What is Vulnerability (in Supply Chain)

Risk management issues have been widely researched in areas such as system engineering, business management, financial planning, market research, and service industry. Many approaches have been proposed to reduce or minimize risks, maintain productivity or profitability in organizations. However, different risk management strategies are needed under different situations and different industries. In this chapter, the authors address the theme of risk management in supply chains. They begin by reviewing the metrics of supply chain performance, followed by design and development of supplier relationship management process, and a failure modes and effects analysis (FMEA)-based approach to identify and evaluate the potential risks in the process of commodity procurement. After analyzing the causes and effects of potential risks in procurement, they develop a strategic plan to monitor and control risk management and implement continuous improvement. A case study is provided for supplier selection and buyer-supplier relationship management.