able to supply in accordance with a specification, without deviating from it. When it appeared that the customer was not able to provide this specification, the supplier’s expertise could either be bought (leading to the birth of the vertically integrated mass production leviathans) or extracted under the threat of loss of business within the customer’s supply market.

Themes for future development

In research four key themes emerged in the conceptual development of the management of “supply chains”. These should form the basis for the future development of the perception of the supply function.

Theme 1: It is necessary to take a total supply chain view
Key insights:

  • “The consumer is perceived to be at the end of a supply chain—a series of value-adding events and activities that leads to the provision of a desirable—valuable—product or service.”
  • “Supply chain management is […] a process of realignment of activities, from each firm’s point of view, in order to reduce value losses, so that the output from the total chain satisfies the consumer and results in the success of all parties to the chain.”
  • “Within the [value] stream are barriers—interfaces between companies. The management imperative is thus to design those interfaces with minimum impediment, to allow value to flow.”


Theme 2: The chain is an unsatisfactory metaphor: the firm is part of a network
Key insights:

  • “The so-called ‘chains’ often contain looped relationships (where the customer is also a supplier to the supplier), lateral links (where the supplier is a supplier to both the customer and another supplier), dependencies (where the performance of one supplier is intrinsically linked to that of another) and other non-linear facets which deny the convenience of thinking in simple terms.”
  • “Adopting a network perspective can lead to perceiving supplier relationships as indistinguishable from customer relationships.”
  • “The contribution of the network metaphor to understanding the matter to managing value comes from its method of grappling with complexity.”


Theme 3: The firm concentrates on its core competencies and outsources everything else
Key insights:

  • “Managers have, for some time, been encouraged to view their firms as a combination of ‘core’ competencies – those which it is deemed essential to own in order to compete in a market – and, by process of elimination, ‘non-core’ competencies.”
  • “[…] the issue of whether to ‘make or buy’ is not straightforward; it is always a problematic issue for the firm which may be resolved either through vertical integration or through outsourcing. The key strategic deci- sion for the firm is to decide what the boundaries should be between the two extremes of internal or external contract.”


Theme 4: The firm is an unsatisfactory unit of analysis: the flow of value takes place in a loosely aligned array of assets and competencies over which no one commercial organization has ultimate control
Key insights:

  • “The further away from the core competencies of the firm, the less there is a need for medium asset specific skills to be vertically integrated, and thus the more support may be expected for outsourcing the activity.”
  • “[…] firms are best viewed as a ‘nexus of contracts’. The importance of this interpretation is that it forces us to see firms not as fixed entities, existing as objects within a static market structure, but as potentially fluid and flexible constructs whose internal structures and external boundaries may change as circumstances dictate and opportunities require.”


Outlook

The themes sketched above lead the authors to several conclusions about the future outlook of supply (chain) management.

  • The future role of negotiation, contracting, and developing incentives will, if the analysis presented here is correct, be of immense importance for the future success of firms. This arises primarily from the insights of transaction cost and agency theory, and the realisation that the boundaries of the firm are not, nor should be, fixed in time or space.
  • This means that in the future there will be a definite need for professional managers trained in the arts of – and perhaps with a ‘nose’ for – assessing the relative costs and benefits of internal and external contracts for the successful achievement of a sustainable position on specific supply and value chains
  • The first task in a strategic supply management approach is to undertake value chain positioning. This refers to the process by which the key decision makers within a firm consciously undertake market positioning through an analysis of the totality of supply and value relationships within their markets. This is achieved through the use of margin-cost analysis.


Conclusion

This article was published 15 years ago and it draws the picture of a future with fluid ever-changing interfaces between companies. Where companies are steered as a collection of contracts.
When I read the article I was amazed how good the selected themes still fit the current development. Even though some parts of the “predictions” seem to have come true (eg. the professionalization of supply chain management), my overall impression is that organizational hurdles prevent companies from being shaped in this way.
But this also may only be a matter of time.

