“Supply Chain Disruption and its effect on Firm Performance in 3PL Organisations”

Niall Hanley - C12440412

DT 358

Supervisor: Fiachra Coll

Acknowledgements

I | P a g e

I would like to thank my Mum and Dad for their ongoing support throughout my

college career. To my supervisor Fiachra Coll, I thank you for your excellent

guidance throughout this process and helping me question my work to create the best

outcome possible.

I would like to thank the participant in the interview for giving me their time. The

information was crucial to my overall paper. I really appreciate the welcoming and

open attitude that took place in this interview as it was my first attempt in that

method of data collection.

I would like to thanks Sorcha Lehane, Anna-Maria Leavy and Paul Saunders, for

arranging my interviews and being excellent mentors throughout my work

placement.

I would like to thank Margaret Farrell, Claudia Wagner and Conor Horan for

looking after us and guiding us in the right direction.

Finally, the most important acknowledgment of all to Eoghan Culligan for the

hilarious memories throughout our time together in college that I will forever

cherish. I can confidently say I would not be in the position I am today without your

help. We have all missed you dearly this year and I am sure your looking over us all.

Rest easy brother, love Niall.

II | P a g e

Table of Contents

Table of Figures.....................................................................................................................VI

Table of Tables.....................................................................................................................VII

Declaration...........................................................................................................................VIII

Abstract...................................................................................................................................1

Chapter One: Introduction.......................................................................................................2

1.1 Background and Overview............................................................................................3

1.1.1 Supply Chain..........................................................................................................3

1.1.2 Third Party Logistics Providers..............................................................................3

1.2 Research Aim................................................................................................................4

1.3 Rationale for the study..................................................................................................4

Chapter Two: Literature Review.............................................................................................5

2.1 Introduction...................................................................................................................6

2.1.1 Trends in Supply Chains........................................................................................7

2.1.2 Supply Chain Disruption........................................................................................9

2.2 Third Party Logistics Providers (3PL).........................................................................11

2.2.0 Introduction..........................................................................................................11

2.2.1 4PL.......................................................................................................................11

2.2.2 Competitive Advantages of Outsourcing Third Party Logistics Providers...........12

2.2.3 Challenges for Third Party Logistics Providers....................................................12

2.3 Identifying Risk Vulnerability in Supply Chains.........................................................15

2.3.0 Frameworks for Identifying Risk & Vulnerability in Supply Chains....................15

2.3.1 Framework 1: Christopher’s Risk Profile Model..................................................15

2.3.2 Framework 2: Internal vs external Analysis.........................................................19

2.3.3 Framework 3: Likelihood vs severity and the Risk Priority Matrix......................20

2.3.4 Elements of Supply Chain Network Design and Evaluation that Influence supply chain risk.......................................................................................................................20

2.3.5 Comparison of Frameworks.................................................................................21

2.4 Tools and Techniques for Identifying and Managing Supply Chain Disruption..........23

2.4.1 Supply Chain Modelling and Simulation from a risk management perspective....23

2.4.2 Cause and Effect Analysis....................................................................................23

2.4.3 Failure Mode and Effect Analysis........................................................................24

2.5 Managing Supply Chain Disruption............................................................................25

III | P a g e

2.5.0 Frameworks to Manage Supply Chain Risk and Disruption in 3PL`s...................25

2.5.1 Framework 1: Typical Risk Management Process................................................25

2.5.2 Framework 2: Supply Chain Risk Management Process......................................25

2.5.3 Framework 3: Five Factors for Managing Supply Chain Disruption....................27

2.4.4 Comparison of Frameworks.................................................................................29

2.5 Chapter Conclusion.....................................................................................................30

Chapter Three: Industry Contextualisation............................................................................31

3.0 Chapter Introduction...................................................................................................32

3.1 Industry Profile of Ireland...........................................................................................32

3.2 Key Player in 3PL market in Ireland...........................................................................32

3.3 SWOT Analysis of Irish Transport Industry................................................................34

3.4 Challenges in European Market..................................................................................34

3.5 Third-Party Logistics (3PL) Usage..............................................................................35

3.6 PESTLE Analysis of European Logistics and Transport Industry...............................35

3.5 Cases of Internal and External Disruption in Transport & Logistics Sector................38

3.6 Case Study of Organisation Being Researched............................................................39

Chapter Four: Methodology..................................................................................................41

