Coping with Supply Chain Risks

A Structured Approach (diss.)

Researcher:

Arne Ziegenbein

Financed by:

The Professorship’s own resources

Motivation:

Today’s supply chains face high uncertainty due to shorter product life cycles, volatile demand, fluctuating raw material prices, and several other reasons. On the other hand, companies reduce buffers, like the number of alternative suppliers for purchasing items as well as inventory in their supply chains, without considering the related risks. Altogether, supply chains become more vulnerable to unexpected events in a more uncertain environment. Therefore, the number of industrial cases where companies have experienced a highly negative financial impact due to unexpected events in their supply chains has risen in recent years. For example, severe failures of key suppliers led to interruptions of their own operations and thus to low capacity utilization as well as high market losses. Unexpected drops in demand resulted in high inventory levels and obsolete material. To prevent these negative financial impacts and to fulfill legal regulations, there is a strong industrial need for a systematic approach to coping with supply chain risks. Due to a lack of appropriate supply chain risk management (SCRM) methods, the area is of increasing research interest.

Objectives:

The objective of the dissertation project is to develop a systematic approach to identify, assess, and mitigate risks in supply chains. The approach will help operations managers to lower the negative influence of uncertainty in their value chain and thus enhance their supply chain performance. Industrial applications will demonstrate the feasibility of the approach. Moreover, an inclusion of the methodology developed in the SCOR (Supply Chain Operations Reference) model will be proposed and discussed.

Activities in Progress:

The sources of supply chain risks and their impacts have been analyzed in several industrial case studies and structured based on the SCOR model. Moreover, an extensive review of the professional literature on supply chain risk management and risk management in other areas has been carried out. The methodology and techniques to identify assess and mitigate supply chain risks have been developed and applied in industrial case studies.