Int. J.

Production Economics 133 (2011) 25–34

Contents lists available at ScienceDirect

Int. J. Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Identifying risk issues and research advancements in supply chain

risk management
Ou Tang a,c, S. Nurmaya Musa a,b,n
a
Department of Management and Engineering, Linköping University, SE-581 83 Linköping, Sweden
b
Department of Engineering Design and Manufacture, University of Malaya, 50603 Kuala Lumpur, Malaysia
c
School of Economics & Management, Tongji University, Shanghai 200092, PR China

a r t i c l e in fo abstract

Available online 3 July 2010 The purpose of this paper is to investigate the research development in supply chain risk management
Keywords: (SCRM), which has shown an increasing global attention in recent years. Literature survey and citation/
Supply chain co-citation analysis are used to fulfil the research task. Literature survey has undertaken a thorough
Risk management search of articles on selected journals relevant to supply chain operations management. Meanwhile,
Citation/co-citation analysis citation/co-citation analysis uses Web of Sciences database to disclose SCRM development between
1995 and 2009. Both the approaches show similar trends of rising publications over the past 15 years.
This review has piloted us to identify and classify the potential risk associated with different flows,
namely material, cash and information flows. Consequently, we identify some research gaps. Even
though there is a pressing need and awareness of SCRM from industrial aspect, quantitative models in
the field are relatively lacking and information flow risk has received less attention. It is also interesting
to observe the evolutions and advancements of SCRM discipline. One finding is that the intellectual
structure of the field made statistically significant increase during 2000–2005 and evolved from
passively reacting to vague general issues of disruptions towards more proactively managing supply
chain risk from system perspectives.
& 2010 Elsevier B.V. All rights reserved.

1. Introduction the emerging uses of enterprise resource planning (ERP) solutions

such as Oracle and SAP have cut down the information transaction
Production in the early years was simple, with single flow of time and reduced the incidents of inaccuracy and redundancy.
products moving from raw material suppliers, to manufacturers Vast assistance from these systems has, however, exposed to
and then to markets. Nowadays, shorter product lifecycle and another consequence, namely information disruption.
increasing demand among all have led to a complicated supply All the above changes have inevitably increased the impor-
chain. Due to cost pressure and competitive advantages, compa- tance of supply chain risk management (SCRM). One typical
nies are adopting globalization and outsourcing strategies. This example is Ericsson’s crisis in 2000. Since a single-source policy
also requires an extended supply chain network, hence increases was used, a fire accident in its chips’ supplier immediately
the nodes in the system. In addition, many companies have disrupted the material supply. Ericsson’s loss was estimated to
introduced lean production concepts, which intend to remove reach USD 400 million in the T28 model (Norrman and Jansson,
‘‘wastes’’ from a supply chain, for instance, by reducing the 2004). In June 2008, Volvo Cars reported 28% reduction of sales
number of suppliers. This helps in smoothing the operations but it compared with the same period in previous year, with the biggest
would also create problems if unexpected events happen in a loss in its SUVs for about 50%. Fredrik Arp, CEO of Volvo Cars
supply chain. The rising use of internet helps supply network in stated that ‘‘the weak dollar reduces the revenue and it will further
sharing information visibility (Christopher and Lee, 2004; Lee, reduce the opportunities for R&D’’. Another example is the Taiwan
2002, 2004; Narayanan and Raman, 2004). It is indubitable that earthquake in December 2006, which caused breakage in under-
sea cables and slowed down internet. One immediate effect is a
prolonged waiting time of containers in the Shanghai sea port in
n
Corresponding author at: Department of Management and Engineering, China, since all claim procedures rely on information systems.
Linköping University, SE-581 83 Linköping, Sweden, Tel.: + 46 13 285785;
fax: + 46 13 281101.
Nature disaster, terrorist attack, labor strike, accidents can all be
E-mail addresses: [email protected] (O. Tang), the causes for supply chain disruption and delay (Berger et al.,
[email protected], [email protected] (S. Nurmaya Musa). 2004; Christopher and Lee, 2004; LaLonde, 2004; Norrman and

0925-5273/$ - see front matter & 2010 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2010.06.013
26 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34

