Conceptualization, measurement and empirical exploration of selected supply chain risk constructs

In today’s business environment, supply chains are important ingredients of the global economy. Companies are no longer in a position to be alone when providing service and producing products for their customers. Instead, they rely more than ever on their supply chains when competing with each other and serving customers across the globe. However, odd events happen and this can cause various problems including failure to deliver the right product to the right customer at the right time and place. In the past decade, supply chains have been challenged with factors both externally and internally. In the era of lean, globalized and outsourced operations where companies operate inside networks, managing the supply chain vulnerability and risk is an obligation. Recent events around the world (e.g. 9/11 terrorist attacks, SARS epidemic, Japan’s earthquake) have provided frequent reminders that the world is more unpredictable and changing than ever. Natural disasters, industrial disputes and terrorism threats have all resulted in serious disruptions to supply chain activities. In situations like this, ‘business as usual’ is not an option. Nowadays, tougher and more frequent natural and man-made disasters make supply chains more vulnerable and disruptions more probable. During and after supply chain disruptions, companies may lose revenues and incur high recovery costs. If supply chain managers were more capable of measuring and managing supply chain risks and vulnerability, they can reduce the number of disruptions and their impact. Therefore, supply chain risk management became an evolving field of both research and practice. This thesis explores various aspects of supply chain vulnerability and risk. We develop a quantitative approach based on graph theory to quantify supply chain vulnerability. This aids managers in assessing the vulnerability of their supply chains (e.g., across and between supply chains, or over time) and in comparing the effectiveness of different risk mitigation strategies. Furthermore, regarding management of supply chain risks, we use a mathematical approach to design a risk identification framework, presented in a form of a risk scorecard to evaluate supplier in services and manufacturing sectors. Eventually, we provide a literature review and qualitative interviews to develop a novel supply chain risk orientation concept. Our framework illustrates how managers can enhance supply chain risk orientation of their firm and how supply chain risk orientation is able to explain a firm’s superior performance in turbulent supply chain environments.