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Supply-chain risk management is aimed at managing risks in complex and dynamic supply and demand networks. [1] (cf. Wieland/Wallenburg, 2011)Supply chain risk management (SCRM) is "the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity".
Safety stock is held when uncertainty exists in demand, supply, or manufacturing yield, and serves as an insurance against stockouts. Safety stock is an additional quantity of an item held in the inventory to reduce the risk that the item will be out of stock.
Harrison summarized when to use each one of the three supply chain strategies: A push based supply chain strategy is usually suggested for products with low demand uncertainty, as the forecast will provide a good indication of what to produce and keep in inventory, and also for products with high importance of economies of scale in reducing costs.
Human factors influencing the behavior in supply chains are largely unexplored. However, studies suggest that people with increased need for safety and security seem to perform worse than risk-takers in a simulated supply chain environment. People with high self-efficacy experience less trouble handling the bullwhip-effect in the supply chain. [10]
There may be uncertainty regarding the best technological process, or when a superior technology may be invented. Furthermore, external uncertainty can be influenced by powerful firms which can establish standards for product specifications while small firms have to adjust to this. Finally, uncertainty can arise from within the firm as well.
A supply chain is thus interpreted as a social-ecological system that – similar to an ecosystem (e.g. forest) – is able to constantly adapt to external environmental conditions and – through the presence of social actors and their ability to foresight – also to transform itself into a fundamentally new system. [5]
A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product. A supply chain encompasses everything from the delivery of source materials from the supplier to the manufacturer through to its eventual delivery to the end user.
Uncertainty in the VUCA framework occurs when the availability or predictability of information in events is unknown. Uncertainty often occurs in volatile environments consisting of complex unanticipated interactions. Uncertainty may occur with the intention to imply causation or correlation between the events of a social perceiver and a target ...