Jansson, 2004; Poirier et al., 2007; Quinn, 2006; Tang, 2006a). The Table 1
above examples show that any material, financial or information List of journals reviewed.
risk could create problems in a supply chain. Any hiccup
I: Business/Management Review
transpired within the supply chain will cause delay and even California Management Review
disruption (Buzacott, 1971). Disruption does not only halt the Decision Sciences
supply chain operations but without preparation and precaution, Harvard Business Review
it takes time for the affected system to recover (Sheffi and Rice, Interfaces
MIT Sloan Management Review
2005; Hendricks and Singhal, 2005. Supply Chain Management Review
The above background provides the motivation to investigate
the current trend and issues in SCRM. Our main objective is II: Operations management journals
through literature review to (i) define the important risk issues International Journal of Logistics Management
International Journal of Logistics: Research and Application
and mitigation techniques in SCRM; (ii) understand the research
International Journal of Operations and Production Management
trend both from industrial and academic perspectives; and (iii) International Journal of Physical Distribution and Logistics Management
identify the possible research gaps and opportunities in the field. Journal of Operations Management
Production and Operations Management
Supply Chain Management: An International Journal

2. Research process
III: MS/OR type journals
European Journal of Operational Research
This study is based on the review of existing literature using International Journal of Production Economics
two approaches; literature survey as well as basic bibliometric International Journal of Production Research
Journal of the Operational Research Society
method of citation and co-citation analysis. Before we present the
Management Science
details of these two approaches, we need to clarify some Omega
definitions. Operations Research
Production Planning and Control

2.1. Risk definition

addition, journal is selected only if it is related to supply chain

In SCRM literature, there exist various definitions of risk. In
management. The list of journal is given in Table 1.
particular, it is not clear to distinguish risk and uncertainty in
Based on the description of definitions in previous section, we
supply chain operations. Risk sometimes is interpreted as unreliable
use search keywords supply chain, supply chain risk or supply chain
and uncertain resources creating supply chain interruption,
risk management together with risk or uncertainty. After obtaining
whereas uncertainty can be explained as matching risk between
these articles, we use the criteria ‘‘high impact and low
supply and demand in supply chain processes. We believe that two
probability risk’’ to filter the most relevant ones. Finally we have
dimensions are important in discussing risk: the outcome of risk
shortlisted and reviewed 138 articles between the years of 1995
impact and expectation of risk sources. As in most literature, we
and the first half of 2008.
also agree that risk issue is associated with negative consequences
of impact (Christopher and Lee, 2004, Paulson, 2005, Spekman and
Davis, 2004, Wagner and Bode, 2006). However, the second 2.3. Citation and co-citation study
dimension, expectation of risk is difficult to define. Should risk
event be expected (as supplier has quality deficiencies experienced
The study result in literature survey is subject to the articles
by Robert Bosch GmbH, Wagner and Bode, 2006) or unexpected
chosen within limited number of journals selected. Thus we
(such as wars, strikes or terrorist attacks, Christopher and Lee, 2004;
propose citation/co-citation analysis to comprehend our findings.
Kleindorfer and Saad, 2005; Quinn, 2006)? Furthermore, could the
Citation/co-citation analysis is a quantitative method and it
expectation be described by probability and how? These questions
adopts bibliometric approach to investigate the structures and
have been debated for centuries and these are the reasons for
evolution of research in a particular discipline, in this case, SCRM.
having vague definitions of risk.
In particular, citation analysis is used to obtain some statistics
In our opinion, a better definition of supply chain risk should
data relating to gathered publications. Meanwhile, co-citation
refer to (i) events with small probability but may occur abruptly
approach serves very well for the purpose of defining the
and (ii) these events bring substantial negative consequences to
intellectual structures in the area (Pilkington and Meredith, 2009).
the system. Consequently, we follow the SCRM definition from
Citation/co-citation analysis has its limitation in terms of the
Tang (2006a) ‘‘the management of supply chain risk through
search method. In our case, articles are gathered based on
coordination or collaboration among the supply chain partners so
searching abstract and keywords, which are provided by either
as to ensure profitability and continuity’’.
authors or journal editors. However, the keywords used and the
abstract presented might not always get aligned with our needs,
2.2. Literature survey since authors often have own reasons and styles in highlighting
their articles. Thus, we could gather some articles irrelevant to the
Literature survey aims at understanding the important issues study, or we may have missed some relevant articles. In order to
and mitigation techniques in SCRM, including the current status reduce this problem, we limit our search on Web of Sciences
and the development tendency in the area. Thus we attempt to (WoS) database. Even though WoS has its limitation on the
make a thorough search of articles in related publication number of journals in the database (as compared to Scopus for
databases. Articles are selected from business review journals, instance), it is very selective and covers only peer-reviewed
operations management journals, as well as management science journals with high impact factors. As a result, WoS often includes
or operations research (MS/OR) type of journals. The operations high-cited articles, which are more rigid in keywords assignment
management journals can be either conceptual modeling or and abstract presentation.
quantitative modeling orientated, in order to understand the We then use the same search keywords on WoS database and
practical needs as well as the theoretical development in SCRM. In attempt to disclose SCRM development during 1995–2009. The
 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34 27