Reference: 

Cox, A., & Lamming, R. (1997). Managing supply in the firm of the future European Journal of Purchasing & Supply Management, 3 (2), 53-62 DOI: 10.1016/S0969-7012(97)00002-6

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Originally posted by Daniel Dumke at http://scrmblog.com/review/managing-supply-in-the-firm-of-the-future

This week I am busy including the feedback I received from my professor on my dissertation. Looks very promising. After a few days now I am already done and so I have time to prepare some related documents to boost the further graduation process.
Articles are few this week, but if you are interested have a look at the following:

Articles
  • Have a look at the interview on “How to handle supply chain risk” in the offshore wind industry. ( WindEnergyupdate)

Also have a look at the articles I tweeted this week:

  • New research project MIT and PwC: Supply chain risk management http://t.co/leOdQ2Mz

    PwC and Prof. David Simchi-Levi of MIT have launched a research initiative to study to which extent companies supply chain risk management practices are capturing the changing dynamics. Companies that participate in this initiative will be asked to fill out a survey and are able to meet peers at a state-of-the-art seminar.
  • Cavalcade of Risk #164 http://t.co/1JByAiWE
  • Companies swimming in Water Risk http://t.co/V6xxSyeC

Enjoy your weekend!

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Originally posted by Daniel Dumke at http://scrmblog.com/content/wind-supply-this-week-in-supply-chain-management-34-2012

I found one article this week, which I can commend.

  • Local productions seems to become more prominent with manufacturers. The article at BusinessGreen summarizes a new study by the EEF. ( BusinessGreen)

    A new survey by EEF, the manufacturers’ organisation, found that two-fifths of companies are bringing production back in-house, and a quarter have increased their use of local suppliers over the past three years, largely as a result of the recession and the impact of natural disasters, such as last year’s Japanese earthquake.
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Originally posted by Daniel Dumke at http://scrmblog.com/content/insourcing-this-week-in-supply-chain-management-33-2012
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Today we have a look at current research regarding the improvement of resilience within a supply chain.
In their 2012 paper “Supply chain redesign for resilience using simulation” Carvalho et al. analyze supply chain resilience on the basis off a Portuguese automotive parts manufacturer.

Methodology

As indicated by the paper’s title the authors main method is a simulation study. The simulation model is based on the results of a case study. Semistructured interviews were conducted to gather the relevant data off a Portuguese automotive supply chain.

But first, the authors analyze the current literature on supply chain design and resilience (figure 1).

An exemplary review of literature related to SC design.
Figure 1: Literature Review Supply Chain Design (Carvalho et al., 2012)

Simulation model
The structure of the supply chain model is shown in figure 2. The Portuguese automaker has a capacity of over 180,000 vehicles per year and all vehicles are customized.

Case study supply chain.
Figure 2: Supply Chain Structure (Carvalho et al., 2012)

Arena 9.0 in conjunction with Microsoft Excel has been used to implement the model of the supply chain.
The processes which have been identified rely on the SCOR process definitions. Figure 3 shows the simulation model flowchart.

Simulation model flowchart.
Figure 3: Supply Chain Processes (Carvalho et al., 2012)

Supplier lead-times were estimated together with the case study participants using triangular distributions (figure 4).

!(article_center){width:500px}http://scrmblog.com/sites/default/files/images/carvalho_input_data.png(Transportation time between SC entities (triangular distribution, in h).)!
Figure 4: Input Data Lead Times between Suppliers (Carvalho et al., 2012)

Performance was measured using two key performance indicators: lead-time and total cost.
Overall six scenarios were designed by the authors. One containing the base scenario without using any strategy to reduce risk, one using a redundancy-strategy, and another one implementing a flexibility-strategy. These scenarios were then duplicated to generate one group with a disruption in the material flow between supplier 2_1 and 1_1 and another group without any disruption.

Figure 5 shows the total cost performance in different scenarios. Scenarios to 4 and 6 are affected by the disruption.

