Supply Chain Risk Management (SCRM)

Risk management ... should be about lessening the impact of what we don’t understand - not a futile attempt to develop sophisticated techniques and stories that perpetuate our illusions of being able to understand and predict the social and economic environment (Taleb et al.)

Information about Supply Chain Risk Management (SCRM)

Effectively, SCRM is the management of supply chain risks achieved through coordination/collaboration of supply chain partners to ensure profitability and continuity (Christopher, 2004). SCR managers need to assess the risk sources for the supply chain, identify the risk concept of the supply chain by defining the most relevant risk consequences, track the risk drivers in the supply chain strategy and mitigating risks in the supply chain (Juttner et al., 2003). Risk can be defined as ‘the probability of an unwanted outcome happening’ (CIPS: Risk Management in Purchasing and Supply Management). In addition to supply chain coordination SCRM often requires the coordination and collaboration of processes and activities across different organisational functions, such as marketing, sales, production, product design, procurement, logistics, finance and information technology (Tang, 2006). Fast adaptation facilitated by SCRM is one of the most critical supply chain functions, as unexpected developments can bring just-in-time supply chains to an abrupt halt (IBM White Paper, 2008).

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