The buzz about Alexa

Sooner or later every blogger will come across the topic of Alexa ranking and if you’re blogging for money or want to attract advertisers, some of them do pay attention to a blog’s Alexa ranking. Sponsored Reviews does, among others. Most blog evaluation tools use the Alexa ranking one way or the other, like the Websitegrader, although personally I prefer something like Bartlett Interactive’s eValuator, which I find a lot more useful. As to Alexa ranking  I’ve been hovering close to 100K for several months, and maybe very soon I will be in the magic top 100K. But should I really care?

Alexa top 100K – how to

Would you not want to have an Alexa ranking like this? Or better, for that matter. Frankly, maybe it doesn’t really matter.

Well, it’s not all gold that glitters. Alexa is seriously flawed and I will show you why: Lets click the Audience tab: A whopping 87% of my Alexa traffic from Norway. That’s gotta be wrong… or?

It is wrong. It is only me. How?

In the course of my day I use 3-4 different PCs, all happen to have the Alexa toolbar installed, and I visit my site many times every day from each of them, to update my blog, to read and answer comments, to write new posts and find old posts I can link back to, or to re-read and re-edit older posts.

So basically, what counts, is a couple of Alexa users visiting your blog regularly. That’s all it takes. Alexa says so, too:

Alexa’s traffic rankings are based on the usage patterns of Alexa Toolbar users and data collected from other, diverse sources over a rolling 3 month period.

I’m not sure what the “diverse sources” are, but it can’t be worth noting, not really.

The ugly truth

In my “real stats” my own visits are excluded, and this is how my last 90 days look like:

A mere 1% of my traffic comes from Norway, while the US accounts for 27%. Nothing of this is reflected in my Alexa stats.

Can Alexa be trusted?

In my opinion, no. That said, Alexa does have a disclaimer, stating that

Sites with relatively low traffic will not be accurately ranked by Alexa. Alexa’s data comes from a large sample of several million Alexa Toolbar users and other traffic data sources; however, the size of the Web and concentration of users on the most popular sites make it difficult to accurately determine the ranking of sites with fewer than 1,000 monthly visitors. Generally, traffic rankings of 100,000 and above should be regarded as not reliable.

My monthly visitors are close to 7000, so that should be OK, but I’m so close to 100K that my ranking should be reliable, shouldn’t it? I don’t know. I’ve lost my faith in Alexa, now I know how easy it can be manipulated. Besides, I doubt that many of my readers are likely to use Alexa anyway, so as a metric for blog it is really worthless.

A better tool: Quantcast

If you’re serious about blogging, and want to attract serious and professional advertisers, I recommend using Quantcast. Both the stats and the demographics are way better than what you get at Alexa. And Quantcast counts ALL visitors, unlike Alexa.

I’m using both my GetClicky widgets and some Quantcast widgets on my Audience and Traffic page for everyone to see. I will not distort my traffic stats (because that is what Alexa does) to those who wish to advertise on husdal.com. That is why I have put advertising rates on my blog, and refer my potential advertisers to my true audience and traffic information, not some Alexa ranking that is not working well for my blog. My blog is my supply chain and I care about my supply chain. It’s all about supply chain visibility.

My proposal

It was in late 2008 that I received an email from the editor, Stavros Ponis, inviting me to submit a proposal for a book chapter for this book. At that time I had very little knowledge of virtual enterprise networks, but the more I read, the more I realized that supply chains (or supply networks) and virtual enterprise networks shared much common ground. At least the way I saw it, or rather “read” it, as my understanding of virtual enterprise networks came from these two books mainly: The Networked Enterprise by Ken Thompson and The Agile Virtual Enterprise by Ted Goranson. Armed with these two boks and a selection of supply chain risk articles I set out to propose a chapter for a theoretical framework on how to apply supply chain risk principles in a virtual enterprise network.

My chapter

Suprisingly, my chapter proposal was accepted, and now I spent some grueling months actually writing it, while learning even more more about supply chain risk, let alone virtual enterprise networks along the way. The peer review process after submission was quite interesting, too, as one reviewer said “publishable as is”, another said “needs revision” and a third said “not publishable at all”, the latter being a euphemism for “has no idea what he’s talking about”, as the review comments from this reviewer pointed to.  Anyway, in the end, my chapter met the editor’s requirements and my first major publication is out there for everybody to see. I’m published now, so hopefully, I will not perish, like so many others. Initially I had the intention of presenting a short summary of the chapter on risks in virtual enterprise networks as a conference paper at MITIP 2009, but other engagements tied me up, so it never was presented, until now, when it published.