time horizon has been divided into three segments such as T1 Table 2
(1995–1999), T2 (2000–2004), and T3 (2005–2009). In total 236 Main issues discussed over the years by literature reviews findings.
articles have been obtained and examined by keywords co-
1995–1999 2000–2004 2005–2008
occurrence. (cf. Pilkington and Meredith (2009) for details on
citation/co-citation analysis.) Operation strategies Operation strategies Financial risk
We have to note that the two search methods end with management
different number of articles, since we have not performed any Financial risk Supply chain partners Operation strategies
management relationship
journal refinement in WoS search. Thus some journals, which do Information management Environmental
not have supply chain management as a main scope are included Political and cultural Information management
as well. Also WoS search has been performed up till December practices
2009 as compared to June 2008 in literature survey. Finally the Environmental Outsourcing to low cost
countries
applications BibExcel and Pajek are used for multidimensional
scaling, cluster analysis and factor analysis on co-citations
approach.
increases. Main issues vary from operation plans to relationship of
2.4. Supply chain operations framework supply chain partners. In the same time period, we also note the
emerging of studies on information technology and information
Supply chain is a complicated production system. One flow. Meantime, we also note a rising discussion on globalization
important change in managing supply chain is the emphasis on risk associating with political and cultural practices.
integrating activities into key supply chain processes instead of A dramatic increase of publications starts in 2004, from which
individual functions. With regard to SCRM, managerial aspect may SCRM exhibits a steady rising of interest from academic
not be the same when considering the inbound and outbound researchers and practitioners. Challenges and opportunities of
sides. For instance, when we discuss the risk in terms of supplier outsourcing to low cost countries are the favorite discussion
selection, a major concern is to sustain the flow of raw material. topics. Others include supply chain partner relationship, supply
However, on the demand side, financial risk (such as customer’s chain environmental, economy and political issues and growth of
possibility of bankruptcy) may appear more important. information sharing and security. Several studies on financial risk
However, there was no clear evidence of flows interlinking as are also noted. A summary of supply chain risk studies obtained
well as integrating activities in previous SCRM studies, possibility from literature reviews is given in Table 2.
due to its complexity. Therefore, in this paper, we will identify the Our study also shows that main SCRM articles are found in the
flows in the forms of material, financial and information. In business or management review journals (cf. Table 1) with 41%.
addition, we will analyze the system process of source (supply), The next group is operation management journals of 34%, among
make (production) and deliver (demand), based on Supply Chain which most are conceptual models. After year 2000, more
Operations Reference (SCOR) Model. We define material flow as quantitative orientated articles were published. However, the
physical movement of products from suppliers to customers. number of articles compared to qualitative orientated ones is still
Letters of credit, timely payment of bills, bankruptcy, payment considerably small. This indicates a growing awareness of SCRM
schedules, credit terms and suppliers’ contract fall under the in industry, but still there is a lacking of quantitative models for
category of financial flows. Finally, the information flow is used to system analysis and decision supporting.
keep all supply chain elements updated and hence provides
resources for decision making. Examples of information flow are 3.2. Major risk issues
order status, order delivery and inventory status, among others.
Similar thoughts appear in Chopra and Sodhi (2004), Johnson In this section we summarize the major risk issues according
(2001) and Spekman and Davis (2004), in which the authors to our literature survey. For a detail description of various risks in
identify risks in the form of other flows. supply chain, we refer to Tang (2006a), although the author
presents a different study aspect. We further identify risks in
material, information and financial flows, which are necessary in
3. Results
operating a supply chain no matter how simple or extended it is.

