Management of Risk in Supply Chains: SCOR Approach and Analytic Network Process

AbstractToday's uncertain business environment requires supply chain managers to assess the degree of risk across the whole gamut of activities in a supply chain and develop suitable strategies to mitigate them. The purpose of this paper is to select the best alternative to diminish risk in supply chains. Integrating the analytic network process (ANP) approach and supply chain operations reference model (SCOR), this study models supply chain risks. As an illustration, the new approach has been applied to a medium-sized enterprise supply chain. The proposed model will aid supply chain managers to consider simultaneously different types of risks, their interdependence, and the feedback used to select the best alternative to manage risk in supply chains. Application of SCOR in the development of an ANP-based framework for risk mitigation in supply chains enables us to account for indirect relationships and the complex interactions existing among the supply chain risk variables.