Total Cost performance measure results.
Figure 5: Simulation Results in different Scenarios (Total Cost, Carvalho et al., 2012)

The authors conclude

Two strategies widely used to mitigate disturbance ad- verse effects on SCs were considered (flexibility and redundancy) and six scenarios were designed. To evaluate the different scenar- ios designed, two performance measures were defined and com- puted for each SC entity, Lead Time Ratio and Total Cost.
The results of the simulation allowed to compare SC behavior after the occurrence of the disturbance under the two SC resilience design strategies. Both strategies are effective in reducing the neg- ative effects of the disturbance on SC performance. When the flexibility strategy is applied the Total Cost of the SC is less, in comparison with the redundancy strategy and the Lead Time Ratio is better.

Conclusion

Since my own research revolved in parts around my own simulation model I have two comments on this specific implementation, but I would like to share with you:

  • I’ve seen this already in other papers: the description of the scenarios is really bad. For one there is no overview summarizing the key differences between each of these scenarios, furthermore the description of how these scenarios are implemented in the supply chain model lack in detail.
  • Another key aspect to simulation modeling is the validation off the model’s output. In this case the authors are using real input data from the case study, but there is no mention if they also compared the model’s output with the real supply chain.


The conclusion of the authors also highlights the difficulty of interpreting simulation results. What could one learn from this study? Redundancy and flexibility can be used to reduce risk?
For me this insight does not qualify as a groundbreaking revelation. At least not in 2012.

Reference: 

Carvalho, H., Barroso, A.P., Machado, V.H., Azevedo, S., & Cruz-Machado, V. (2012). Supply chain redesign for resilience using simulation Computers & Industrial Engineering, 62, 329-341 DOI: 10.1016/j.cie.2011.10.003



Originally posted by Daniel Dumke at http://scrmblog.com/review/supply-chain-redesign-for-resilience-using-simulation

Today the focus is all on the research.

Research

And a lot of new research came out this week.

  • “When Supply-Chain Disruptions Matter” was published by Ananth Raman of the Harvard Business School. ( HBS Working Knowledge)

    Supply-chain disruptions have a material effect on company value, but this impact can vary considerably. Thus, it is important for managers and investors to recognize the types of disruptions and the organizational factors that lead to the worst outcomes. Prior research remains unsettled as to whether improvements to firm operational efficiency aggravate or alleviate the impact of disruptions. Improved operational efficiency may leave firms more exposed when a disruption occurs, or it may improve firms’ agility and allow them to respond more effectively to a disruption. We hypothesize that the impact of improved operational efficiency depends on whether the disruption is due to factors that are internal versus external to the firm and its supply chain. We use a sample of over 500 disruptions collected from company press releases and find empirical evidence that a higher rate of improvement in operating performance aggravates the impact of internal disruptions but not external disruptions. By taking advantage of an exogenous policy shock regarding corporate disclosure rules, we also find that managers show systematic bias in the disruptions they choose to announce, and we control for this effect in our model specifications.


  • Also have a look at a new PhD dissertation by Leah J. Bovell “Joint Resolution of Supply Chain Risks: The Role of Risk Characteristics and Problem Solving Approach”. ( Georgia State University)

    The purpose of this study is to examine the disruption risk resolution process in supply chains; specifically, to assess how risk attributes impact the approach firms select to resolve risks and the associated final outcomes.
    We propose that high magnitude risks are positively associated with mutually beneficial problem resolution; on the other hand, low likelihood risks have the opposite effect, they are negatively associated with mutually beneficial resolution. Our conceptual contribution lies in our articulation of the mechanisms though which risk magnitude and risk likelihood impact mutual problem resolution. We posit that high magnitude risks and low likelihood (uncommon) risks mobilize the social network of actors, triggering vigilant monitoring for risks, communication among actors and across firm boundaries, and resource sharing and coordination which facilitate collaborative problem solving and mutual resolutions. These mobilization mechanisms help supply chain partners to overcome the challenges of complexity and allow for information and resource flows among actors and between firms.
    Our statistical analysis demonstrates that the impact of risk attributes on mutual problem solutions is fully mediated by timely problem identification and collaborative problem solving.
  • Accenture has published a white paper on “Managing Supply Chain Risk Better”. ( Accenture)

Enjoy your weekend.



