Critiquing Collaboration-Based Flexible Tools of Supply Chain Risk Management

In the event of supplier failure, an alternative supplier within the network can assume production. Multiple suppliers are therefore advantageous from a risk management perspective (Christopher, 2002). However, such a strategy limits the possibility of reaping the gains of focussed factories. Collaboration with few suppliers seems feasible, and compatible with trends toward single-sourcing, but would multiple supplier collaboration escalate complication?

As SCs grow increasingly global, information availability and lead times become significant SC vulnerabilities. Christopher and Peck (2004) found that upstream and downstream visibility, a prerequisite of the SC model, is often poor. Sourcing decisions made on unit cost – regardless of the risks incurred by distance, lead times, and transaction hazards – can prove deleterious

The reasons why companies fail to achieve competitive advantage through SCM have received sparse discussion, and empirical support for SCM’s concepts is lacking (Davenport, 1998; Fawcett and Magnan, 2002).