A grounded definition of supply risk

Abstract

All purchasing organizations encounter supply risk, whether it is explicitly understood and assessed, or reactively managed. The purpose of this paper is to provide a grounded definition of supply risk. Case study data from seven purchasing organizations uncovered various definitions of supply risk. These definitions focus on the sources of supply risk, emanating from individual supplier factors and market characteristics, and the outcomes of supply risk events, which involve the inability of purchasing firms to meet customer requirements and threats to customer life and safety. Findings from this research provide practitioners and academicians a starting point for understanding supply risk and insights as to how supply risk can negatively affect business operations.