Securing the upstream supply chain: a risk management approach

Abstract

Supply managers must manage many risks in their increasingly competitive environments. Traditionally this meant buffering against uncertainties, which sub‐optimized operational performance. Risk management can be a more effective approach to deal with these uncertainties by identifying potential losses. This conceptual study proposes that situational factors‐ degree of product technology, security needs, the relative importance of the supplier, and the purchasers’ prior experience with the situation should be taken into consideration when determining the level of risk management in the supply chain. Doing so can avoid unforeseen losses and lead to better anticipation of risks.