外文原稿：Perspectives-on-risk-management-in-supply-chains.doc

浙江大学本科毕业论文外文原稿Perspectives on risk management in supply chainsAbstractManaging risk in supply chains is an important topic in supply chain management. The topics importance is due to several industry trends currently in place: increase in strategic outsourcing by firms, globalizations of markets, increasing reliance on suppliers for specialized capabilities and innovation, reliance on supply networks for competitive advantage, and emergence of information technologies that make it possible to control and coordinate extended supply chains. This article identifies some important aspects of risk management in supply chains and summarizes the four articles that are in this special issue. This emerging area of research interest deserves considerable attention and it is our hope that the articles in this special issue would spur additional research on this important topic.1 IntroductionManaging risk in supply chains has emerged as an important topic in supply chain management. The topic derives its importance due to several industry trends currently in place: increase in strategic outsourcing by firms, globalizations of markets, increasing reliance on suppliers for specialized capabilities and innovation, reliance on supply networks for competitive advantage, and emergence of information technologies that make it possible to control and coordinate extended supply chains. These trends have manifested themselves in an increase in outsourcing and off-shoring of manufacturing and R&D activities, low cost country (LCC) sourcing, and collaboration with international supplier partners (Fisher, 1997; Lee, 2002). While these increase the strategic options for firms, they also increase the probability of experiencing adverse events in supply chains that significantly threaten normal business operations of firms in the supply chains. Along with the increase in these initiatives, there has been an increase in the potential and magnitude of supply chain risks (Blackhurst et al., 2005). Recent events involving food supply chains (for example, Melamine in infant formula and powdered milk sourced from China) underscore risks of extended supply chains. Supply chain disruptions can also adversely affect the financial performance of firms. The study by Hendricks and Singhal (2005) showed how media announcements of supply chain disruptions can affect stock price and shareholder value. Supply chain risks, their impact and management are receiving much attention among practitioners and academicians alike. The objectives of this special issue are to: (1) highlight supply chain risk management as an important area of investigation in operations and supply chain management; and (2) to present a compendium of articles that break new ground in addressing methodological and theoretical issues dealing with supply chain risk management. Supply chain risk management (SCRM) can be viewed as a strategic management activity in firms given that it can affect operational, market and financial performance of firms. Organizational efficiency and performance are enhanced when strategy to reduce uncertainty takes into account context and environmental realities (Duncan, 1972). In the case of SRCM, context can be interpreted to refer to sources of risk, magnitude of risk and its relationship to business objectives, and threat of disruption in supply chains. Environmental realities can be interpreted to mean the degree of exposure to adverse events, scope of extended supply chains, supplier management practices, etc. Therefore, the essence of SCRM is to make decisions that optimally align organizational processes and decisions to exploit opportunities while simultaneously minimizing risk (Miles and Snow, 1978; Venkatraman and Camillus, 1984). Supply chain disruptions can materialize either inside or outside a supply chain. As Wagner and Bode (2008) point out, the financial default of a supplier and an earthquake that destroys production capacity are situations with completely different attributes and therefore have different effects on the supply chain. This observation points to the need for effective methodology for anticipating, identifying, classifying and assessing risks in supply chains. The papers in this issue seek to address these aspects of supply chain risk management. We briefly discuss the four papers in this special issue by way of introduction to the special issue and to motivate the issues examined in each.2 Value focused process engineeringSupply chain risks contribute to the overall business risks. An example that illustrates this arises in strategic outsourcing engagements. Firms outsource for a variety of reasonscost reduction, need for strategic agility, innovation and to increase their ability to respond to rapidly changing customer demands. In the case of innovation based outsourcing engagement, achieving business objectives requires effective use of integrative supply management practices. These include information integration, knowledge integration and design integration. It is apparent that in these engagements, there is risk of knowledge leak, since the firms cannot have complete control over knowledge inflows and knowledge outflows. In this situation, while the firm might achieve its innovation objective, it might run the risk of disclosing proprietary knowledge that might reduce its competitiveness in the future or the firm might find itself in a lock-in situation with the supplier. These supply management risks must be carefully identified and evaluated vis-a-vis the business objectives. Some of these issues have been considered in the literature (Christopher and Peck, 2004; Narasimhan et al., 2008; Gaudenzi and Borghesi, 2006). The strategic outsourcing context is but one instance where the need to identify and relate risks to supply chain activities is manifested.In the article Supply Chain Risk Identification with