Difference between revisions of "Talk:Black swans and supply chain strategic necessity"

From Adaptive Cycle
Jump to: navigation, search
Line 7: Line 7:
'''Publication:''' August 22, 2011 Journal of Transport Security, Forthcoming
'''Publication:''' August 22, 2011 Journal of Transport Security, Forthcoming

Revision as of 08:23, 19 November 2012

Review of Karim Camara -- Karim Camara (talk) 07:21, 19 November 2012 (PST)

Title: Black swans and supply chain strategic necessity

Authors: Raj Aggarwal & Jerry Bohinc

Publication: August 22, 2011 Journal of Transport Security, Forthcoming


This article describes in general terms what globalization where supply chain is very important means for especially intercontinental operating organizations, the risks that this entails. Furthermore, the author has attempted in this article to give a few suggestions on how organizations should change their strategies to limit these risks (black swan). Nowadays terrorist attacks takes place in almost every continent. These attacks cause both material damage as human damage. Because globalization has a high priority in the current trade, the trade is not only limited to national borders but rises far outside its own geographical boundaries. With a possible disruption of the supply chain this not only effects one company but there could be many companies involved which can cause the damage to take another turn very fast. It clearly shows that especially international companies should not only focus on the prevention of vulnerabilities within their own geographical boundaries but that good cooperation with all stakeholders is needed to ensure a total guarantee. The strategy that is applied when they only have to deal with companies in their own geographical area does not apply when they also have to deal with companies in other countries. The world is no longer as stable as it was before. Companies must adjust their strategy when they are cooperating with companies in other countries, taking into account many vulnerabilities cannot be left out of consideration in our current society. This, at first side far located vulnerabilities, can all of a sudden cause a lot of damage within the own company because of the complexity in which companies nowadays cooperate. According to this article companies do well to evaluate the risks that may arise by Black Swan in advance and perhaps take this in to the total view of costs of a product/service which is offered by the company. These risks can indirectly bring costs for the company. The author has emphases that companies should bear this in mind.

Critical reflection on the review

The review on the article has been done well because the reviewer generally has discussed many important aspects of the article. What I do miss in this review is that there is no critical view to the substance of the major options for mitigating or deterring supply risk that has been given by the author. In my opinion several things can be said about some of these options. There is, for example, by the author advised to use the Develop contingency plan for disruption (but remember the tsunami effect) to reduce the risks which entails unforeseen changes. However the author of this article has given no clear suggestion about how this needs to be done. I think it would be better if the author had come across with, for example, a framework or something like a guideline about how this contingency plan should be realized. Generally, most companies have a contingency plan but whether this is suitable for all types of disasters that’s a second question. Furthermore, in my opinion I think that the reviewer overlooked one of the main pillars of an international operating company which applies intercontinental trade of application, this is namely the adaptability (flexibility). This is the aspect where the current trade is all about. A company must be able to adapt quickly to the changing environment. This is treated with Complex Adaptive systems (John H. Holland, 1995), and with Adaptive Cycle model (Abcouwer et al., 2012).