4.0 Methodology Introduction...........................................................................................42

4.1 Research Objectives....................................................................................................42

4.2 Research Onion...........................................................................................................43

4.3 Research Philosophy...............................................................................................43

4.4 Research Approach..................................................................................................45

4.5 Research Choices Characteristics............................................................................46

4.5.3 Mixed Methods....................................................................................................46

4.6 Research Strategy....................................................................................................47

4.7 Time Horizon..........................................................................................................47

4.8 Conclusion..............................................................................................................48

Chapter Five: Findings and Analysis.....................................................................................49

5.1 Chapter Introduction...................................................................................................50

5.2.1 Objective 1: Assess the Use of Methods and Frameworks for Managing Risk in 3PL`s.............................................................................................................................50

5.2.2 Objective 2: Identifying What Tools and Techniques are Used to Identify and Manage Risk in 3PL`s...................................................................................................52

5.2.3 Objective 3: Assess the Impact of Risk on 3PL`s in terms of Frequency and Severity.........................................................................................................................54

IV | P a g e

Chapter Six: Conclusions & Recommendations....................................................................57

6.1 Conclusions.................................................................................................................58

6.2 Limitations to Research...............................................................................................58

6.3 Recommendations.......................................................................................................59

6.4 Recommendations for Further research.......................................................................59

Appendix A...........................................................................................................................61

Appendix B...........................................................................................................................62

Bibliography..........................................................................................................................66

V | P a g e

Table of Figures

Figure 1: Typical Supply Chain Network Flow (Source: Celikbelik, Erenay & Suer, 2015). .3Figure 2: Sources of Supply Chain Risk (Source: (Cranfield University: School of Management, 2003)..............................................................................................................10Figure 3: Internal and External Risk Analysis (Source: Manners-Bell (2014, p. 6) adapted from Mason-Jones & Towill, 1998)......................................................................................19(Figure 4: Key Players in Irish 3PL Logistics & Transport IndustrySource: adapted from (Irish Logistics & Transport Awards, 2016, 2015)................................................................33Figure 5: Research Onion (Source: Saunders, Lewis & Thornhill, 2012, p. 128)..................43

VI | P a g e

Table of Tables

Table 1: Supply Chain Internal and External Characteristics (Sources: Adapted from Manners-Bell, 2014, p. 7)......................................................................................................22Table 2: Cause and Effect Analysis (Adapted from: (Christopher, Logistics & Supply Chain Mangement, 2011) Cause and Effect analysis, p. 203...........................................................24Table 3: SWOT Analysis of Irish Logistics & Freight Transport Industry (Source: Expert Group on Future Skills Needs, 2015)....................................................................................34Table 4: Summary of Objective 1 Frameworks.....................................................................52Table 5: Summary of Objective 2 Tool and Techniques.......................................................54Table 6: Summary of Objective 3 Frameworks.....................................................................56

VII | P a g e

DeclarationThe project shall have a page containing the following declaration, signed by the

candidate bound into the project immediately following after the title page: -

I hereby certify that this material, which I now submit for assessment as the final

year project on the programme of study leading to the award of B. Sc. in Logistics

and Supply Chain Management, is entirely my own work, except where fully and

properly referenced. In addition, the soft copy version, submitted through safe

assign, is an exact replica of the hard copy submitted. Finally, this project has not

been submitted in whole or in part for assessment for any academic purpose other

than in partial fulfilment for that stated above.

Signed ........................................... Date ..................................................

(Candidate)

VIII | P a g e

Abstract

The purpose of this paper is to raise awareness of the topic of supply chain risk and

disruption. The paper highlights the frameworks and methods that third-party

logistics providers and their customers are exposed to. Furthermore, identifying

mitigation practices to prevent or lessen the negative effects of supply chain

disruptions which can be anticipated. The main objective is to maintain customer

service levels and brand image through events of disruption.