My abstract

This is the abstract of my chapter, aptly titled “A Conceptual Framework for Risk and Vulnerability in Virtual Enterprise Networks”:

Is managing risks in Virtual Enterprise Networks different from managing risks in supply chains? It is not unusual for suppliers in a supply chain to come together and act as a Virtual Enterprise Network (VEN) and the supply chains of today’s globalized and outsourced business environment exhibit many VEN-like features. Looking at VEN risk management from the perspective of supply chain risk management, current ideas on VENs will serve as a base onto which ideas on supply chain risk will be transposed. Many concepts related to supply chain risk will be explored and related to their possible VEN counterparts: risk, vulnerability, robustness, flexibility, resilience and business continuity. Conceptual in its approach and drawing from other areas of research, this chapter introduces four distinct groups of VENS, namely Constrained, Directed, Limited and Free VEN, and concludes that VEN risk management can and should learn from supply chain risk management.

My appraisal

When looking at the publisher’s website, this is what the editor writes in the preface:

The first chapter of this section by Jan Husdal can very well serve as an introduction to the whole book since it attempts to bridge the gap between the concepts of Virtual Enterprise Networks and Supply Chains by building on literature findings drawn from both research areas. Jan Husdal, provides the reader with a novel perspective on VENs and in doing so a new VE taxonomy is introduced. After a fruitful discussion on risk management in both VEN and supply chains, Husdal turns to the ultimate objective of this chapter, which is to propose a conceptual framework for Risk Management in VENs with a Supply Chain Risk Management perspective and provide well argumented evidence that VEN risk management can and should learn from existing supply chain risk management initiatives.

I do feel a bit honored now, as I have the opening chapter of the book, and hopefully I will make readers want to read on after reading my introduction.

My fellow writers

Looking at the 13 other contributions, as described in the same preface, I can already now say that I look forward to reading the whole book:

• Brian Squire takes an exploratory look at the use of formal network measures to further understand the sources of risk in enterprises organized in networks.
• Burak Sari argues that trust is the shared belief that network partners can depend on each other to achieve a common goal and constitutes a critical structural and cultural characteristic that influences the network’s success and performance.
• Samir Dani proposes a risk management framework for Virtual Enterprise Networks based on innovation and the effective feed of its results back to the risk management process.
• Ettore Bolisani provides a knowledge-based view of Virtual Enterprise Networks and attempts an analysis and classification of the possible sources of risk associated to the management of knowledge in a Virtual Enterprise Network.
• Mohammad Shalan aims to provide a comprehensive in depth analysis of risks and issues associated with the IT aspects of Virtual Enterprise Networks from technical and procedural point of view and to prescribe specific guidelines to mitigate the effects of the identified and analyzed risks, processes and consequences.
• Ila Manuj presents a simulation model development process for modeling disruptions and other crises events in global virtual enterprise networks and supports her proposed methodology by providing the reader with an indicative modeling example.
• Klimov et al. present a framework of simulation-based supply chain risk analysis with a risk measurement system,  based on the evaluation of supply chain performance.
• Omera Khan and Alessandro Creazza highlight the importance of keeping product design at the centre of the entire business process and managing it concurrently within the supply chain, utilizing their suggested 4C approach.
• María Jesús Sáenz, Maria Pilar Lambán and Eva Navarro introduce a conceptual framework including a set of best practices which enable flexibility value to be created in the context of an inter-organizational network.
• Stavros Ponis and Epaminondas Koronis study the knowledge-related risks of outsourcing by identifying and taxonomizing the risk sources of the outsourcing initiative, and by pinpointing the related threats and proposing mitigating actions.
• Konstantinos Kirytopoulos, Dimitra Voulgaridou and Vrassidas Leopoulos  introduce a decision support framework based on the so-called ANP-BOCR model, focusing on the supplier selection process which is critical for clusters where its members not only cooperate but also compete.
• Nikolaos Panayiotou, Stylianos Oikonomitsios, Christina Athanasiadou and Sotiris Gayialis develop an elaborated toolset that supports the extended role of Internal Audit as a facilitator of change towards the network’s business objectives, thus assisting and improving business processes  and enhancing the quality of the enterprise network.
• Christos Manolarakis, Ioannis Christou and Gregory Yovanof attempt to capture market dynamics and provide Virtual Enterprise Network managers with a new insight on consumer segmentation by proposing an Agent Based Modeling tool that allows the description and simulation of the evolution or interactions of social structures.

Interesting? I think so, and in due time, I will post a full review on this blog.

My conclusion

I can only agree with the editor here, who says that

Hopefully, this book including more than a thousand scientific references will establish the necessary background for further research in the field, attract interest and create challenges for both researchers and practitioners, thus initiating a broad academic discourse.

