This Paper has won First Prize in "Opsyrus 2005", the CoolAvenues.com - OIG (IIM Lucknow) Paper Writing Competition held in October 2005.

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Executive Summary

"Manufacturing offshore is bad business."

- Harvard Business Review, 1988

The world has come a long way from the times of Markides and Berg who wrote this article. With the cost reduction ideology being followed vigorously and infrastructure and telecom boom sweeping the developing countries, outsourcing is here to stay. With these global changes, supply chains are quickly proliferating globally and increasing in complexity and distances. In this scenario, the risks associated with the supply chains become magnified and become an important issue to tackle. Events like SARS and 9/11 have brought the high impact, low frequency risks also into focus.

The paper starts with a pointer to where we stand today in supply chain risk measurement. The various methods of measuring the supply chain performance have been then introduced. This is followed by a detailed classification of risk drivers and classical mitigation strategies. The SCOR Model application to risk measurement and control has been discussed in detail, with some inputs from the software industry also used. After that a new approach has been suggested, based on the existing applications of the Balanced Scorecard in supply chains.

The Emergence of Global Supply Chains¹

Globalization is a force to contend with in all spheres of business and the supply chain is naturally going to follow. The globalization trends are driven by the following four factors:

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1 Werner Delfmann and Sascha Albers, "Supply Chain Management in Global Context", www.uni-koeln.de/wiso-fak/planung, 2002.

* Contributed by -
Krishnakanth K. K. & Pankaj Ghai,
PGP Students.
IIM Lucknow.