3.1. An overview of literature survey

3.2.1. Material flow risk
This section presents an overview of literature survey. The We first investigate the material flow, which involves physical
number of publications on each year is indicated in Fig. 1. Main movement within and between supply chain elements. We
issues discussed during the year 1995 until 1999 include financial further categorize perspectives of risk events into the stages of
risk management and operations strategies such as adoption of source, make and deliver. The results are summarized in Table 3.
lean concept and early supplier involvement (Table 2). Between Source involves inquiring physical products or services. Typical
years 2000 and 2003, the number of articles in SCRM slowly risk issues are single sourcing risk, sourcing flexibility risk,
supplier selection/outsourcing, supply product monitoring/qual-
ity and supply capacity. Ericsson’s inability of reacting to a
29
supplier’s fire accident is the consequence of single sourcing risk
22 21 23
(Peck et al., 2003). On the other hand, flexible supplier sourcing
has benefited firms in having alternatives in the case of capacity
12 constraint or hazardous disruption, but it may, as Kamrad and
6 8
3 4 4 5 Siddique (2004) and LaLonde (2000) note, still bring a hidden cost
0 1
and managerial difficulties when switching suppliers. Supplier
95 97 98 99 00 01 02 03 04 05 06 07 08* selection/outsourcing increase complexity of the supply process.
While outsourcing in a way reduces the manufacturing costs and
Fig. 1. Number of articles by year of publication (* up to June 2008). improves responsiveness, on the other hand, it has increased the
28 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34

Table 3
Material flow risk and mitigation techniques.

Risk elements Qualitative solution Quantitative solution

Material flow risk

Source
Single sourcing risk  Multiple sourcing (Norrman and Jansson, 2004)
 Alternative sourcing in and out of home country
(Fitzgerald, 2005)
 Resilience supply chain (Christopher and Peck, 2004;
Peck et al., 2003 )

Sourcing flexibility risk  Resilience supply chain (Christopher and Peck, 2004)  Real option model for flexible sourcing (Kamrad and Siddique, 2004)
 Multivariate analysis DSS (Kremic et al., 2006)
 Procurement contract model (Martı́nez-de-Albéniz and Simchi-Levi,
2005)

Supply product monitoring/  Alternative sourcing in and out of home country

Quality (Fitzgerald, 2005)

Supply capacity  Alternative sourcing in and out of home country

(Fitzgerald, 2005)
 Outsourcing (Johnson, 2001)
 Build a flexible web of partners (Johnson, 2001)
 Early supplier involvement (Handfield et al., 1999)

Supplier selection /outsourcing  Alternative sourcing in and out of home country  Decision-tree based optimization model (Berger et al., 2004)
(Fitzgerald, 2005)  Foreign suppliers supply risk ranking model (Levary, 2007)
 Avoid outsourcing/off-shoring: in-house/regional  Selection model based on cost, quality, responsiveness, strategic issue
manufacturing (Crone, 2006; Stalk, 2006) and operating constraint (Kirkwood et al., 2005)
 Incentive conflicts and coordinating contracts model
(Agrell et al., 2004)
 Simulated-based decision support system (DSS) model for
collaboration level selection (Cigolini and Rossi, 2006)
 Multivariate analysis DSS (Kremic et al., 2006)

Make
Product and process design risk  ESI (Handfield et al., 1999; Khan et al., 2008;
Peck, 2005)

Production capacity risk  ESI (Handfield et al., 1999; Khan et al., 2008;  Options contract model (Fang and Whinston, 2007)
Peck, 2005)
 Early warning system (Bovet, 2006)

Operational disruption  ESI (Handfield et al., 1999; Khan et al., 2008;  Optimization model (Tomlin, 2006)
Peck, 2005)
 Alternative sourcing in and out of home country
(Fitzgerald, 2005)
 Supply chain design (Kleindorfer and Saad, 2005)
 Operational hedging (Cudahy et al., 2008)

