Managing risks in next generation supply chains: a systems approach

Supply chain risk management follows three basic processes to manage supply chain risks: Identify, Assess and Mitigate. This paper considers a systems perspective towards managing these risks. It presents variables that may affect Next Generation Supply Chains and applies a System dynamics modelling approach (Oehmen, et. al. 2009) towards depicting the causal linkages of these variables with future supply disruptions. To understand the interdependencies within these factors and the risk propagation on account of these factors it was decided to adopt a systems perspective. This perspective is based upon application of a causal loop diagram which considers the interdependencies between the factors affecting next-generation supply chains. The causal linkages between the variables are then highlighted with regards to the supply chain process and the nodes, and the causes of future risks are identified.