1 | P a g e

Chapter One: Introduction

2 | P a g e

3 | P a g e

1.1 Background and Overview

1.1.1 Supply Chain

A supply chain is defined by the suppliers, carriers, plants, warehouses, and flows of

products from each product`s origin to the final customer. The success of a supply

chain as a strategic weapon is determined by the optimal flow of products between

the number and location of these facilities within the network (Watson, Lewis,

Cacioppi, & Jayaraman, 2012)

Figure 1: Typical Supply Chain Network Flow (Source: Celikbelik, Erenay & Suer, 2015)

Supply chain disruption is becoming an increasingly influential element of focus for

major industries and their supply chain strategies, as global firms are required to be

significantly more aware of the controllable risks exposures to be adaptable to the

unforeseeable adversities of the future. In 2013, PwC and the MIT Forum for Supply

Chain Innovation conducted a survey examining two hundred and nine globally

operating companies with a key focus on their supply chain operations and risk

management approaches. The study established findings that sixty per cent of

companies pay little attention to risk reduction processes that could prevent supply

chain disruption. Furthermore, sixty four per cent of companies endure declines in

customer service levels and fifty four percent encounters negative sales revenues as a

result of disruption (Do You Know Where Your Supply Chain Is?, 2015).

4 | P a g e

1.1.2 Third Party Logistics Providers

The aim of this paper is to incorporate supply chain disruption management with the

function of third party logistics (3PL) providers to enhance service quality for

logistics providers and its customers.

Third-party logistics can be viewed as the management of outsourced logistics,

transportation and distribution activities. The term 3PL is commonly used to brand

this type of service on behalf of an external provider whose purpose is to manage

outsourced activities for the shipper (customer) in order to support their business

processes (Rushton, Walker, & Chartered Institute of Logistics and Transport UK,

International Logistics and Supply Chain Outsourcing: From Local to Global, 2007).

1.2 Research Aim

This paper aims to explore the impact of supply chain disruptions from the

perspective of 3PL`s firms and how they affect their performance to provide service.

1.3 Rationale for the study

In the initiating stages of the researcher’s topic the researcher evaluated the depth of

research that had been established by academic authors. That analysis consisted of

academic sources such as google scholar, emerald insight, business source complete

and IEEE xplore digital library to which the researcher discovered very limited

literature specific to third-party logistics (3PL) providers supply chain risk and

disruption management. Information has been extracted from multiple authors who

mentioned 3PL`s topics as part of a broader subject. This was surprising to the

researcher as the researcher had worked with a 3PL firm the year previous to

undertaking this dissertation where risk was a constant underlying factor throughout

each stage of the working environment.

5 | P a g e

Chapter Two: Literature Review

6 | P a g e

2.1 Introduction

A traditional perspective of supply chains can be expressed as the network of

entities, which may consist of suppliers, carriers, manufacturing sites, distribution

centres, retailers and customers through which material flows (Lummus & Alber,

1997). Whereas, a more dynamic outlook adapted by Christopher (2011) describes

modern supply chains as networks of interdependent organisations that are connected

and co-operate together to manage, control and improve the flow of materials and

information from supplier to end user. A supply chains network of partners

collectively source and convert basic commodities in an upstream movement which

can be built into a finished products which flow downstream to end-customers that

value them. Each of these partners plays a role in the form of a process that

transforms inputs such as materials or information into outputs which may include

goods or services (Harrison, Hoek & Skipworth, 2014, pp. 8)

The above statement depicts the connection of a multi-organisational chain that is

capable of flowing in a circular or symmetrical motion at a continuous rate.

However, this is not the case as a supply chain structure should really be viewed as a

supply network or web that is complex in integration, elongated in connection and

problematic in management. Supply chain networks are a complex web of

interconnected `nodes` and `links`. The network consists of two elements which are

“nodes” and “links”. The nodes are the entities or facilities such as suppliers,

distributors, factories and warehouses. The links are the methods by which the nodes

are connected, often symbolised as physical flows, information flows or financial

flows. The vulnerability of the supply chain network is determined by the risk of

failure of these nodes and links. The more extensive the network is the higher the

increase of exposure to risk and the possibility of disruption (Christopher, Logistics

& Supply Chain Mangement, 2011).

The crucial element of the above statements is “network”. Supply chains have

evolved immensely as a result of the trend in firms establishing business

relationships in global markets.

