Operations

Management

Tamizhvanan R
REG NO 1421330, SECTION MBA L

Review of a Research
Article

Article Details
Title: An Emergent Framework for Supply Chain Risk Management and Performance Management
Authors: B.Ritchie and C.Brindley
Journal: The Journal of operational research society, Vol 58, No 11(2007)
URL: hhtp://www.jstor.org.stable/4622835
Review on Emergent Framework for Supply Chain Risk Management and Performance
Measurement
Risk Management is one of the key problem in manufacturing, retailing and service sectors, and
Supply chain Management being an integral part of all the sectors also faces certain risk.
Risk is the extent to which the uncertainty of the outcome or decision is realized and it is
classified into exogenous and endogenous risk. Decisions are need to be taken in such a way that risk are
eliminated and if unavoidable it must be ensured that it will have a minimal impact on the outcomes.
Supply chain and risk all together form a different perspective in risk management as decision
affect a chain of networks and nodes. To overcome this Supply chain risk management framework is
designed in such a way that they form an interactive, parallel and repetitive process.
1. Risk context identifies the conceptual level of supply chain
2. Risk drivers are the external and internal environmental factors, supply chain configuration,
Industry specific factors the maximizes the risk and affects the performance.
3. Decision makers The factors influencing the decision making process are Individual or groups,
Perception about the risk, attitude, experience in the past.
4. Risk management response These response are the activities that are designed to address
profitability, risk exposure, timescales and portfolios. This involves
i.
Identification of risk drivers
ii.
Measurement of consequences
iii.
Alternative responses
iv.
Pro-active or Acceptance of risk
v.
Mitigation of risk
vi.
Avoidance of risk
vii.
Monitor and review of risk
5. Performance outcomes Here the performance outcomes are measured in two terms efficiency
and effectiveness related to the business perfoemance.On a three dimensional scale it is measured
as outcomes of Profit, Risk and Time.
6. Risk Management influencers This comprises of four key elements such as
Rewards Balancing the process between potential outcomes and risk

Supply Chain Risk It is a multi-dimensional. In Node Concentric Risk Only risk

involved on that particular node is focused in a network, whereas in Chain diversified
risk the network and the each nodes reaction and impact within the network is considered
as a whole.
Time Scale This plays a vital role in risk management decision process, as it gives a
clear resolution of the risk involved and the impact of the decisions involved in it.
Portfolio This indicates the operational strategy of the organization as they operate
either on a single linear chain or multiple chains. It helps in the dimension of decision
making.
Research Methodology
Here iterative process of review of literature and research is followed. This involves longitudinal
study in the field of supply chain management. Qualitative and quantitative method are used to collect
data and it is subjected to analysis to derive the conclusions
Criticism
Initially authors clearly explain the importance of risk management and also mention its a key
factor in performance measurement. Then they differentiate how risk management of supply chain
management is different from other risk management in other process and substantiate them with concrete
reason for their differentiation. They develop a clear Supply chain Risk Management frame work based
on extensive research and literature review. They have demonstrated that each step is a parallel and
iterative framework with significant classification in each steps and helps us to focus on the risk with a
better resolution. Finally they provide the evaluation parameters or the decision making parameters for
this framework.
Thus this research paper provides a complete view on risk management in supply chain and a
detailed frame work on risk management and performance improvement.