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date: 17 February 2020

Abstract and Keywords

This article discusses disruptive supply chain risks that can have large negative impacts on the supply chain’s performance. Using stylized network models and examples, the article first looks at how to incorporate probability in supply chain design given the difficulty of estimating the probability of a disruption. Next, the article deals with two fundamental strategies a supply chain designer can use to mitigate the effects of disruptive risks: (a) containment, i.e., containing the risk, and (b) tailoring reserves like capacity and inventory. Finally, the article discusses how a company can respond to disruptions. These response considerations need to be taken into the supply chain configuration as well.

Keywords: Disruption, probability, supply chain design, supply chain risk, mitigation, containment, tailoring reserves, response, supply chain configuration

Sunil Chopra

Sunil Chopra is the IBM Distinguished Professor of Operations Management in the Kellogg School of Management at Northwestern University.

ManMohan S. Sodhi

ManMohan S. Sodhi is Professor of Operations and Supply Chain Management at Cass Business School, City University London and Executive Director, Munjal Global Manufacturing Institute, Indian School of Business. His research is broadly in the area of supply chain management and more specifically in supply chain risk. Prior to his academic career, he worked at Accenture and at other consulting firms with clients in consumer electronics, commodity and specialty chemicals, petroleum products distribution, hospitality industry procurement, and airlines. He has taught at the University of Michagan Business School (Ross) and has a PhD in management science from the UCLA Anderson School.

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