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Introduction
While research on risk management is extensive and crosses over various academic disciplines at the firm level, it is imperative that risk management also be studied within a supply chain context in which the unit of analysis is the supply chain rather than the firm. Though the nature of risk does not change, the exposure profile of a supply chain to such risks is different from that of a single firm. On the one hand, the structure and practices of supply chains make the participating firms more vulnerable to the traditional risks encountered by single firms. The widely used just-in-time (JIT) inventory system is a typical example of a supply chain practice that exposes firms to material shortage risk. On the other hand, the structural characteristics of supply chains also allow firms to join forces to minimize such risks. For example, information sharing among members of the supply chain is known to reduce the bullwhip effect.
Supply chain risk management (SCRM) entails managing risks that can hinder the performance of supply chains. SCRM is a developing area of research as indicated in, among others, Juttner et al (2003), Juttner (2005), Tang (2006a), Khan and Burnes (2007), and Manuj and Mentzer (2008b). This article contributes to this research through the development of an SCRM framework and an accompanying risk management planning process that help the user set a comprehensive risk management strategy. The framework is based on a typology involving three constructs of risk. These constructs are 'risk domain', 'source of risk' and 'adverse event'. Risk management approaches are classified in the framework as 'avoidance', 'prevention' and 'mitigation' approaches. The framework developed associates various risk management methods found in the literature with identified risks.
Manuj and Mentzer (2008a) define global SCRM as 'the identification and evaluation of risks and consequent losses in the global supply chain, and implementation of appropriate strategies through a coordinated approach among supply chain members'. Three major elements can be elicited from this definition of SCRM: risk identification and evaluation/assessment, global supply chain and coordinated risk management strategies. We structure our work in the next three sections around these elements. In the section following, we review papers on risk identification and assessment. Because of scant coverage of risk identification and assessment...