Deliver
Demand volatility/Seasonality  Postponement strategy (Bovet, 2006)  Postponement model (Tang, 2006b)
 Adopting/improvising information technology  OPP relocating opportunities and QR simulation (Wong and Hvolby,
(Lee, 2002, 2007) 2007)
 Mixed model (Lee, 2002, 2007)  Robust economic order quantity (EOQ) model (Sounderpandian et al.,
 Aligning interest (Lee, 2004) 2008; Yu, 1997)
 Licensing (Johnson, 2001)  Optimization model for optimal operating policy (Li et al., 2001; Wu,
 Increase number of channels (Johnson, 2001) 2006))
 Build longer life products i.e. rolling mix  Linear dynamic system model (Zhang, 2006)
(Johnson, 2001)  Incentive conflicts and coordinating contracts model (Agrell et al.,
 Lean manufacturing (Abernathy et al., 2000; 2004)
Geary et al., 2002)  Two-stage stochastic model using real option and financial options
 Operational hedging (Cudahy et al., 2008) (Ding et al., 2007)
 Application of best practices (Geary et al., 2002)  Options contract model (Fang and Whinston, 2007)
 Multi stage stochastic model (Goh et al., 2007)
 Equilibrium modeling to counter supply and demand risk (Nagurney
et al., 2005)

Balance of unmet demand and  Lean manufacturing (Abernathy et al., 2000;  Options contract model (Fang and Whinston, 2007)
excess inventory Geary et al., 2002)  Improvise contract with aligned incentives (Narayanan and Raman,
 Reduce inventory holding (Jüttner, 2005) 2004)
 Propose application of ‘‘demand-at-risk’’  Robust economic order quantity (EOQ) model (Yu, 1997)
(Sodhi,  Value-at-Risk model (Tapiero, 2005, 2007)
2005)
 Propose application of ‘‘inventory-at-risk’’
(Sodhi, 2005)
 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34 29

Table 3 (continued )

Risk elements Qualitative solution Quantitative solution

Supply chain scope

Logistics  Reduce transport content:- reduce the cumulative  Financial modeling (Hauser, 2003)
length of SC (Crone, 2006)
 Use transportation more efficiently: more-efficient
consolidated shipments or use third party provider
(Crone, 2006)

Price volatility of commodity/  Operational hedging (Cudahy et al., 2008)

alternative energy
Environment degradation and  Supplier initiatives evaluation (Cousins et al., 2004)
awareness  Invest in environmental protection effort (Economy
and Lieberthal, 2007)

Political risk  Operational hedging (Cudahy et al., 2008; Johnson,

2001)

Cultural and ethics

Supply chain partners  Discount contract module (Cachon, 2004)  Simulated-based decision support system (DSS) for collaboration level
relationship  Improvise contract with aligned incentives selection (Cigolini and Rossi, 2006)
(Narayanan and Raman, 2004)
 E-business loyalty (Reichheld and Schefter, 2000)

