ABSTRACT

Supply chain risk management (SCRM) focuses on developing new approaches for the management of disruptions. The field of SCRM has originated from the idea of Enterprise Risk Management (ERM), the paradigm for managing the portfolio of risks that threaten organizations (Gordon et al., 2009). It is a challenge to capture the multi-dimensional and inter-dependent behavior of the risks. Raw material passes through various processes, geographic and political regions, changes ownerships and modes of transportation before reaching the end customers in the form of the finished product (Handfield and Ernest, 2002; Stecke and Kumar, 2009). All of these processes expose potential points where supply chains are vulnerable to disruptions. Modern supply chain trends such as globalization, decentralization, outsourcing and Just-In-Time are introduced to try and make supply chains efficient. However, this has led to an increase in the number of exposure points (Stecke and Kumar, 2009). In order to identify these failure points within the network, supply chain systems need a holistic perspective to understand and capture the complex network of interconnected nodes. Complexity within the supply chain system can be defined as a condition occurring due to the association of numerous inter-related and inter-dependent entities in the supply system using several process inter-connections. System-oriented and holistic approaches to risk management are identified in the SCRM literature as important in complex, uncertain and volatile global environments (Harland et al., 2003; Oehmen et al., 2009; Tang and Nurmaya Musa, 2010). Systems thinking may provide a methodological and structured approach to risk management due to its ability to consider the systemic environments within the larger system. It is necessary to look at supply chain systems from a ‘system of systems’ perspective. Systems thinking supports in capturing the dynamic, complex and inter-dependent nature of the system (Sterman, 2000). This research intends to study the portfolio of supply chain risks through three distinctive phases such as concept development, implementation and evaluation.