Sustainable Risk Management in Value Chains

Introduction

Background

Risk management in value chains, often termed supply chain risk management has been one of the fastest growing research streams within operations and supply chain management in recent years. Today’s turbulent environment makes this topic no less important. The global COVID-19 pandemic, the rush to reopen the economy from lockdown, Brexit, the blockage in the Suez Canal, the war in Ukraine and the increased focus on environmental sustainability have exposed many issues in value chains related to risk and uncertainties, potentially leading to a lack of resilience. Challenges relate to coping with complexity and uncertainty. For example, globalization means that today’s value chains often cross not only organizational boundaries, but also national borders, including many tiers and long lead times. These challenges highlight the need for collaborative and sustainable strategies, not to mention techniques and tools to understand, identify, visualize, quantify and reduce risk in value chains.

Objective and expectations

The objective of the course is to provide students with insights into the challenges and ways of dealing with sustainable risk management in value chains. This includes competence in applying frameworks for identifying, assessing, mitigating, and responding to value chain risks in a variety of different contexts, and appreciation of sustainability perspectives and challenges, including the sustainable development goals (SDG), environmental, social and governance (ESG) and circular economy issues related to managing risk.

The course combines theory, practical examples, and interactional learning, and students are expected to actively participate through work requirements (a-synchronized homework assignments), and discussions in class (synchronized assignments in class).

Course content

This course is structured in five modules or themes, which will be discussed separately in class. The course will also cover relationships between them. The course will cover the following modules:

• Module 1: Value chains
• Module 2: Risk management
• Module 3: Sustainability
• Module 4: Decision support tools (tools that help bridging these different modules)
• Module 5: Sustainable risk management in value chains (combining all modules)

Subjects discussed within each module include:

Module 1: Value Chains

1. What is a value chain?
2. Managing value by bridging supply and demand – value chain management
3. Lean vs. agile supply chains

Module 2: Risk Management

Overall framework - Identifying, assessing, mitigating, and responding to risks.

1. Risks and uncertainties in the chain – abnormal and normal risks
2. Risk mitigation strategies – designing the chain
3. Collaboration across organizational/sectorial boundaries

Module 3: Sustainability

1. Introduction to the SDG and ESG frameworks and a discussion about the impact of these frameworks on strategy, decision-making, and value chain risk management
2. Introduction to the circular economy and circular business models and their relationships with sustainability
3. Challenges with circular economy

Module 4: Decision support tools

Causal loop diagramming: visualizing relationships in systems and discovering feedback structures in systems (like value chains)

Module 5: Sustainable Risk Management in Value Chains 

1. Sustainable risk management in value chains and ISO 31000: resilience engineering; recording and reporting; assessment, identification and treatment
2. Application of decision support tools in sustainable risk management in value chains: practical case study / company project combining all course elements