Originally posted by Daniel Dumke at http://scrmblog.com/content/research-this-week-in-supply-chain-management-32-2012

The kayak tour last weekend was great. We had good weather and a lot of fun. Even though our boat lost in every speed competition.
Afterwards we spent a night in Berlin, where I had the chance to eat dim sum (chinese dumplings) again at Yumcha. They remind me a lot of my semester in Hong Kong. Especially the Siu Mai.

Research
  • This week I found a new article on risk management in the chemical supply chain using agent-based modeling. ( ScienceDirect)

    In today’s global and competitive markets, managing supply chain disruptions is a key factor in the success of any business. Disruption management, however, can be a challenging issue as disruptions can occur for a wide variety of reasons and the approaches to handle these risks are also ample. Moreover, evaluating the disruption impact and possible treatments is not a trivial task for a complex supply chain with many actors and different types of interactions. This calls for appropriate modeling and simulation frameworks. This paper presents a simulation-based risk analysis approach using an agent-based model and its application for a specific case of a lube oil supply chain.
Article
  • Fox Business reports on potential risks in the supply chain of the french car maker Renault ( Fox Business

Enjoy your weekend!

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Originally posted by Daniel Dumke at http://scrmblog.com/content/risks-at-renault-this-week-in-supply-chain-management-31-2012

Another week has gone by and I am looking forward to my next vacation. This time will be only a prolonged weekend, which I will spend at the Mecklenburg Lake District. Germany’s largest coherent lake and canal region.
We are going to explore a small section of it on our four day kayak tour.


All of the articles I recommend reading this week are already on my tweet list:

Enjoy your weekend!

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Originally posted by Daniel Dumke at http://scrmblog.com/content/disease-this-week-in-supply-chain-management-30-2012
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The article on review today serves two distinct needs, by summarizing the current (2012) state of supply chain risk management.
The title of the article implies, that this is only a summary relevant for researchers. But this is not the case: of course there is also a short summary of current research and supply chain risk management, but a major part consists of two focus groups with practitioners and researchers, to define the current gaps in supply chain risk management.

The full length article can be found here.

Objective and methodology

There is a huge diversity in the topics, opinions, and research methodologies in the field of supply chain risk management. This is only natural, since research in supply chain risk management is still in a very early stage.

However it helps, once every couple of years, to summarize the current state-of-the-art and to categorize the most influential thoughts. These summaries help to focus research efforts and guide them within predefined bounds.

The goal of the authors is to examine the diversity in scope and research tools. For this the authors use three steps:

  1. carry out direct observations of the researchers’ output (literature analysis);
  2. gather evidence through surveys of focus groups of researchers aided by open- ended questionnaires; and
  3. seek confirmation and additional information through a formal survey of a large group of researchers.


Results: diversity in scope and research tools

Figure 1 summarizes some of the most often used definitions for supply chain risk. The listing shows that there is still a large variety in definitions of risk.

Diverse Views of Supply Chain Risk in Articles that Aim to Look at SCRM Comprehensively
Figure 1: Literature: Research Definitions for Supply Chain Risk (Sodhi, Son, Tang, 2012)

Figure 2 highlights different research methodologies which are employed in literature. As you can see a large proportion is focused on conceptual work.

Research Methodologies used in the Research Literature
Figure 2: Literature: Methods employed in Literature (Sodhi, Son, Tang, 2012)

Results: definition gap

The authors presented three open-ended questions to a practitioners’ focus group.
The first question was: what is supply chain risk management?
Figure 3 summarizes the results highlighting the fact, that most practitioners see supply chain risk management concerned mostly with the variations of supply and demand.

Response to Q1: What is Supply Chain Risk Management? N = 42; Some Responses Fell into More Than One Category
Figure 3: Practitioners: What is Supply Chain Risk Management? (Sodhi, Son, Tang, 2012)

The second question revolves around the classification of supply chain risk management in regards to other management areas. For most respondents SCRM is seen as a subset of supply chain management.