Value-Focused Process Engineering, the authors explicate a novel methodology for identifying process-based supply chain risk. The importance of supply chain risk identification methodology has been recognized in the literature. As the authors comment, it is important to have a coherent representation of supply chain structure and use it to express how different risks are related to the various components of the supply chain structure. It is also essential to classify the nature of the risks before embarking on full blown risk assessment and developing risk mitigation strategies. The paper addresses supply chain risk management under the rubric of managing organizational uncertainty.Much of the literature on supply chain risk has dealt with various types of risk and sources of such risk (Norrman and Lindroth, 2004; Speckman and Davis, 2004). They have not taken a multidimensional view of risk that encompasses supply management processes, objectives and risk source. It is recognized in the literature that risk can be studied as a mathematical construct (Cachon, 2004; Tomlin, 2006), conceptual construct (Svensson, 2004; Zsidisin and Smith, 2005) or a combination of the two approaches (Wu and Knott, 2006). As pointed out by the authors, the conceptual view of risk might be very useful in the risk identification stage.The general approach to risk management should start with the identification of business objectives and performance goals and associated risks. Identifying risk, thus increasing its visibility in the performance evaluation process, leads to risk minimization strategies that can contribute to performance gains (see for example, Ritchie and Brindley, 2004). In this analysis stage, understanding the hierarchy of business risks is essential.Extant literature has focused on identifying sources of uncertainty and the risks that emanate from them. To do this effectively, it is necessary to develop a consistent methodology for risk identification. Several authors have addressed this issue (see, for example, Chopra and Sodhi, 2004; Wu and Knott, 2006). Risk identification is succeeded by quantification of risks that can be used in deriving risk mitigation strategies (Cachon, 2004; Sodhi, 2005). Another aspect of supply chain risk management is that supply chain risks manifest themselves in the disruption of supply chain flows. These can be disruptions to material flows, information flows, knowledge flows, and control and coordination flows. This perspective of supply chain risks requires that sources and types of risk be related to the flows that occur within the supply chain. The literature on this aspect of risk identification is not extensive (Juttner, 2005; Paulson, 2004). The Value-Focused Process Engineering (VFPE) methodology seeks to fill this gap in the literature. VFPE is based on the extended-event-driven Process Chain (e-EPC) representation of business activities and processes (Scheer, 1999). VFPE methodology integrates value-focused thinking (VFT) developed by Keeney (1992) and e-EPC (Scheer, 2000). Nieger, Rotaru and Churilov, in their article, define a five-step process for risk identification in supply chains. These are: (1) Activity driven identification of risk objectives; (2) Objective driven identification of risk objectives; (3) Synchronized decomposition; (4) e-EPC taxonomy of risk sources, and (5) combining events structure to the objective structure. The authors illustrate these five steps of the VFPE methodology by considering a generic supply chain from Scheer (1999).After explicating the five steps of the VFPE process, the authors identify how the proposed methodology conforms to the properties of supply chain risk identification process. They argue that the suggested approach conforms to the following properties: objective driven identification and assessment of risk, risks included as part of objective structure, risks linked to supply chain activities, risks linked to individual sources, risks quantified, cross-organizational risk visibility enabled and decomposition of risk according to process flow enabled. The key advantage of the proposed methodology is that it integrates conceptual views of risk and decision sciences approach to risk analysis. The validation of the efficacy and usefulness of the proposed methodology can be pursued through action research or participant observation approach.3 Labor management and global supply chain riskThe paper by Jiang, Baker and Frazier examines the issue of labor turnover as a source of supply chain disruption risk in an outsourcing context. It is an empirical study of labor turnover problems in Chinese suppliers. The authors link labor turnover problems to supply chain risks such as poor quality, low productivity and unfilled orders in supply chains. The paper examines a theoretical issue under the rubric of supply chain risk management. The Global Supply Chain Forum at The Ohio State University has identified eight processes that form the foundation of supply chain success (Lambert, 2004). Among these, two are directly influenced by labor management issuesorder fulfillment and manufacturing flow management. It is recognized that strategic outsourcing and off-shoring will continue to grow as firms come under increasing cost and competitive pressures. The need for strategic agility has added to this impetus for outsourcing. In the context of off-shoring, contract manufacturing and low cost country sourcing, understanding labor management issues can be critical for avoiding supply disruptions or under-performing suppliers. It is useful to note that Meredith (2001) has drawn attention to the need for studying human resources issues in operations and supply chain management. Jiang et al. conducted their study in the Pearl River delta region of China. They identify two major elements that contribute worker dissatisfaction and turnover: the sourcing standards of (foreign) buying firm are sometimes too high