That remains to be seen, but I will certainly do my part here.

Reference

Ponis, S. (ed) (2010). Managing Risk in Virtual Enterprise Networks: Implementing Supply Chain Principles. Hershey, PA: IGI

Editor link

• ntua.gr: Stavros Ponis

Publisher link

• igi-global.com: Managing Risk in Virtual Enterprise Networks

amazon.com

• amazon.com: Managing Risk in Virtual Enterprise Networks

Related

• husdal.com: On managing risks in Virtual Enterprise Networks
• husdal.com: Understanding risks in Virtual Enterprise Networks

Contents

The book contains nine chapters written by 20 leading academics. Some of them are known to me and already have publications  reviewed on this blog, others are new acquaintances and promising review subjects that I will take a closer look at in my future posts.

1 Risk and Security – A Logistics Service Industry Perspective by Christoph Bode and Stephan M. Wagner serves as an introductory chapter, discussing various aspects of risk management and security, but first and foremost it is aimed at establishing a nomenclature for supply chain risk management by describing and defining supply chain risk source, supply chain risk, supply chain disruption and supply chain vulnerability.

The same figure appears in Wagner, S., & Neshat, N. (2009) Assessing the vulnerability of supply chains using graph theory

2 Risk Management in Supply Chains under Uncertainty by Robert de Souza, Mark Goh, and Fanwen Meng is an innovative framework for supply chain risk management.

3 Risk and Security Management for Logistics Service Providers: Trends, Challenges, and Opportunities by Eleftherios Iakovou, Dimitrios Vlachos, and Anastasios Xanthopoulos presents an analytical methodological framework for the design and execution of efficient and resilient logistics processes in an adverse environment.

4 Understanding Context Risk in Southeast Asia: A Logistics Industry Perspective by Ruth Banomyong describes and compares the complex risk issues faced by the logistics service industry in the ASEAN countries.

5 Global Supply Chain Security for Logistics Service Providers by Zachary Williams, Robert Lorin Cook, and O. Keith Helferich explains how to deal with catastrophic incidents in supply chains, and discus what risk management tools are applicable to what kind of companies.

6 Security, Risk Management, and Crime Prevention in Supply Chains
by Daniel Ekwall
examines the relationship between security, risk management and crime prevention in supply chains.

Much of this article is based on Ekwall’s previous work on the difference between legal and illegal supply chains.

7 Business Risk in Container Shipping by Tsz Leung Yip and Y. H. Venus Lun discusses the impact of economies of scale and how the optimal size of business in the container shipping industry.

This is a topic I felt was missing when I was reviewing this article on security in maritime supply chains.

8 Applying Risk Assessment to Secure the Containerized Supply Chain by Maarten van de Voort, Henry H. Willis, David S. Ortiz, and Susan E. Martonosi weighs costs and benefits of security measures and show how to judge the efficiency and feasibility of such measures.

This framework is very similar to Peck’s 4-level supply chain in her integrated framework for drivers of supply chain vulnerability.

9 Technology-Enabled Risk Management along the Transport Logistics Chain by Alexander C. H. Skorna, Christoph Bode, and Stephan M. Wagner points out that a smart combination of positioning, sensor and communication technologies offers interesting capabilities to reduce theft and damages in transportation and warehousing.

Conclusion

Many papers (and books) on supply chain risk do not deal explicitly with supply chain security; at best it is one of many aspects of discussion. This books takes supply chain security a long step forward, as it provides a cross-section of current research and future issues that are bound to receive not less but more attention in an increasingly uncertain and perhaps insecure world. Supply chain security is not something that is added on to a supply chain, it ought to be something that is integrated into every supply chain.

Reference

Wagner, S. & Bode, C. (Eds.) (2009) Managing Risk and Security: The Safeguard of Long-Term Success for Logistics Service Providers. Bern: Haupt Verlag.

Author links

• ethz.ch: Prof. Dr. Stephan M. Wagner
• ethz.de: Dr. Christoph Bode

Publisher link

• haupt.ch: Managing Risk and Security

Related

• husdal.com: An empirical investigation into Supply Chain Vulnerability

If you can’t use your head, use your overhead

If you, like me, went to school in the late 1980s, you will probably still remember teachers using overhead projectors showing copies of textbook pages with no or little images and reading them verbatim rather than trying to explain things properly? I’m sure the three guys  behind this book do not fall into that category, and I know I’d love to be in their classroom. This book fully explains the concepts of transportation, spatial interaction, accessibility, location theory, graph theory and what not better than anything I have seen. Why? because it is so well and to-the-point illustrated. Hardly any concept related to transportation is  left out, and hardly any mentioned concept is not well illustrated with rich examples, i.e. self-explanatory figures.

