Supply Chain Risk Assessment in the Ornamental Fish Supply Chain

Supply Chain Risk Assessment

The risk is the chance of danger, damage, loss, injury or any undesired consequences. Royal society (1992) defined risk as “The probability that a particular adverse event occurs during a stated period of time, or results from a particular challenge. As a probability in the sense of statistical theory, risk obeys all the formal laws of combining probabilities”. The consequences of risks are not easy to manage. Critical incidents may influence another member of the supply chain in a hostile manner and distort their perception of the company or the brand.

Supply chain risk management is the management of supply chain risks through coordination or collaboration among the supply chain partners so as to ensure profitability and continuity (Tang, 2006). Norrman and Lindroth (2002) defined supply chain risk management as collaborating with parties to deal with risks and uncertainties caused by or impacting on logistics related activities or resources. The aim of supply chain risk management is the identification and management of risks for the supply chain, through a coordinated approach among supply chain members to reduce supply chain vulnerability as a whole (Juttner et al., 2003). Supply chain vulnerability is an exposure to serious disturbance, arising from risks with in the supply chain as well as risk external to the supply chain. There is no clear consensus on the definition of supply chain risk management (Sodhi & Tang, 2012).

The term ‘risk’ is a vast and multidimensional construct. Numerous interpretations of ‘risks’ are seen the academic sphere. The variance-based definitions drawn from classical decision theory are deliberated mostly, where risk is the variation in the distribution of possible outcomes, their likelihoods, and their subjective values. In the hazard focused risk measurement, the numeral value of risk can be measured in terms of probability of the given event multiplied by the negative business impact. March and Shapira (1987) consider risk as the variation in the distribution of possible outcomes, their likelihoods, and their subjective values. Zsidisin et al. (2003) defined risk as a detrimental event with relatively high likelihood and that event has a significance associated with impact or cost. Peck (2006) proposes risk as a “measure of the possible upside and downside of a single rational and quantifiable decision”. Stemmler (2006) describes that “…risk denotes the chance of danger, loss or injury…” Supply chain risk management has to deal with all aspects of risk pertinent to it.