variation of choices and concerns, hence selecting the right obstructing the others are common. From the supply chain
supplier has become difficult. At the very least, supplier selection scopes, logistics, price volatility of commodity and alternative
should consider supplier reliability, country risk, transport energy, environment degradation and awareness, political risk,
reliability and supplier’s supplier reliability (Levary, 2007). When cultural and ethics, and supply chain partners relationship are other
a company decides to outsource globally, it is most likely cost- risk issues need to be concerned.
driven. However, not long, the unseen cost of outsourcing has
eventually unveiled, such as various taxes, fluctuating currency
3.2.2. Financial flow risk
exchange rates, import/export duties, increasing transportation
Financial flow risk involves the inability to settle payments
costs and suppliers audit costs (Crone, 2006; Fitzgerald, 2005;
and improper investment. The common risks are exchange rate
Kremic et al., 2006; Murphy, 2007; Stalk, 2006). Operational
risk, price and cost risk, financial strength of supply chain partners
performance such as transportation lead time could be another
and financial handling/practice. The results are illustrated in
concern. In addition, lacking of supply product monitoring creates
Table 4.
quality associated problems such as product safety and contam-
Research on exchange rate risk can be found at Li et al. (2001),
ination (Fitzgerald, 2005). Supply capacity is another form of risk,
Carr (1999), Goh et al. (2007) and Kouvelis (1999), among others.
if supply chain does not have an early supplier involvement in
With a global supply chain as a study scope, exchange rate has a
new product development (Khan et al., 2008).
major influence on firm’s after tax profit, supplier selection,
The major issues at make stage involve product and process design
market development and other operation decisions. Price and cost
risk, production capacity risk, and operational disruption. First, product
risk can be strongly attached with exchange rate, but its
and process design risk occurs with the inability to cope with
fluctuation may also be caused by scarcity of raw materials
changes, in particular associated with new product development
(Papadakis, 2006). Hendricks and Singhal (2005) study financial
stage (Khan et al., 2008) and product launch activity (Handfield
flow vulnerability and long-term effect of supply chain disrup-
et al., 1999). The issue is significant since it involves a big sum of
tions with focus on financial strength of supply chain partners. Their
capital spent in positioning products in the market. Production
empirical study also shows that this type of risk can be evaluated
capacity risk refers to technological, skills and quality capacities
based on the evidence of increasing equity risk, financial leverage
(Handfield et al., 1999). Finally, operational disruption often happens
and asset risk. The vulnerability of financial strength of a supply
due to operational contingencies, natural disasters and political
chain member, may easily affect the entire supply chain network
instability including terrorism (Kleindorfer and Saad, 2005).
(Peck et al., 2003; Tang, 2006b; Hartley-Urquhart, 2006), referring
On the deliver side, we have main risk issues such as demand
Asia’s financial crisis in 1997 as case in point. Finally Hartley-
volatility/seasonality, balance of unmet demand and excess inven-
Urquhart (2006) and Kerr (2006) discuss the risk arising from
tory. These issues are all affected by the forecasting difficulties
financial handling and practice. For instance, an increasing velocity
due to seasonality, volatility of fads, new product adoptions and
and quantity of payment should complicate the financial flow and
short product life (Johnson, 2001; Wong and Hvolby, 2007). In
need urgent attention. Lack of control and visibility of procure-to-
addition, due to rapid technology evolvement and customer
pay process may cause alleged illegal collection of excess vendor
demand changes, excess inventory may expose the obsolete risk,
markdown.
cf. the well-known case of inventory write-off in Cisco (Narayanan
and Raman, 2004).
In the above discussion, we focus on individual flow. We need 3.2.3. Information flow risk
to acknowledge that when discussing risk, these flows are related Value adding activities in a supply chain are often triggered by
and interconnected and therefore cases of one flow disruption information flows such as demand, inventory status, order
30 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34

Table 4
Financial flow risk and mitigation techniques.

Risk elements Qualitative solution Quantitative solution

Financial flow risk

Exchange rate risk  Operational hedging (Johnson, 2001)  Flexible sourcing model (Kouvelis, 1999)
 Two-stage stochastic model using real option and financial
options (Ding et al., 2007)
 Multi stage stochastic model (Goh et al., 2007)
 Optimization model for optimal operating policy
(Li et al., 2001)

Price and cost risk  Framework to enable SC driven profit growth (Bovet, 2006)
 Avoid low cost country (Stalk, 2006)
 Real options application (van Putten and MacMillan, 2004)

Financial strength of supply chain partners  Early-payment programs (Hartley-Urquhart, 2006)

 Stock-price benchmarking (Hendricks and Singhal, 2005)

Financial handling and practice  Early-payment programs (Hartley-Urquhart, 2006)

Table 5
Information flow risk and mitigation techniques.

Risk elements Qualitative solution Quantitative solution

Information flow risk

Information accuracy  Aligning interest (Lee, 2004)
 Implementation of CPFR, ECR, VMI concepts (Faisal et al., 2007)
 Chaos theory (Bradley, 2001)
 Application of best practices (Geary et al., 2002)
 Improvise inventory data handling and policies (Raman et al., 2001)

Information system security and disruption  Contingency planning (Finch, 2004)

 Assess and manage IS of the firm and SC partners (Finch, 2004)