Transportation and supply chains

Transportation networks are the main arteries of society, ensuring a 24/7 operation of  the community we live in. Transportation systems are also essential to supply chains. Without a proper transportation system supply chains cannot function properly. However,  the menial day-to-day operations related to transportation are often overlooked in supply chain management. This book goes a long way in bridging this gap, as it touches upon topics such as freight transport and locations of terminals. It also extends the term supply chain by introducing a new term: the commodity chain.

Transportation and GIS

If you have read my About Me page, you will probably realize that my fascination for this book stems from my background, as I hold a degree in Geographic Information Systems GIS), focussing on various applications of GIS in transportation (GIS-T). GIS-T only takes up a small part of the book, but it is an excellent chapter on GIS in transportation, as it is co-written by Shih-Lung Shaw, who also co-wrote a book wholly dedicated to GIS-T together with Harvey Miller, one of my professors from the University of Utah.

Companion website

The book comes with a companion website that shows you the main contents of the book. This is where you can see first-hand how brilliantly it is illustrated.  If that doesn’t convince you to buy the book, I really don’t know what would.

Reference

Rodrigue, J.P., Comtois, C. & Slack, B. (2009) . The Geography of Transport Systems , 2nd edition. New York: Routledge

Author links

• hofstra.edu: Jean-Paul Rodrigue
• umontreal.ca: Claude Comtois
• concordia.ca: Brian Slack

amazon.com

• Buy the book: The Geography of Transport Systems

Related

• husdal.com: GIS for Transportation
• husdal.com: Corridor analysis
• husdal.com: How to make a straight line square

Disaster preparedness and recovery

The two recent earthquakes, first in Haiti, and then in Chile have made me think about supply chains and disasters. Most recently I reflected on public-private partnerships in disaster response and recovery and how resilience is a prerequisite for surviving disasters. My interest really started last year with the earthquake in Padang, Indonesia, where I highlighted that military and civilian supply chains must work side by side.

No bedrock

Because disasters and crisis situations are so hands-on and demand immediate action they are perhaps neglected by academia, and thus left to the professionals to sort it out. Or maybe not: This paper attempts to rectify this lack of theoretical foundation by developing a novel theoretical framework to support future research in supply chain disaster and crisis situations.

Four theories – one pyramid

The framework seeks to unite four theories by constructing a pyramid with 3 planes or sections; with each section representing a perspective linking three of the four theories:

The three bases are made up of relationship management theories (collaboration), communications theory (communication) and competing values theory (contingency). The pyramid is topped by resource management as the capstone. If Lee can come up the Triple-A supply chain, maybe this can be the Triple-C?

Collaboration

Because there are always multiple players in supply chain disaster and crisis situations, collaboration will be the glue that holds organizations together, particular if one considers the tangled web of the extended supply chain. This web is likely to provide ample research opportunities.

Communication

Supply chain disaster and crisis situations demand effective communication. Examining issues such as bi-directionality, formality, modality, and frequency will be of serious importance and provide fertile grounds for research as private and public entities attempt to understand what, when, how and how much to communicate.

Contingency

Contingency theory is based on the premise that things change, and no supply chain disaster will be like the other. One of the strongest supporting theories that could ground the contingency element is competing values theory, by suggesting that one can simultaneously pursue various different and conflicting strategic goals, regardless of the situation.

Resource management

Resources play a vital role in supply chain partnerships and it will be important to investigate how they are employed, how they are impacted and how they interact with other resources, particularly in disaster and crisis situations. That includes human resources, physical and technological resources, informational resources and financial resources.

Three research planes

The authors suggest three research areas, built on the three planes of the pyramids, i.e. the interconnections between the theories.

1 – the independents
resources – competing values – communication
How do firms re(act) as disconnected and disinformed individual organizations?

2 – the proactive partnership
resources – communication – relationship management
How can firms develop communication and collaboration?

3 – the co-opetition resource
resources – competing values – collaboration
How do firms grow their situational awareness balancing when to compete and when to collaborate?

Conclusion

Initially, I was a bit dissatisfied with the article as I was hoping for a practically relevant article, that developed a new framework based on disaster and crisis experience. However, this is a purely theoretically framework, but it is a framework that is well founded, based on the literature review. It will be interesting to see how many researchers pick up on this article and develop the suggested research strands. You can count me in…perhaps.