Supply chain disruption occurs when a firm does not have appropriate procedures in

place when something does not go to plan. The possibility of internal vulnerability

within an organisation can be overlooked and ignored by firms as they trust in the

7 | P a g e

systems that are in place. Thus, when external risks come into effect the systems fail

as they have no risk management procedures to prevent disruption. These internal

disruptions according to Waters (2011, p.100) can stem from risks in operations such

as unreliable equipment, information technology system malfunction, human errors

and quality issues. However, managerial decisions if not carefully evaluated in the

context of batch sizes, safety stock levels, financial problems and delivery schedules

can cause negative effects and disruption in the ability to provide service. Firms must

plan and implement strategies that accurately evaluate their operations and

partnerships to identify the internal vulnerabilities in their supply chain. Thus,

resulting in a more resilient firm, that has the capacity to continue providing

sufficient service for its customers.

2.1.1 Trends in Supply Chains

Just-in-Time (JIT)

“Having the right items of the right quality and quantity in the right place and at the

right time” (Cheng & Podolsky, 1996).

Just-in-Time is a manufacturing philosophy developed in early 1970`s by Toyota in

Japan. The philosophy was designed to create a sustainable competitive advantage by

delivering stellar performance of goods and services, through optimisation of cost,

service and quality. JIT enables a firm to achieve a reduction in raw material, work-

in-progress, waste and finished goods inventory (Cheng & Podolsky, 1996). The

philosophy is evidently low cost versus flexibility, with the focus on driving profits.

However, in the event of even a miniscule disruption the philosophy then becomes a

trade-off between low costs with unmanaged risk versus higher cost with managed

risk (Chakravarty, 2013)

Outsourcing

“From local to global” (Rushton, Walker, & Chartered Institute of Logistics and

Transport UK, International Logistics and Supply Chain Outsourcing: From Local to

Global, 2007)

In recent years business has seen rise to the radical change in the scope of business

and firm’s entry into the global markets, the phrase “globalisation” has been coined

to describe this change (Globalisation, 2003). Companies outsource business

8 | P a g e

processes such as distribution, manufacturing, accounting and information systems to

an external provider (Christopher, 2011, p. 191-192). The motive behind outsourcing

to global markets varies between organisational objectives. For example, it is

financially viable to outsource manufacturing to a third party supplier in a low cost

labour structured economy such as China. This results in the free up of assets and

reduces costs as compared to operations in a developed economy (Harland, Knight,

Lamming, & Walker, 2005). If the organisational focus is on quality of services

however, outsourcing logistics processes to third-party logistics (3PL) providers that

are more experienced, better equipped and more effective to fulfil transportation,

distribution and storage tasks. The decision to outsource would be more beneficial

depending on available resources, than compared to an inexperienced firm fulfilling

it themselves (Selviaridis & Spring, 2007).

Global Sourcing

Global sourcing is an essential business strategy for firms of the 21st century which

enables them to maintain sustainable competitiveness and net margins. Global

sourcing is the method of procuring goods or services from global suppliers often

resulting in long-distance supply chains, multiple interactions and extended lead

times (Waters & Rinsler, 2010, pp. 364-367). The primary role global sourcing

contributes to a firm is low price of materials and low cost labour, which is essential

when price is an important factor for customers and shareholders (Wisner, Tan &

Leong, 2015, pp. 64).

Supply Based Reduction

There has been an increasing trend in reducing the number of suppliers that an

organisation procures, for instance third-party logistics services or the suppliers of

raw materials and components. In some cases, organisations revert to single sourcing

strategies which entails one supplier to manage the entire responsibility of a process

or item. This trend is important in relation to this paper and several cases of single

sourcing has shown damaging results to firm performance and customer satisfaction

when a supply chain disruption incurs. The trade-off between the benefits of supply

base reduction and its increased risk of disruption must carefully be examined and

compared to understand if supplier base reduction is the correct strategy in the long

term (Christopher, 2011, p. 193).

