Managing risks and system performance in supply network: a conceptual framework

Abstract

Examining a certain risk will provide an insight into a single dimension, but a picture of different risks in the supply chain (SC) is still lacking, as risks do not take place independently, but typically simultaneously. This research aims to propose and validate a conceptual framework for linking various dimensions of risk to system performance in the SC by applying SC mapping - a new approach in the SC risk body of literature. In the model, risks were classified into three categories with regard to their level of impact on performance: 1) core risks, e.g., supply risk, investor-related operational risks, contractor-related operational risks and demand risks; 2) infrastructure risks, e.g., finance risk, information risk and time risk; 3) external risks, e.g., human-made risks; 4) natural risks. Using the framework, companies will have a systematic view of risks in the whole SC network whereby they can define risks in their own context and ascertain critical SC risks that cause negative effects on SC performance.