Reference

Richey, R.G. (2009). The supply chain crisis and disaster pyramid: A theoretical framework for understanding preparedness and recovery International Journal of Physical Distribution & Logistics Management, 39 (7), 619-628 DOI: 10.1108/09600030910996288

Author link

• ua.edu: R Glenn Richey Jr

Related

• husdal.com: Public-private partnerships in disaster management
• husdal.com: Military and civilian supply chain collaboration

Flexibility

Why contingency in supply chains? Isn’t flexibility enough? While flexibility is often associated with simply being responsive or adaptive to customer preferences or quick to change to new markets, it also carries with it

the ability to encounter, resolve and exploit an unexpected emergency or opportunity

Flexibility thus becomes a strategic capability. This capability can be enhanced through contingency planning, but not all attributes of the contingency planning process contribute equally to the overall supply chain flexibility.

Contingency planning

Supply chain flexibility is what makes it possible to respond to an unpredicted and unexpected disruptive event in a successful manner. Since it is impossible to predict the exact nature and extent of disruptive events, the response must be generic and open-ended, in other words “flexible” or “contingent”. Contingency planning is thus a key strategic tool to achieve flexibility, as LaLonde writes in his 2005 essay on “Fiddling while Rome burns“:

Contingency planning is a special type of planning that provides a blueprint for responding to the risks associated with an unknown event. The contingency plan document should detail a timely and complete response to a specific risk or a cluster of risks. The specific processes embedded in the plan would depend on the nature of the risk. For example, the risk assessment for a retail operation would likely differ from that of a manufacturer or a transportation company. In general, the process part of the plan should include the following elements: risk assessment, risk evaluation and management, first response, collaborative management, subsequent stages of response, security, operations, stability, and performance evaluation.

While the “fiddling” obviously eludes to the alleged story that the Roman Emperor Nero was playing the fiddle while his capital city burned in AD64, there is a pun to it, as in fiddle = alter, adjust, or change in minor ways without any meaning, essentially: not doing what you were supposed to do, namely responding properly to the burning of the city. Here, a proper contingency plan will help eliminate the fiddling. Contingency planning is a risk management tool.

Hypotheses

The authors identify 10 contributing factors in the contingency planning process and test for whether these factors are positively related to flexibility:

Top management support. Without continuous commitment, support, patience and leadership from management, not much will develop in the lower ranks.

Goal alignment. The strategic goals must be aligned through strategy documents, corporate values, rules, procedures and resource allocation.

Resource alignment. Inter- and intra-organizational resources, if coordinated and aligned can increase flexibility.

Level of IT usage. Information Technology can assist an organization’s ability to generate, combine, capture, process and analyze various streams of information that vital to its survival.

Level of Information sharing. A successful planning process requires the willingness to make strategic and tactical data available across the supply chain.

System connectivity. Following Information technology and information sharing is the ability to connect and integrate different systems, facilitating seamless data exchange.

Comprehensiveness. This is only possible to achieve through an extensive evaluation of objectives and alternatives, risks and benefits at all levels of decision-making, throughout the organization.

Standardization. This entails the establishment of common policies and procedures, thus providing consistency in the way situations are handled.

Intra-organizational and inter-organizational collaboration. True collaboration will result in joint knowledge creation, sharing of expertise and understanding each others intention and strategic approaches to different situations.

Result

The result is – to my mind – perhaps a bit disappointing. Only these four factors in the contingency planning process are positively related to flexibility, according to the regression analysis of the survey performed by the authors:

1. Top management support
2. Resource alignment
3. Level of IT usage
4. Inter-organizational collaboration

Interesting. I would have expected more or all variables to be of importance in contingency planning for flexibility. At least, I would have thought so, judging from a seemingly complete review of supply chain flexibility literature in Babu and More (2008), and even more so from the discussion of the enablers of risk mitigation in Faisal et al. (2006)

Conclusion

It took me some reading to fully comprehend the message of the article. It is not supply chain flexibility that is center stage here. It is the contingency planning process…applied in a supply chain setting, aimed at generating flexibility from within. And is not the contingency plan that makes a supply chain flexible, it’s the contingency planning process that is important. As Dwight D. Eisenhower is supposed to have said

The plan is nothing, planning is everything.

If you have learned how to steer (through the planning process), you will be able to steer and navigate even in treacherous waters, applying flexibility where it is needed.

Reference

Skipper, J., & Hanna, J. (2009). Minimizing supply chain disruption risk through enhanced flexibility International Journal of Physical Distribution & Logistics Management, 39 (5), 404-427 DOI: 10.1108/09600030910973742

Author links

• afit.edu: Joseph B Skipper
• auburn.edu: Joe B Hanna

Downloads

• scmr.com: Fiddling while Rome burns

Related

• husdal.com: Risk disablers
• husdal.com: Supply chain flexibility – literature review

Classification framework

The classification framework of these authors differs considerably from that of Rao and Goldsby that I reviewed most recently. The source of a crisis is either internal or external. The scale of a crisis may affect a single company only, the whole or part of a supply chain, or may have wider and regional impacts. The stage of a crisis refers to the level of crisis management, akin to the definition used by FEMA: mitigation, preparation, response and recovery. The research methodology used in the literature is sometimes analytical, empirical, conceptual or applied. Finally, the respondents are divided into for-profit and not-for-profit (e.g. government) organizations, assuming that either organization puts a different value on crisis management.