Response to Q2: How is SCRM Different from Supply Chain Management? N = 42 Respondents. Some Responses Fell into More Than One Category
Figure 4: Practitioners: How does SCRM relate to SCM? (Sodhi, Son, Tang, 2012)

The answers to the last question shows that supply chain risk management is also seen as a subset of the enterprise risk management ( ERM).

Response to Q3: What is the Link between SCRM and ERM? Percentage was Calculated out 31 Respondents. Some Responses Fell into More Than One Category
Figure 5: Practitioners: How does SCRM relate to Enterprise Risk Management? (Sodhi, Son, Tang, 2012)

Results: research survey

Building on the prior results, the authors conducted a small survey using seven questions/statements regarding the current state of supply chain risk research.
Figure 6 lists the questions.

Questionnaire for the INFORMS Survey
Figure 6: Researchers Questionnaire (Sodhi, Son, Tang, 2012)

As you can see the questions are mostly normative, looking for answers on how things should be.

The results therefore are meant to close the gaps.
According to the survey supply chain risk should be concerned with dealing with unknown, disruptions/disasters/low probability, high-impact events (figure 7).

Response to Q2: In What Terms do You Think SCRM Should be Primarily Defined? N = 133
Figure 7: Researchers: Definition of Supply Chain Risk Management (Sodhi, Son, Tang, 2012)

There still is an agreement towards the process Gap, even though it is not as pronounced. The answers however are not very clear as well (better foundation of SCRM, closer industry collaboration and case-studies, better way to publish and share research).

Figure 8 collects the answers to the question on how the methodology gap should be remedied.

Response to Q7. What Should We do to Address the Methodology Gap?
Figure 8: Researchers: How should the Methodology Gap be addressed? (Sodhi, Son, Tang, 2012)

The focus should still be on qualitative empirical work (case studies and similar methods) to gather more insights about supply chain risk management practices first.

Conclusion

Supply chain risk management has been around for about one decade now. Considering the complexities of the field it has had a good start up to now. It is only natural that there are still many missing pieces that have to be found and linked together to generate a comprehensive picture of supply chain risk in a descriptive and normative way.
Supply chain risk management is not always established as a distinct function/department in companies. So it seems that businesses do not agree on how to integrate supply chain risks into their decision-making processes. It shouldn’t come as a surprise that descriptive research in supply chain risk management leads to a huge variety of results.

If you want, you can learn more about Practitioner Views on Supply Chain Risk Management.

Reference: 

Sodhi, M.S., Son, B-G., & Tang, C.S. (2012). Researchers’ Perspectives on Supply Chain Risk Management Production and Operations Management, 21 (1), 1-13



Originally posted by Daniel Dumke at http://scrmblog.com/review/researchers-perspectives-on-supply-chain-risk-management

This week there is one article and one conference I would like point out.

Article
  • The Risk Management Monitor has a short interview with Walter Isaacson on Steve Jobs’ approach to risk management at Apple, Inc. ( RMM )
Conference

Have a look at the “4th Supply Chain Risk Management Seminar” by Icon Events on October, 25 & 26 in Barcelona. ( Icon Events)

This week I already tweeted about:





Originally posted by Daniel Dumke at http://scrmblog.com/content/apples-risk-management-this-week-in-supply-chain-management-29-2012
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One of the fundamental problems in supply chain management in general is that of finding the right trade-offs between information sharing and keeping one’s distance towards potential competitors.

Zeng et al. did a literature review to collect some of the current insights on how to solve this problem.

Collaboration in product design and supply chain environment

Workflow of collaborative global design and supply chain environment.
Figure 1: Collaborative Product Development Process (Zeng et al., 2012)

Figure 1 shows a typical process from problem formulation up to delivery of the finished product. This process can be decomposed into: collaborative product development ( CPD), design chain management ( DCM) and supply chain management ( SCM).

Collaboration conflicts

Several conflicts threaten the viability of the collaboration. These are all related to the information which is interchanged by the stakeholders.

Figure 2 shows the information flow.
Information flow of manufactuer/supplier collaboration in design and production phases.
Figure 2: Information Flow between Supply Chain Participants (Zeng et al., 2012)

This information can be divided into information to protect and information to share.
Figure 3 lists some of the relevant information.