9 | P a g e

2.1.2 Supply Chain Disruption

The more complex a supply chain and its network are increases the risk of its

exposure to disruption. Disruption can occur from internal factors which are

understood to be more predictable and carry less of a severity risk. Vakharia &

Yenipazarli (2009) illustrate internal disruptions that “can be defined as any

occurrence which has negative consequences for regular SC operations and hence,

cause some degree of `confusion/disorder` within the SC”. External factors which

effect disruption are interpreted as being relatively unpredictable and can majorly

effect firms operations. Skipper & Hanna (2009) argue “given the complexity of

many supply chains, experiencing a disruption is recognized by many organisations

as being inevitable. In reality, it is not a matter of a supply chain system encountering

a problem, but rather a matter of when a problematic event will occur and the

severity of the event”. Wisner, Tan & Leong (2015) has identified that global

manufacturers and retailers are taking initiative in redesigning and reengineering

their supply chains due to the cataclysmic effects of recent natural disasters such as

Typhoon Halong in South East Asia and severe flooding in Long Island, New York

which were two of the major supply chain disruptions in 2014 according to

(Chartered Institute of Procurement & Supply, 2015).

The explosions at the chemical warehouse in Tianjin, China on 12 August, 2015 was

a recent catastrophe causing a death toll of one hundred and seventy three lives.

Investigation found that Ruihai Logistics, a Chinese company which handles

hazardous chemicals had been in breach and had stored much more hazardous

material than authorized (Guardian.com, 2015, p. 1). The aftermath of this tragedy

“caused extensive damage to factories, warehouses and other services in the port of

Tianjin, as well as closing all operations at the two of the port`s terminals. Transport

and utilities infrastructure was also damaged”. This resulted in complete halting of

port operations till mid-September, weeks of delays, effects on company share

prices, new regulations, heavier-fines for non-compliance, and stricter insurance

rulings. (CIPS, 2015, p. 1)

10 | P a g e

Figure 2: Sources of Supply Chain Risk (Source: (Cranfield University: School of Management,

2003)

In figure 2.1 above, it is illustrated that sources of risk stem from two factors internal

and external environments. In the centre is vulnerability which is determined by risk

and exposure. Supply chain vulnerability is the exposure of a supply chain to

disruption arising from the risks to operations within each organisation, to

interactions within the supply chain, and from the external environment (Walters,

2011 p. 101). The management of vulnerability and risk should begin internally.

3PL`s are required to have extensive understanding of their internal processes

enabling optimal flow of material, information, and finance. To safeguard against

disruption contingency and mitigation planning is essential, particularly safety

procedures and back up channel routes. Control is heavily reliant on real time

information which can be enabled through IT systems such as RFID and GPS.

Freight forwarders often outsource haulage contracts for delivery where control must

be sustained through compliance. External factors such as demand and supply are

managed by 3PL`s clients. However, the external environment is the 3PL`s

responsibility once goods are in transit and factors such as governments, regulations,

security, customs and ethics can come into play and must be managed appropriately.

11 | P a g e

2.2 Third Party Logistics Providers (3PL)

2.2.0 Introduction

Baluch (2010) describes third party logistics providers as a “company that manages

and executes logistics tasks (using its own assets and resources) on behalf of another

company”. The demand for third party logistics (3PL/TPL) providers and advanced

logistics services has increased significantly as a result of drivers such as

globalization, lead time reductions, customer orientation, and outsourcing (Hertz &

Alfredsson, 2003).

3PL contribute a significant role and competitive advantage within firms to achieve

effective logistics integration where inter and intrafirm activities are integrated to

improve customer satisfaction (Zacharia, Sanders, & Nix, 2011). Third-party

logistics providers are essential elements in providing service to firms who may not

have the resources or knowledge to implement a successful logistics function within

an organisation. Risk and uncertainty remains an issue regardless if logistics

functions are operated internally or outsourced to a third-party provider. Thus, risk

and uncertainty should equally be shared between a firm and its third party as these

risks and uncertainties still need to be managed. (Wang, Jie, & Abareshi, 2014).

2.2.1 4PL

“A fourth-party logistics service provider can be defined as an integrator that

assembles the resources, capabilities and technology of its own organisation and

other organisations to design, build and run comprehensive supply chain solutions”

(Rushton, International Logistics and Supply Chain Outsourcing: From Local to

Global, 2007)

The recent trend toward 4PL providers, also referred to as lead logistics providers

(LLP`s) as a source for effectively providing competencies of logistics knowledge

and experience, combined with information technology and the ability to form

successful supply chain relationships. The distinction between a 4PL and 3PL is that

3PL relationships are often contractual whereas 4PL relationships with customers are

viewed as joint ventures. The strategic role of a 4PL as a singular source of

accountability across both supply and demand chains, where it is possible to build

close relationships that can support cost cutting initiatives and develop flexibility

with the most competitive value adding providers at that time (Win, 2008).

