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Ericsson's proactive supply chain risk management approach after a serious sub‐supplier accident

Andreas Norrman (Department of Industrial Management and Logistics, Lund University, Lund, Sweden)
Ulf Jansson (Ericsson AB, Sweden, Core Unit Supply, Stockholm, Sweden)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Article publication date: 1 June 2004

Abstract

Supply chain risk management (SCRM) is of growing importance, as the vulnerability of supply chains increases. The main thrust of this article is to describe how Ericsson, after a fire at a sub‐supplier, with a huge impact on Ericsson, has implemented a new organization, and new processes and tools for SCRM. The approach described tries to analyze, assess and manage risk sources along the supply chain, partly by working close with suppliers but also by placing formal requirements on them. This explorative study also indicates that insurance companies might be a driving force for improved SCRM, as they now start to understand the vulnerability of modern supply chains. The article concludes with a discussion of risk related to traditional logistics concepts (time, cost, quality, agility and leanness) by arguing that supply chain risks should also be put into the trade‐off analysis when evaluating new logistics solutions – not with the purpose to minimize risks, however, but to find the efficient level of risk and prevention.

Keywords

Citation

Norrman, A. and Jansson, U. (2004), "Ericsson's proactive supply chain risk management approach after a serious sub‐supplier accident", International Journal of Physical Distribution & Logistics Management, Vol. 34 No. 5, pp. 434-456. https://doi.org/10.1108/09600030410545463

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited