Supply Chain Risk and Organization Vulnerability

Supply chain risk management (SCRM) is a process that aims to assess and mitigate vulnerabilities that can generate negative outcomes such as cost increases, quality issues, or business interruption along the supply chain. These vulnerabilities can stem from the global environment, from the complex relationships with other firms in the supply chain, and from internal operations. One effective and efficient managerial process to cope with these vulnerabilities requires optimizing the Cost of Risk (CoR) indicator, which is a quantitative measurement of losses due to risk and the cost of risk management investments (i.e., risk control and risk financing strategies). Besides SCRM, companies also need to address vulnerabilities building resilient supply chains to recover quickly from unexpected events impacting supply chain performance. The resilience and risk management perspectives work in parallel to ensure supply chain continuity.