12 | P a g e

2.2.2 Competitive Advantages of Outsourcing Third Party Logistics Providers

Third-party logistics providers enable organisations to avail of more time that can be

spent on core competencies as the secondary activities such as the logistics function

are outsourced to the 3PL. 3PL`s have the expertise in logistics function, although an

organisation may have sufficient resources available, a supply chain specialised

company may be able to perform the activities more effectively, hold a strong

position in the supply chain as well as obtain the expertise and economies of scale.

3PL`s can share the responsibility for global supply chains, by maintaining

customers stock appropriately and delivering the perfect order every time. When re-

engineering a distribution network a 3PL can be advantageous in quick network re-

engineering to meet global market demands and maintain competitive advantage.

3PL`s can minimise liability to capital expenditure by utilizing leasing terms on

warehouse facilities, vehicles and aircrafts (Vasiliauskas & Jakubauskas, 2007).

2.2.3 Challenges for Third Party Logistics Providers

Cheong (2003) highlights four key considerations when analysing the challenges

faced by 3PLs. Each of the elements including logistics configuration, relationship

management, material flow and information flow must be optimised and

continuously improved in order to reduce the threat of risk expsoure

Logistics Network Configuration

Logistics network configuration involves the strategy of network design to create a

supply chain that is most effective and cost efficient to meet the customer

requirements. The desired logistics network would concentrate on having an optimal

number of warehouses or distribution centres (DC`s). Furthermore, the location and

service areas of the warehouses and how goods are routed (i.e. direct shipping or

consolidation) must be strategically planned. Consideration for the type and amount

of inventory that needs to be stored at each location requires careful planning, for

example pharmaceutical products may require constant temperature control. Where,

if necessary the allocation of production plants to warehouses or DC`s. (Cheong,

2003)

13 | P a g e

Material Flow

The material flow is focused on the movement of products from the upstream supply

chain which is handled by 3PL`s and requires careful co-ordination. Constraints in

material flow include 3PL inbound transport schedules which should be co-ordinated

and synchronized with manufacturers production schedule. Outbound transportation

should be scheduled in accordance with downstream customer and retailers.

Information sharing is a key ingredient in successful co-ordination of transport and

warehousing at 3PL hubs and DC`s. With information sharing 3PL`s can schedule

transportation based on retailer inventory providing benefits similar to vendor

managed inventory (VMI) or continuous replenishment program (CRP).

Understanding true inventory levels can allow 3PL`s to consolidate container loads

to optimize costs/profits. (Cheong, 2003)

Information Flow

Information flow involves the flow of information throughout the supply chain and is

one of the most important elements of logistics management. Information flow and

material flow are coupled together to complement each other. Important information

regarding 3PL`s are order information, inventory data, product types, origin and

destination. Access to this information as well as collaborative forecasting will aid

3PL`s in planning transportation capacity, inventory levels and scheduling, but

essentially will provide the third-party logistics provider with visibility of the supply

chain. Enablers of information are systems such as transport management systems

(TMS) and warehouse management systems (WMS) for real time data for decision

making. (Cheong, 2003)

Relationship Management

Relationship management concerns the terms and conditions which allow the healthy

business relationship between 3PL provider and client to be a successful partnership.

The perfect conditions for a 3PL partnership would be a long term contract, therefore

the challenge for 3PL`s is to maintain a good relationship and deliver high

performance on a continuous basis. Performance measure such as metrics and KPI`s

are set to measure the service level provided and expectation versus reality is

14 | P a g e

evaluated to determine if the contract terms are met. In some cases this can be

challenging if penalties and incentives are unfair. (Cheong, 2003).

15 | P a g e

2.3 Identifying Risk Vulnerability in Supply Chains

Walters (2011) explains that vulnerability is how likely a supply chain is to be

affected by risk events. The vulnerability of supply chain networks has increased as a

result of longer and leaner supply lines between focused facilities within

consolidating networks (Rushton, Croucher, & Baker, The Handbook of Logistics

and Distribution Management, 2006). Supply chains are constantly being exposed by

various types of risks; these risks can be differentiated between internal and external

factors which range from customs interference, bottlenecks or system glitches to

extreme cases of terrorism and natural disasters.

