Assessing security risk in global supply chains

Abstract

Supply chain security has become a primary concern for supply chain practitioners, and especially so for global supply chains where security related risk is a particular concern. The challenges of security-related risk may be viewed through the lens of the risk management process, which involves identifying, assessing, mitigating and controlling the vulnerabilities that are faced by supply chain managers in practice. The main purpose of this paper is to develop a methodology for the second step of the process, assessing security risk in global supply chains. The two-part assessment methodology reported here includes a scoring system for evaluating each of the participants in the supply chain in turn, and an aggregation mechanism based on graphic modeling that results in a single supply chain risk index value for a specific supply chain of interest. The main premise of this paper is that pairing these mechanisms provides a useful framework for measuring the potential threat resulting from a combination of individual risk and element interactions. We demonstrate the usefulness of this approach with an example involving two risk intensive stages of supply chains - loading port and ocean carrier.