What lurks beneath

Deep supply chain risks

Authored by: Yossi Sheffi

The Routledge Companion to Risk, Crisis and Security in Business

Print publication date:  June  2018
Online publication date:  June  2018

Print ISBN: 9781138643109
eBook ISBN: 9781315629520
Adobe ISBN:

10.4324/9781315629520-7

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Abstract

In this chapter, a series of case examples shows how modern global supply chains experience new categories of risks that arise far outside the four walls of the company and its direct business partners. Globalization, product complexity, and lean manufacturing have created broader and deeper supply chains that generally run more efficiently but are now more prone to serious disruption from very distant events. Concentrations of production capacity at the company, industry, and natural resource levels create vulnerable links outside a company’s normal span of control. As a result, distant disruptions can now propagate further along supply chains and can even disrupt companies in lateral industries. The chapter describes six general methods that companies are using to better manage their extra-enterprise risks through increased information, stronger controls, and cooperative industry-level initiatives to mitigate deep supply chain risk.

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