2.3.0 Frameworks for Identifying Risk & Vulnerability in Supply Chains

2.3.1 Framework 1: Christopher’s Risk Profile Model

Christopher (2011) describes that a risk profile model classifies risk into five

categories consisting of supply, demand, process, control and environmental.

Supply

The first stage of the supply chain is supply, it is the origin of a business’s materials

and where the flow of goods is initiated. Its effectiveness is crucial in the overall

function of businesses. Supply risk can be considered as the most damaging to a

supply chain and the main source to supply chain disruption. Traditional global firms

would have one supplier typically in a foreign market to fulfil supply requirements

for the focal firm, with little evaluation, selection process or long term planning of

the capabilities and risks that are potentially exposing both the firm, the supplier, and

the firm’s partners i.e. 3PL`s. Therefore, agreements are established stating the

quantity and timelines, and it is assumed that nothing will go wrong. 3PL providers

inherit the risk associated with reaching global networks as there are often required

to transport, store and safely manage goods in transit. This trend toward globalisation

previously mentioned in chapter 2.1 of organisations collaborating with multiple

supplier networks can increase exposure to external risks including weather and

labour disputes. On the opposite spectrum, organisations with single suppliers

endangers both the organisations business and their 3PL partners business if that

supplier is compromised. The economic downturn in 2007, collapsed global markets

and consumers financial status. This downward spike in buying behaviour may have

16 | P a g e

damaged the sustainable financial integrity of suppliers and in some cases closing

shop, where all of a sudden supply is no longer available and disruption ensues

(Wisner, Tan & Leong, 2015, p. 15)

Demand

Mentzer (2008) defines demand risk which is the wide variety of outcomes

forthcoming as a result of adverse events in the outbound flows that are likely to

affect the customer’s willingness to place orders with the focal firm, or variance in

the volume and assortment desired by the customer. 3PL`s and their customer must

be able to identify and react to demand volatility by continuously collaborating to

forecast demand to meet end user needs. Understanding demand and forecasting can

then reduce pressures on suppliers, manufacturers and third party logistics providers

to meet demand requirements more adequately. A common demand risk referred to

as the “bullwhip” effect where there is an amplification of change in demand

upstream (Harrison, van Hoek, & Skipworth, 2014); due to poor communication and

co-ordination the demand information becomes distorted. As this distorted demand

information passes through each of the supply chain members, this results in heavy

manufacturing costs and the need for holding excess inventory produced (Lee,

Padmanabhan, & Whang, 1997). Poorly forecasted demand can result into poor

delivery performance for 3PL providers as unanticipated demand then needs to be

managed by 3PL`s. Ability to deliver is then determined by the resources available to

3PL`s, where lacking resources can result in longer transportation lead times and

storage issues in warehouse and distribution centres.

Process

“The probability of disruption risk is very low as compared to operational risks”

(Garg, 2012). Process risk can be viewed as disturbances in production and

management activities within an organisation and are often the most frequently

occurring of Christopher`s (2011) risks. Process risk exposures that need to be

addressed include transportation management, and communication and collaboration

between multiples departments and partners (Shu, Chen, Lai, Zhang, & Wang, 2014).

Firm’s objectives can be primarily cost driven which demands lean operations and

strategies. Organisations that operate with “tunnel vision” regarding cost efficiency

do not realize the implications of their decisions in respect to the added risk as a

17 | P a g e

result of those decisions. Lean manufacturing (Toyota Production System) and the

just-in-time (JIT) philosophy of manufacturing has a value stream focus and a

lacking flexibility focus. The intended purpose of this approach is to minimize waste

and reduce cost, by being dependant on having “the right items of the right quality

and quantity in the right place and at the right time”. However, in the case of the

Japanese tsunamis in 2011 which devastated the automotive industry and companies

such as Toyota and Honda who implemented JIT approaches were left devastated as

they had no safety stock and no supply of components (Cheng & Podolsky, 1996).

