Introduction
Supply Chain Risk Management
In recent years, the industry was severely affected by violent incidents, health
crises, and natural disasters. These incidents have a huge impact on economic
activity, for example, Ericsson lost 400 million EUR after their suppliers of
semiconductor plant caught fire in 2000, and Apple has lost order of DRAM in
Taiwan in 1999 after an earthquake [8]. British petroleum has lost more than 1.5
billion USD after the Texas City Refinery explosion in 2005 that was considered as
the worst industrial disasters in recent US history. Another example, the impact of
Japanese earthquake and tsunami (Japan 2011) on industrial production is
estimated at (-17%) between the prediction of the Japanese ministry of economy
trade and industry and the achievement, the breaking of production chains is
considered as the main channel of transmission of the disaster on the Japanese
economy. The consequences of these accidents are uncertainly, for this reason, the
risks management in the industries has emerged as an essential topic in the global
logistic chain, indeed, the risk is absolutely linked with the uncertainty [27, 28].
Risk is defined as possible events whose unfavorable consequences are difficult to
accept or are even unacceptable [24]. Nowadays, the risk assessment is an
important research theme because the risks were always present in the industrial
activity [30]. In the literature, we find several studies on risk management, these
studies focuses only in downstream risks or upstream risks or production risks.
This distinction does not a meaning when we talk about logistic chain and logistic
risk. Moreover, this distinction does not consider the interaction can be exist
between all the risks at the level of the links of the logistic chain, in this context it
is preferable to use the concept of Supply Chain Risks Management (SCRM) and
not risks management.
The risk
The thematic of risk management is not new, but it is recent and not very studied in
logistic chain (or supply chain), the first work that explicitly addresses for the risk
management in the supply chain dating from 2003 [27]. The risk is present in many
activities including the logistic in which one consequence of the risk that it is
increasing and affect around all the logistic networks, therefore the managers need
to make a great deal of effort to identify and manage risks. The meaning of risk can
be differ from one person to another depending on their point of views, attitudes
and experience what makes the study of risk more and more complex.
Aven [34], proposed a basic risk theory based on brief selected review that over the
last 15-20 years and he presented the evolution of risk concept in Oxford English
Dictionary since 1679, we think that definition followed the environment
evolution. Veland and Ave [14], proposed the same based classification of risk
given by Aven [34] and they used theses definition to discuss how the risk
perspectives influence the risk communication between the decision-makers, the
risk analysts, experts and lay people. Indeed, for Karimiazari et al [3], engineers,
designers and contactors view risk from the technological perspective, lenders and
developers tend to view it from the economic and financial side. So, the question
is: what is a risk? The first answer, the risk is the probability that an event or action
may adversely affect the organization [37]. For Mazouni [25], the risk is an
intrinsic property of any decision, it is measured by a combination of several
Standard Occupational Health and Safety Assessment Series), the risk is a
combination of the likelihood of an occurrence of a hazardous event or exposures
to danger and the severity that may be caused by the event or exposure. In this
context (BS OHSAS 18001), the concept of risk asks two oriented question: 1.
What is the probability that a particular hazardous event or exposure will actually
occur in the future? 2. How severe would the impact on health and safety be if the
hazardous event or exposure actually occurred? The risk can be defined as an
uncertain event or set of circumstance which, should it occur, will have an effect on
achievement of one or more objectives [10]. For Marhavilas et al [29], the risk has
been considered as the chance that someone or something that is valuated will be
adversely affected by the hazard, where the hazard is any unsafe condition or
potential source of an undesirable event with potential for harm or damage. For
Bakr et al [5], the word “risk” means that uncertainty can be expressed through
probability. We can concluded that the risk is an probabilistic event that can exist
and affect the activity of an organization positively (opportunity) or negatively
The risks management in the supply chain
The concept of risk management in the supply chain has developed rapidly over the
recent decades and has become very important, we can consider, if we refer on
Lavaster et al [26], that the paper of Jutter et al in 2005 “Supply Chain Risk
Management: outlining an agenda for future research” was the first scientific
researcher in the Supply Chain Risk Management (SCRM), furthermore and
according to Fekete [2], risk management is an area with conflicting terms, and
there is a widely acknowledged need for a critical reflection of its definition, core
contents, principles and regulation. According to Lavaster et al [26], the first
definition of SCRM was given by Juttner 2005, “the SCRM is the identification
and management of risk for the supply chain, through a co-ordinate approach
amongst supply chain members, to reduce supply chain vulnerability as a whole”.
The SCRM plays a major role in successfully managing business processes in a
proactive manner.
Supply chain risk management is defined as the process of risk mitigation achieved
through collaboration, co-ordination and application of risk management tools
among the partners, to ensure continuity coupled with long term profitability of the
supply chain. The SCRM can be defined as a structured and synergic process
throughout the supply chain, which seeks to optimize the totality of strategies,
processes, human resources, technology and knowledge in the aims are to control,
monitor and evaluate supply chain risk and to safeguard continuity and maximize
profitability [15].
Risk management is the process whereby decisions are made to accept a known or
assessed risk or the implementation of action to reduce the consequences or the
probability of occurrence of an adverse event [35]. Risk management refers to
strategies, methods and supporting tools to identify and control risk to an
acceptable level [31].
In accordance with ISO 31000:2009 (Risk management: principles and guidelines),
risk management refers to a coordinated set of activities and methods that is used to
direct an organization and to control the many risk that can affect its ability to
achieve objectives.
Based on the literature review of SCRM, we can give this definition, the SCRM is
a cooperative process between contributors (partners) in the supply chain in order
to put the risks under control and to cope with their negative consequences. The
risk management in the organization allows to assure that the decision-maker
knows and understand the risks and prepare the necessary plan that can prevent
disasters or reduce their impact. The risk management process is executed in four
steps