Information to share/protect between focal manufacturer and supplier.
Figure 3: Information to Protect and Information to Share (Zeng et al., 2012)

Securing collaboration

Figure 4 summarizes the problem analysis and the corresponding conclusions the authors draw.
Problem analysis of secure collaboration.
Figure 4: Problem Analysis and Potential Solutions (Zeng et al., 2012)

The authors suggest and elaborate on four categories to secure collaboration:

  • Computer security and privacy technologies
    Which consists of measures for access control and secure multi-party computation, where computations can be done on multiple datasets without revealing the underlying information. Furthermore privacy-preserving location-based services are summarized here.
  • Information partitioning
    This contains the aspects of document classification and risk management.
  • Contract management
  • Partner relationship management
    Here the authors include trust management and innovation capability and reverse engineering mitigation.


Last but not least figure 5 summarizes the current state of the art for the above mentioned problems and potential future research directions.
Future development of literatures on secure collaboration.
Figure 5: Future Research Directions on Secure Collaboration (Zeng et al., 2012)

Conclusion

The authors take the view of a computer scientist and find technical solutions (like secure multi-party computation) to fight supply chain problems.
One of the first things that came to my mind: “One cannot use technology to solve social problems.”
I do think that those measures should be pursued further in research as well as business. But the first steps have to be done by describing and defining their individual information buckets, by answering the strategic question: What information is core to our business and should be protected and what can be shared?

Reference: 

Zeng, Y., Wang, L., Deng, X., Cao, X., & Khundker, N. (2012). Secure collaboration in global design and supply chain environment: Problem analysis and literature review Computers in Industry, 63 (6), 545-556 DOI: 10.1016/j.compind.2012.05.001



Originally posted by Daniel Dumke at http://scrmblog.com/review/secure-collaboration-in-global-supply-chain-management

This week is we keep it short and simple. I found a nice online textbook on The Geography of Transport Systems at the Hofstra University (NY).

Mobility is fundamental to economic and social activities such as commuting, manufacturing, or supplying energy. Each movement has an origin, a potential set of intermediate locations, a destination, and a nature which is linked with geographical attributes. Transport systems composed of infrastructures, modes and terminals are so embedded in the socio-economic life of individuals, institutions and corporations that they are often invisible to the consumer. This is paradoxical as the perceived invisibility of transportation is derived from its efficiency. Understanding how mobility is linked with geography is main the purpose of this textbook.

They also have a nice graphic listing selected drivers of supply chain risk.

I already tweeted about

  • The annual Citation of Excellence Awards recognizes the 50 most outstanding articles published by top journals: http://t.co/b1hqVU0j

Enjoy your weekend.

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Originally posted by Daniel Dumke at http://scrmblog.com/content/supply-chain-risk-drivers-this-week-in-supply-chain-management-28-2012

I used the last two weeks to do a short bike trip, visiting my in-laws. From northern Germany (Bremen) to the middle (Fulda): 455km in three and a half days. My route contained virtually no ascents (beside the last 10km), but the distance was still quite demanding.
So last weekend was mostly about recovery and I have the pleasure to read through all the articles from the last two weeks. The best of which are listed below.

Articles
  • Industry Week shares views on managing currency risk in the the supply chain. ( Industry Week)
  • Steve Baker from Logistics Viewpoints questions Apple’s status as the company with the best supply chain in the world. He concludes that too much focus on the supply chain rather than product development might prohibit long term success. ( Logistics Viewpoints)
  • KPMG sees the silo mentality within companies as a major factor contributing to supply chain risks. ( inaudit)
  • Several sources related to a recent study by Zurich Financial on the impact of supply chain risks on mid-size companies, UK tech firms, wholesalers and manufacturers. (original report “The Weakest Link: UK Plc’s Supply Chain” is not available online)

Enjoy the weekend!



Originally posted by Daniel Dumke at http://scrmblog.com/content/currency-risks-this-week-in-supply-chain-management-2627-2012

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