Managing Supply Chain Risk - Role of It/Is

Measures aimed at making supply chains more efficient and responsive have also made them more vulnerable and exposed to disruptions. These measures include increased off-shoring and outsourcing of manufacturing and product development activities, contract manufacturing, global sourcing, lean operations with reduced inventories, centralised distribution and warehousing, reduction of supplier base and tightly integrated supply chains. In addition to this increased sensitivity of supply chains, a significant increase in the frequency and number of events leading to major disruptions, and their magnitude is forcing organizations to take supply chain risk more seriously. This paper discusses the concept of supply chain risk, supply chain risk management, its dimensions and the role of information technologies in general, and enterprise systems in particular. It will discuss the challenges faced by business organizations in leveraging existing and future information technologies and systems and their double-edged role. While industry reference models have the potential to internalise supply chain risk management processes, their ability in identification and mitigation of the supply chain risk is limited and depends upon other IT-dependent factors, such as information visibility, trust, security of intellectual property information, ability to collect snapshots of demand, inventory and capacity at key nodes in the supply chain, and the sense and respond capability of the organization to deal with material flow disruptions.