• Source
  • Internal
  • External
• Scale
  • Company
  • Supply chain
  • Region
• Stage
  • Mitigation
  • Preparation
  • Response
  • Recovery
• Research method
  • Analytical
  • Empirical
  • Conceptual
  • Applied
• Respondent
  • For-profit
  • Not-for-profit

I find this a simple, yet comprehensive framework that fully captures and links supply chains and crisis management.

Insights

What are some of the insights and implications from the review?

• There is more research on external sources than internal sources
  • More needs to be done on internal sources
• There appears to be more research on the two proactive levels than the reactive levels
  • How to recover needs to receive more attention
• There is limited empirical research on how supply chain managers plan to handle crises
  • There is a need to develop scales for the right level of crisis management
• There is a clear lack of literature on not-for-profit supply chains
  • More research is needed for not-for-profit organizations
• Most of the research looks at crises from the perspective of a single member, while missing the wider picture
  • How does a supply chain crisis affect an entire region?
• Many of the models and solutions are developed for a specific crisis (or/and a specific company or industry)
  • What is needed is the development of more generic management tools

These are just some of the insights the authors wish to highlight. There’s a lot more in the article itself.

Critique

This is one of best reviews of papers on supply chain risk that I have seen until today. Kudos for an excellent job more than well done! That said, again, one of my favorite articles on how to prepare a supply chain for a crisis, The Severity of Supply Chain Disruptions: Design Characteristics and Mitigation Capabilities, has dipped below the radar horizon of the reviewers. Moreover, they also lamented the lack of papers on the wider picture, another one missed:  Reconciling supply chain vulnerability, risk and supply chain management. On the other hand, I have missed many of their articles. The biggest value of this paper, however,  lies in the appendix, where all 188 articles are neatly listed and classified, allowing researchers like me to find the exact factor I am interested in.

Reference

Natarajarathinam, M., Capar, I., & Narayanan, A. (2009). Managing supply chains in times of crisis: a review of literature and insights International Journal of Physical Distribution & Logistics Management, 39 (7), 535-573 DOI: 10.1108/09600030910996251

Author links

• tamu.edu: Arunachalam Narayanan
• tamu.edu: Ismail Capar
• tamu.edu: Malini Natarajarathinam

Related

• husdal.com: Supply Chain Risk literature review (Rao and Golsdby)
• husdal.com: A full literature review of Supply Chain Risk Management (Sørensen)
• husdal.com: Supply Chain Risk – a complete literature review? (Vanany et al.)

Interpretive structural modeling

Interpretive structural modelling (ISM) can be used for identifying and summarizing relationships among specific variables, also called “enablers”. ISM provides a means by which order and relationships can be imposed on such variables, thus categorizing the enablers according to their driving power and dependence.

Enablers of risk mitigation

Based on a solid literature review the authors come up with 11 enablers:

• Information sharing
  • More information means more visibility means less surprises
• Supply chain agility
  • Agility allows for faster adapting to changing circumstances without losing momentum
• Trust among supply chain partners
  • Lack of trust creates opportunism only
• Collaborative relationships among supply chain partners
  • Collaboration creates interdepence and the appreciation of flexibility and responsiveness
• Information security
  • Information is the most critical asset in the chain, so guard it
• Corporate social responsibility
  • Be prepared to manage the consequences of partners’ (wrong) policies
• Aligning of incentives and revenue sharing policies
  • Everybody’s interest must be served, not just one’s own
• Strategic risk planning
  • The supply chain is a strategic asset, not just an operational necessity
• Risk sharing
  • Both risks and rewards need to be distributed evenly throughout he chain
• Knowledge about risks in the supply chain
  • Risk understanding improves decision-making
• Continuous risk analysis and assessment
  • Business environments are dynamic, so are the risks

I cannot think of anything else, can you?

Dependant versus driver matrix

Similar to the later article on information risks management, the authors end up with a matrix showing the interrelations among the enablers, based on their dependency and driving power.

The enablers are further classified as

(1) Autonomous enablers (Southwest quadrant)
(2) Dependent enablers (Southeast quadrant)
(3) Linkage enablers (Northeast quadrant)
(4) Independent enablers (Northwest quadrant)

Autonomous enablers have a weak driver power and weak dependence. These enablers are relatively disconnected from the system. Linkage variables work both ways; they affect the enablers above and are at the same time dependent on the enablers below. Independent variables have a strong driver power and weak dependence. Dependent enablers are dependent on the other variables.

