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1. Introduction
Effective supply chain (SC) risk management has become a major strategic requisite of global SCs (Ritchie and Brindley, 2007). This tendency emanates from the fact that risks and uncertainties have been generated by contemporary strategies for SC efficiency, such as the exploitation of globalisation, inventory reduction, centralised distribution and production, supply base reduction, lean operation and outsourcing (Revilla and Saenz, 2017; Rotaru et al., 2014; Blackhurst et al., 2011; Jüttner et al., 2003). For instance, although the proliferation of global offshore manufacturing has given cost advantage and access to the rapidly growing markets for multinational corporations, greater risks and uncertainties are encountered along global SCs, such as transportation risks, exchange rate risks and cultural risks, due to the inherently more complex nature of global sourcing and international logistics (Prater et al., 2001). Hence, the development of SC risk management has been a natural response in recognition of these increasing risks (Christopher and Lee, 2004).
It has been debated whether innovation is an enhancer or a reducer of business risks (Klein-Schmeink and Peisl, 2013). SC innovation is a complex process to generate information processing and new logistics services by utilising technology innovation and process innovation in order to offer solutions for customer requirements and identify new ways to better processes (Lee et al., 2011). As such, it can not only improve operational capability, but also augment risk management capability by acting as a catalyst to facilitate numerous activities such as enhanced planning, monitoring, forecasting and purchasing in complex SC practices. Leading firms, such as Microsoft, Samsung and Apple, have strived to embed SC innovation into their practices and operations along the global SC. Also, global logistics firms, such as DHL, FedEx and UPS are trying to make innovative improvement in logistics-related capabilities (Golgeci and Ponomarov, 2013) as is Panalpina. This is attributed to the fact that the firms or SCs that have a higher level of innovation are considered, as early adopters, to be more technically sophisticated, better at risk-taking and more integrated with SC partners. This means that they can more successfully reduce risks, disruptions and uncertainties by having more of a focus on developing risk management capability than later adopters (Tidd, 2010).
SC risk management has been...