and the local suppliers greed. As the buying firms strive to meet the demands of their markets and customers, they feel the need to continually change product specifications, tighten quality standards and decrease lead times for delivery. Approvals for product samples are granted later than desirable from the perspective of the Chinese suppliers. The authors observe that faster production lines and increasing production volumes are typical in manufacturing plants. These lead to unreasonable assignments and extend work hours beyond what is deemed by the workforce to be acceptable. This study is an attempt to identify the root causes of job dissatisfaction leading to turnover and implications for mitigating labor-related supply chain risks.The paper identifies three major aspects of supply chain risk: cost risk, operational risk and reputation risk. It is useful to note that all three of these risks are impacted by labor management practices in suppliers manufacturing plants. To understand labor turnover issues, the authors invoke Mobleys model that describes labor turnover process as evolving through ten stages (Mobley, 1977): evaluating the existing job, experiencing job dissatisfaction, considering quitting, evaluating quitting and job search costs, intending to search for alternatives, searching for alternatives, evaluating alternatives, comparison with present job, intention to quit and actual quitting. The authors also invoke Lee and Mitchells unfolding model (1994). This theory utilizes the notions of market pull and psychological push. Empirical studies have shown that both these models are useful in understanding employee turnovers. Using the constructs from these theories, the authors carried out an empirical study of Chinese workers. The survey yielded 634 usable responses for a response rate of 21.13%. The data were analyzed using Logit regression analysis with the ratio of probability of quitting to probability of remaining as the dependent variable, and human resources management, production operations management, buyer characteristics, job conditions, compensation and opinions of industry as independent variables. The results of the analysis show that human resources management practices are statistically significant and therefore, are important in retaining employees and reducing turnover. The analysis also showed that opinions about the buyer were statistically significant.The study by Jiang et al. has two implications for supply chain risk management. First, since human resource management and compensation issues were shown to be important, it is important for buying firms to carefully evaluate and qualify suppliers before entering into supply contracts. It is not clear that extant literature has emphasized these sufficiently. Generally the emphasis has been on process and product related capabilities, and financial strength of suppliers. The results of the study point to an important dimension of supplier qualification in international sourcing. Second, buying firms must invest in supplier firms to develop their capabilities. Without such investments, supplier capabilities might lag the continually evolving demands placed on them by the buyers over time. In the absence of these proactive actions by supplier firms, supplier performance in terms of cost, quality, delivery and flexibility might degrade to a point that they might pose a variety of risks to the supply chain.4 Planning for catastrophic events in supply chainsIn their paper, Knemeyer, Zinn, and Eroglu develop a proactive process for effectively planning for catastrophic events in supply chains. They discuss the importance of planning for events such as terrorist attacks, earthquakes, floods, East Coast blackout in the summer of 2003, West Coast port strike, and hurricanes in the Gulf Coast region in the summer of 2005. While the probability of occurrence of catastrophic events is small, the business impact associated with such events can be extremely damaging (Brindley, 2004). Thus, it is critical for supply chains to have planning systems in place that enable them to respond effectively to such events. According to the authors, due to the increasing emphasis on efficient supply chains with limited slack resources, the ability of firms to cope with catastrophic events is limited, which makes this issue even more critical for companies. The main contribution of their paper is in proposing a sequence of steps that firms can utilize in proactively planning for catastrophic events in supply chains by drawing from the extant research in risk management with specific emphasis on Paul Kleindorfers framework for risk analysis (Cohen and Kunreuther, 2007). The proposed proactive planning process in this research involves four critical steps, they are: identification of key supply chain locations and threats, estimation of probabilities and loss for each location, evaluation of alternative countermeasures for each location, and selection of countermeasures for each location. Each of these steps is briefly discussed below:According to the authors, a location in a supply chain is considered as a key location if the interruption of its activities results in a major disruption in the flow of goods and services. Examples can include a sole sourced supplier, a major distribution center, and production plants. The authors propose utilizing some of the approaches developed in extant research such as Disruption Analysis Network methodology (Wu et al., 2007), which assists in identifying how the effects of disruptions propagate throughout a supply chain, and supply chain mapping analysis (Gardner and Cooper, 2003) for identifying key locations. After identifying key locations, the authors suggest applying approaches proposed by Mitroff and Alpaslan (2003), Chopra and Sodhi (2004), and Svensson (2004) for potential threat identification.The next step in the proactive planning process is the estimation of pr