Conclusion

Interestingly, in this paper, the dependent enablers with the least driving force are seen as key enablers, while in the paper on information risks, the independent enablers are seen as the strongest contributors towards risk mitigation. Confusing at first, perhaps, but it depends on your point of view. Most important however, is that the interpreted structural modelling methodology, as the name implies, only provides the framework for interpretation of supply chain risk mitigation. It does not provide the answer.

Reference

Faisal, M., Banwet, D., & Shankar, R. (2006). Supply chain risk mitigation: modeling the enablers. Business Process Management Journal, 12 (4), 535-552 DOI: 10.1108/14637150610678113

Author links

• qu.edu: Mohd Nishat Faisal
• dmsiitd.org: D.K. Banwet
• dmsiitd.org: Ravi Shankar

Related

• husdal.com: Information risks management
• husdal.com: Supply Chain Confidence
• husdal.com: Corporate vulnerability

Interdependence

The social and economic networks that exist in any community will ultimately influence the ability of this community to adapt to and respond to the consequences of disasters.  This includes both private and public entities. The key issue is to recognize and embrace the public-private interfaces that can improve the ability of a community to manage the response and recovery phases of disaster management.

Conceptualized as a dependent variable, community resilience is influenced by the relationships government (public) agencies develop with private sector partners and the resilience of relevant supply chains and critical infrastructures/key resources which exist in their communities.

Why is this important? Because much of the critical infrastructure  necessary for a disaster response is in private, not in public hands. This will of course depend on which country that is struck by a disaster, but in much of Europe and particularly in the US, it is true.

Propositions

The authors set up a list of propositions

• Stronger public-private partnerships will positively influence the capability of participating critical infrastructure and key resource operators to manage disaster consequences.
• Stronger public-private partnerships will positively influence the capability of participating supply chain operators to manage disaster consequences.
• Improvements in the resilience of critical infrastructures and key resources will positively improve supply chain resilience.
• Improvements in the resilience of supply chains will positively improve  the resilience of critical infrastructures and key resources.
• Through improved access to resources, supply chain resilience will positively influence the capability of communities to manage the consequences of disasters.
• Through improved access to resources, the resilience of critical infrastructures and key resources will positively influence the capability of communities to manage the consequences of disasters.

and underpin each proposition with a wealth of examples and a selection of relevant literature.

Managerial implications

The authors also evaluate how resilience can and should be developed.

1. Resilience needs to take center stage:

Failure to recognize the role of resilience could compound post-disaster consequences by relying on managers and public policy officials who who are not capable of adapting the most well-intended plans into strategies which are appropriate for the given situation.

2. Don’t forget the mortality rate of businesses following a disaster:

At each level of government, measures must be taken to influence the preparedness of businesses.

3. Identify important supply chains and critical infrastructures and key resources:

Starting at the lowest level, it is important to understand the position and relative importance of the assets of a community, both on a local, regional and  national level.

4. Establish appropriate relationships with specific business/industries:

First, understand how specific businesses and government agencies work, then develop working relationships in order to discuss the remedies that can contribute to improving resilience.

The essence: In order to achieve community resilience, public and private owners of critical infrastructures and key resources must work together, before, during and after a disaster.

Critique

This is one of the better articles on resilience that I have seen in the long time, but there is one shortcoming, in my opinion. While the authors describe and discuss various aspects of the concept of resilience,  I find it surprising that they missed the New Zealand research project Resilient Organisations, that deals in particular with community resilience. Instead they appear to have a penchant for Sheffi’s concepts of resilience, which, by the way, are brilliant, so there’s nothing wrong with that. Moreover, they do cite a wide range of literature, many of which hitherto unbeknown to me, so I do have a lot of reading ahead of me, and that alone makes this article worth reading.

NIMSAT

NIMSAT is a research center established under the auspices of the University of Louisiana at Lafayette and that was conceived based on the experiences of the Institute’s researchers during the devastations of hurricanes Katrina and Rita in 2005. The mission of NIMSAT is to enhance national resiliency to a full range of potential disasters by conducting research leading to innovative tools and applications that empower the homeland security and emergency management community through education, training, outreach and operational support.