Intellectual property
Information outsourcing  ‘Value-added’ outsourcing, ‘Co-sourcing’ and create ‘spin-off’
with vendors (Faisal et al., 2007)
 Improve visibility (Christopher and Lee, 2004)

fulfillment, product and process design changes and capacity 3.3. Results of citation and co-citation studies
status. One may also look at information flow as the bonding
agent between material flow and financial flow. Here we obtain Citation analysis shows similar trends of rising publications
issues such as information accuracy, information system security during the three time segments, based on both core articles
and disruption, intellectual property and information outsourcing (articles obtained from database search) and cited references
risk (cf. Table 5). (Fig. 2). A significant increase occurs in 2007. More interestingly,
The risk of information accuracy may cause by information the cited references show steady increase in 1990s with a
accessibility, information efficiency and data accuracy (Lee, 2002, dramatic rise in 2000. These beliefs resulted from the arising
2004; Geary et al., 2002; Raman et al., 2001; Giermanski, 2000; vulnerability issues, such as the Asian economic crisis in 1997.
Bradley, 2001; Faisal et al., 2007). Inaccurate information should By using the co-citation analysis, we note the emergency of
further affect decision making in supply chain. The threats of various clusters between three time segments T1, T2 and T3 with
information system security and disruption could be internally due to number of clusters 3, 11 and 9, respectively. The cluster is defined
ill-manage system, or externally by hackers and nature disaster from the keywords co-occurrence analysis. The results indicate
(Faisal et al., 2007). The information system risk can also be that the intellectual structure of SCRM field has made statistically
considered at application, organizational and inter-organizational significant increase in T2 and research has evolved from vague
levels (Finch, 2004). Intellectual property risk is associated with general issues of supply chain disruptions towards more specific
increasing information flow in supply chain network and in the yet global perspectives of risk. This can be seen in Figs. 3–5. In the
meantime inability of protecting information sharing, for instance time segment T1 (1995–1999), distinct areas such as operation
trade secret exposure (Barry, 2004). Information outsourcing allows management (T1-1), inventory theory (T1-2) and lean/product
company to focus on the core-competence. However, it also increases introduction (T1-3) are the only clusters, which are also studied
the risk of opportunism of vendors, information security apprehen- independently. In the time segment T2 (2000–2004), more
sion, hidden costs, loss of control, service debasement, disagree- clusters appear and some weak links have been established
ments, disputes and litigation and poaching (Faisal et al., 2007). between clusters for risk issues (cf. Fig. 4). In the time segment T3
 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34 31

Fig. 2. Development of core articles and cited articles for SCRM in 1995–2009.

business vulnerability (Sheffi and Rice, 2005; Svensson 2002; Peck

et al., 2003), which to some extent triggers the realization of
supply chain resilient (Rice and Caniato 2003; Sheffi and Rice,
2005; Christopher and Peck, 2004; Carter and Rogers, 2008).
These concepts revolve more on proactive risk responses rather
than on preventive risk actions. The literature survey brings a
consistent result as from the co-citation cluster analysis.
Nevertheless, the literatures on SCRM are mainly based on
qualitative approach and only a small fraction falls under the
Fig. 3. Keywords co-occurrence cluster for T1 (T1-1: operation management; T1- category of quantitative approach. According to the literature
2: inventory theory and T1-3: Lean, product introduction). survey, the majority of studies are conceptual models, overview
and exploratory reviews, empirical studies (industrial cases,
interviews and surveys). Among 138 papers, 78% belong to this
(2005–2009), the SCRM discipline shows further development, category. Many review articles cover some perspectives (but with
since the clusters are more integrated and many exhibit a strong different dimensions compared to this paper) of supply chain risk.
connection with integrated SCRM (T3-1) and liability management Frameworks have also been developed to explore the risk issues in
(T3-3) as well as inventory management (T3-5). supply chains and further propose mitigation techniques. A big
With co-citation analysis, we also obtain the top ten most portion of articles cover the sourcing issue with or without the
popular keywords (top vertices) used in the articles (Table 6). The combination of other supply chain elements. The empirical
keyword performance has been lately replaced by Innovation and studies also have a strong focus on sourcing policies. In addition
then management. By observing the change of these keywords, we most discussed and implemented methods are associated with
can see the changing attitude of researchers and practitioners material flow disruption risk, this can be illustrated as large
towards SCRM. We note that in T1, popular vertices such as number of references in Table 3 whereas relatively small numbers
performance and successes are associated with the reaction of risk in Tables 4 and 5.
impacts. In T2, technologies (vertices such as innovation, logistics Only a quarter of articles in literature propose quantitative
and EDI) are adopted to prevent risk, whereas in T3 attention has models in risk analysis, which again can be seen in Tables 3–5. In
been shifted to management and also from system perspective. The particular, quantitative methods are missing in information flow
study of SCRM thus has been changed from passively reacting to analysis. In the literature survey, typical quantitative approaches
risk events to actively managing them, and the focus has been are optimization, multivariate analysis, options contracts model,
changed from local to system aspect. In addition, Table 6 illustrates stochastic programming and simulation, real option.
the growing importance of information, cf. the appearance and
rank of the vertex information as in the second and third columns.
4. Discussions and conclusions

