Managing Risks of Supply-Chain Disruptions: Dual ... - CiteSeerX

principles. McGrath and MacMillan (2000) define the “discovery-driven planning”, whichallows to “adapt the course of action as the real opportunities becomes clear”.1.2 How to manage supply-chain disruptions: Chosen ApproachOur uncertainty here is supply-chain disruptions. By adapting the general framework to thisparticular issue, we obtain:1 Disruption risks exist and managers must not ignore them. It is necessary to introduce a culture ofrisk awareness within the organization in order to face this problem.2. The strategic issue is to determine which actions to undertake in order to manage disruptionrisks. This is an important question, since disruptions may damage strongly the supply process andfirms may loose business. Protecting the supply-chain against such events may even become astrategic advantage toward the competitors. For instance, in case several firms suffer from the samedisruption, companies that are prepared will recover faster from hardship and may take marketshares from their competitors.According to Courtney’s framework, firms face here a level 2 of uncertainty - managers can'identify a set of distinct possible outcomes': normal and disruption situations.3. Managers must undertake a general review of all the possible solutions to manage riskdisruptions. The purpose of chapter 2 is precisely to give a list of these measures. It is based on aliterature review and suggests very general approaches. Practically, firms need to specify thesesolutions and adapt them to their own environment. Chapter 3 focuses on dual sourcing that is apossible strategy to protect against supply risks.4. Once managers have identified possible solutions, they must analyze each of them precisely inorder to choose the best actions and define a global strategy to manage risk disruptions. They needto rely on tools and models that are adapted to the uncertainty they are facing. In particular, it maybe helpful to quantify the value of the different solutions, as managers like to think in term of costsvs. benefits. This thesis shows that real options are perfectly adapted to value flexible strategiesunder uncertainties. Chapter 4 introduces the concept of real options. Chapters 5 and 6 present howto use this approach by applying it to the example of dual sourcing.14