Developing a Supply Chain Risk Management methodology using the Scenario Planning Approach

Since the start of the current century the world at large has experienced uncertainty as a result of climate changes, epidemics, terrorist threats and increasing amount of economic upheaval. These uncertainties create risks for the proper functioning of supply chains. The implications for any organization faced with potential risks such as fire, theft, flood and terrorist attacks are huge. Recently, the toy industry has faced issues with sourcing from China and the recent outbreaks of Foot and Mouth disease in the UK have again affected the food sector. Most companies recognise the importance of risk assessment and management programs but invest little time and money into proactively managing the risks. The main concern is that if a risk never materialises it is difficult to justify to the stakeholders, the time and resources spent on developing contingency plans. There is a need to develop a system that can then enable a company to consider various risk scenarios to determine whether a reactive or proactive strategy is required. This research will consider the food sector as a case study for developing this tool-kit. This research will use qualitative research to investigate factors affecting selection of risk management strategies. The scenario planning methodology will be used to construct risk scenarios relevant for the distribution chain of the collaborating company and the food sector supply chain in general. A methodology will be developed to identify the appropriate risk management strategy for the respective scenario. This knowledge will then be converted into a tool-kit which can be used by companies in the food sector.