Reference

Stewart, G., Kolluru, R., & Smith, M. (2009). Leveraging public-private partnerships to improve community resilience in times of disaster. International Journal of Physical Distribution & Logistics Management, 39 (5), 343-364 DOI: 10.1108/09600030910973724

Author links

• louisiana.edu: Geoffrey T Stewart
• louisiana.edu: Ramesh Kolluru
• nimsat.org: Mark Smith

Links

• nimsat.org: NIMSAT
• resorgs.org.nz: Resilient Organisations

Related

• husdal.com: Disasters- Prepare or react?
• husdal.com: Economic Resilience

Terje Aven

I have said it time and again, and followers of this blog will know that I am a qualitative, not a quantitative researcher, and I have always looked at risk and vulnerability from a qualitative perspective, which is why I like Kaplan’s definition of risk better than any other. That is why I have never paid much attention to Terje Aven, a professor from the University of Stavanger, Norway, who I first met some 15 years ago and who I have always regarded as a quantitative researcher. He is a frequent author and co-author of articles in the Reliability Engineering and System Safety, a journal I only look into now and then, and there’s hardly an issue without Aven in it. His most recent contribution, Identification of safety and security critical systems and activities, has made me question my discarding of the quantitative risk and vulnerability perspective.

Risk – traditionally defined

Traditonally, risk is defined as a function of probability and consequences, where the the probability of and event occurring is linked to the expected consequences if the event occurs (as predicted). This way of thinking only considers a certain set of events; it does not consider the full spectre of possible outcomes. This means that the actual consequences may be very different from the calculated expected consequences.

Hence by focusing on the expected consequences given a failure mode, a strong element of arbitrariness in the classification scheme is introduced. This arbitrariness is due to the variation in possible outcomes integrated into the expected value, as well as the difficulty of assigning probabilities producing accurate predictions.

Another approach might be to replace expected consequence with expected loss:

Expected loss = E[C], given by p E [C|A], where C are the consequences of an event A with a probability of p.

This makes comparing different events easier, since one only needs to compare one number. The lesser the expected loss, the better? Not necessarily, since the preferences of the decision-maker are not accounted for. That is why a expected disutility approach should be used:

Expected disutility = Eu(C), where u is a utility function reflecting the preferences of the decision maker.

This too is troublesome, since there still is some arbitrariness as to defining the disutility function, which will have to be the same for all events/consequences, something that may not hold true for the decision-maker. Thus, in order to find which systems that are critical, neither expected loss nor expected disutility may be good approaches.

Risk – alternatively defined

Aven sees risk as composed of:

• Initiating events or triggers (A)
• Consequences of these events (C)
• The values (attributes) at stake
• Uncertainties and likelihoods about occurence of the events and the consequences

Conversely, he sees vulnerability as composed of:

• Consequences of the initiating events
• The values (attributes) at stake
• Uncertainties and likelihoods about occurence of the consequences, given the initiating events

See the differences? Risk looks primarily at the triggering event, vulnerability looks primarily at the resulting consequences.

High uncertainty = high risk

In order to account for uncertainties, Aven suggests the following method

Identify a list of systems for evaluation.

Identify possible initiating events A.

Define categories of consequences C (severity classification).

Rank thesystems according to vulnerability using E[C|A], i.e. the expected consequences given the occurrence of A.
Assign probabilities for the events A, calculate the unconditional expected consequences, EC,
by EC = P(A) x E[C|A], and rank the systems according to EC.

Assess uncertainties in underlying phenomena and processes that could result in surprises relative to EC, and adjust the ranking based on this assessment.

Steps 4 and 5 are based on a traditional risk description. It is only when the uncertainties are added that “true” risk is revealed, e.g. an event with a presumed low risk based on EC, may be reclassified as high risk if the uncertainties regarding the underlying assumptions are high. Uncertainties may be related to e.g. new technology, future events, customer demand or political stability.

Conclusion

I think Aven is on the right track here. As he puts it himself,

…the idea that safety and security critical systems can be identified by considering [...] the expected consequences given given system failures and malfunctions [...] cannot be justified…

It is necessary to use a risk-informed approach, he claims, where calculated probabilities and expected values are enriched with the uncertainties of the underlying phenomena and processes.

Surprises may occur and by just addressing probabilities and and expected values, such surprises may be overlooked.

Surprises will of course occur, as Nassim Taleb notes in his book on Black Swan Events, and also described by Bazerman and Watkins in their book on Predictable Surprises: The Disasters You Should Have Seen Coming. However, taking possible surprises into account already from the beginning will allow for a much broader, richer and more comprehensive approach to risk management.

Reference

AVEN, T. (2009). Identification of safety and security critical systems and activities Reliability Engineering & System Safety, 94 (2), 404-411 DOI: 10.1016/j.ress.2008.04.001

Author link

• uis.no: Terje Aven

Related

• husdal.com: Vulnerability and Criticality Assessment
• husdal.com: Black Swan Events