3.4. Remarks In this paper, we have reviewed recent literature relevant to

SCRM. The research tendency of the field has been investigated.
Dawning of this century shows opportunities of applying Empirical evidences have shown severe consequences after
modern supply chain concepts in SCRM, according to our supply chain disruptions, such as loss of profit, damage of market
literature survey. Enterprise risk management studies the var- share, etc. This leads to a general increasing interest in SCRM. The
iance between business strategies outcome and objectives need of having an integrated view of SCRM has been growing
(Dickinson, 2001; Chapman, 2006) whereas business contingency strong, according to the co-citation analysis. SCRM definitely
planning prepares oneself for the possibility of future emergency needs an integration of knowledge from multiple researches
or disruption (Rice and Caniato, 2003; Sheffi and Rice, 2005; disciplinary. In addition, the future analysis tools should aim at
Carter and Rogers, 2008). There are also rising discussions on proactively managing the supply chain risk.
32 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34

Fig. 4. Keywords co-occurrence cluster for T2 (T2-1: innovation, logistics; T2-2: interfaces, EDI; T2-3: production planning and management; T2-4: production planning
system; T2-5: organizational; T2-6: management strategies; T2-7: policies; T2-8: MRP; T2-9: facility planning; T2-10: contract and T2-11: cost).

Fig. 5. Keywords co-occurrence cluster for T3 (T3-1: integrated SCRM; T3-2: inventory models; T3-3: liability management; T3-4: human factors; T3-5: inventory
management; T3-6:earnings and returns; T3-7: agricultural; T3-8: financial risk and T3-9: Gen. Motor case).

Table 6 models. Hence, there is a pressing need (or awareness) of studying

Main issues discussed over the years by co-citation analysis. risk management issues from industrial practice, whereas there is
a missing gap and potential in developing quantitative models to
T1 (1995–1999) T2 (2000–2004) T3 (2005–2009)
make hard decisions in managing the risk.
Performance Innovation Management Regarding the possible modeling techniques and approaches in
Successes Industry Systems this research area, we propose the following potential methods in
Power Logistics Model developing quantitative models for risk management:
Entry EDI Performance
Strategies Model Networks
Robust planning: This planning approach aims at exploring the
Order Management Information uncertainty inherent in a supply chain, and developing optimiza-
Quantity discount Information Product tion decisions which provide more predictable results. For
Inventory Organizations Integration instance at strategic decision level, how to design a supply chain
Management Interface Design
so that key performance indicators have stable outcomes for
Coordination Perceptions Products
different production scenarios. At operational level, we should
investigate which control policy needs less modification with a
changing production environment. Also it is of interest to
Major risk issues and risk mitigation techniques have been investigate the institutional aspects of supply chain, namely, with
investigated based on material, cash and information flows. The updated conditions and institutional constraints, how the pre-
summary is presented in Tables 3–5, which further indicates vious supply chain decisions can be modified. This involves not
some research gaps. Most literature still focuses on material flow only the robustness of a decision, but also the (re)computational
issues in risk management, in particular with supplier selection. efficiency of the optimization algorithms. One advantage of this
Some efforts have been made to integrate material and cash flows approach is due to its proactive planning capability.
by adapting financial option theory. According to our literature Revenue management: As we have mentioned in this paper,
survey, there is a lacking of models in analyzing the risk most supply chain risk study focus on supply side. But with
associated with information flows, possibly due to missing of a supply disruption, we can still use different pricing policies
appropriate modeling techniques in this area. to redistribute customer’s demand for different products so as
The study also indicates a larger number of publications in to mitigate the supply risk. Such a policy was used by Dell
business journals. In addition, the existing literature includes when they faced a chips supply problem in Taiwan. In this case,
mainly descriptive and conceptual models rather than quantitative revenue management can be used to develop pricing policy and
 O. Tang, S. Nurmaya Musa / Int. J. Production Economics 133 (2011) 25–34 33

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