Disruption in Supply Chain

2. Supply Chain Disruption

Supply chains are exposed to different types of risks among which disruption is a particular type. Wagner and Bode (2006) have a discussion about the meaning of risk. Risk can have two aspects: negative aspects and positive aspects or in other words, danger and opportunity (Mitchell, 1995). As far as this chapter is about the disruptions, which are destructive, the same approach to risk (as Wagner and Bode (2006), in which risk is considered to be negative) is considered. According to the definition of Juttner et al (2003), supply chain risk is ‘‘variation in the distribution of possible supply chain outcomes, their likelihood, and their subjective value’’. Chopra and Sodhi (2004) classifies the risks of the supply chain as disruptions, delays, systems, forecast, intellectual property, procurement, receivables, inventory, and capacity. Knowing the relation between risk and disruption, here we define disruptions as “random events that cause a supplier or other elements of the supply chain to stop functioning, either completely or partially, for a (typically random) period of time.” Snyder et al. (2010) The authors of the recent paper by addressing different supply chain uncertainties as yield, capacity, lead-time and input cost uncertainty, point out that disruption is more like the yield uncertainty of the supply chain. The misunderstanding that supply chain disruptions are rare events has been described in Snyder et al. (2010) and referring to Wal-Mart emergency operations center, they explain that some kinds of disruptions may occur frequently.