Supply chain disruptions : managing risks vs. managing crises

This thesis looks at two back-to-back disruptive supply chain events, one due to a sole-supplier's bankruptcy and the other caused by Hurricane Rita, that occurred at a specialty chemical company, and uses these examples to demonstrate how managing crises is more costly than managing risks. In examining the events surrounding the sole-supplier bankruptcy, managing a crisis cost this specialty chemical company 45% more money than managing a risk. Through the findings of these two disruptive events, a framework, the Eye of Providence, is created to manage supply chain risks. First, an organization must determine how developed its risk-management protocol is. Next, by studying past disruptive events and determining the key impact factors, an organization could calculate and learn about the opportunity cost of managing crisis. Then, by continuously evaluating its suppliers and rigorously applying those key impact factors to the analysis of its supply chain practice, an organization could evaluate and identify its current vulnerabilities.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2007

Authors dc:creator

• Lee, Garrett J. (Garrett James)
• Chang Zen-Lee M

Advisor dc:contributor.advisor

• Yossi Sheffi.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/40096

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/40096