Similarly, JIT approaches in 3PL warehouses for instance can succumb to disruption

if inventory and the capacity of the warehouse is not managed appropriately. 3PL`s

processes can be disrupted often if system glitches occur due to unsophisticated IT

systems. As a result time delays and extended lead times will affect customer and

3PL firm performance. Equipment is a key element in process risk management as

such 3PL equipment such as vehicles, warehouses and IT enablers require ongoing

revaluation and testing, particularly vehicles as disruption of goods in transit will

reflect unreliable service from the perspective of organisations outsourcing service

(Wisner, Tan & Leong, 2015, p. 325-322). Supply chain safety is crucial to the

protection of goods.

Control

Control risk is described by Christopher (2011, p. 194) as the likelihood of

disturbances and distortions to be caused by an organisations internal control

systems. Specific control risk adhering to 3PL/4PL`s would be with freight

forwarding organisations. Freight forwarders consolidate large numbers of small

shipments that are optimized to create full truck or rail container loads to achieve the

most profitable transport rate. The control risk in this form of logistics and

transportation services is the lessened control once shipments are transferred to

smaller shippers. The shipper’s attitude would be transportation and scheduling

focused strategy rather than the security, quality assurance and corporate social

responsibility while handling products under the name of the responsible freight

forwarding organisation (Wisner, Tan & Leong, 2015, p. 328-329). Continuously

controlled temperature storage and transportation is a key control element for 3PL`s

as the quality control of certain products such as pharmaceutical goods is dependent

on temperature control (Kuehne and Nagel).

18 | P a g e

Environmental

The least predictable and in some cases the most damaging aspect of risk is the

external environment. Environmental issues can have some of the most catastrophic

effects on supply chain disruption as they are regularly be unpredictable and difficult

to mitigate until they occur. Environmental disasters can range from natural disasters

such as the tsunami in Japan that occurred in 2011 (March, 11th). The Tsunami

caused unprecedented damage seen in over 65 years after World War 2, furthermore,

industries have been adversely effected due to Japan`s major contribution in

manufacturing components which had to be shut down such as Toyota and Honda.

Manufacturing was evidently hit heavily, however 3PL`s ability to transport in Japan

was completely disabled (Tohomy, 2011).

Watanuki (2015) has described how weak regulatory frameworks have posed

challenges facing the transport and logistics services industry in client countries. For

example, Greece which has many administrative agencies that interact poorly with

each other has caused duplication of regulations, and resulting in overregulation. In

the case of East Africa, there is not enough regulatory oversight and low skilled

operators that are lacking in professionalism, quality and effectiveness cause the

smooth passage of goods to be compromised. Regulation can weaken a 3PL`s ability

to provide service by increasing lead times and creating complex requirements for

providers.

Inventory shrinkage has been an increasing threat to 3PL`s vehicle security.

According to Wagner (2009) “is the loss of products between the point of

manufacturing or purchase from suppliers and the point of sale”. The motives for a

truck theft are primarily for the value of the truck and its cargo. Second, is the cargo

carrying ability of a truck, particularly if it is specialized which can be utilized in

other criminal activities. Third is driver intellectual property and valuable documents

which include credit cards, mobile phones or electronics.

The realisation of finite natural resources drove the price fuel up worldwide which

caused increasing fuel prices for car drivers, lead to the blockading of fuel depots,

which created a shortage of diesel for delivery transport, which in turn produced a

19 | P a g e

general shortage of food in economies such as the UK as it could not be delivered to

shops. (Rushton, Croucher & Baker, 2006).

2.3.2 Framework 2: Internal vs external Analysis

Corporate risk can stem from many sources; risk can linger in internal production,

distribution processes, quality of management within an organisation and in some

cases the external environment. Internal risk consists of the exposure of risk internal

to the firm as well as external to the firm that are internal to the supply chain

network. Internal risk is relatively controllable by organisations. However, external

risk to the network is not expected and can impair control capabilities of an

organisation, although preparedness can be crucial in the mitigation process when

supply chain disruption occurs (Manners-Bell, 2014).

Figure 3: Internal and External Risk Analysis (Source: Manners-Bell (2014, p. 6) adapted from

Mason-Jones & Towill, 1998)

Wagner and Bode (2008) suggest creating a two tier risk classification system in

addressing internally driven and externally driven supply chain risks as the first tier.

The second tier then categorizes five risks consisting of (1) demand risks, (2) supply

risks, (3) infrastructure and operational risks, (4) regulatory and legal risks and (5)

catastrophic risks (Bode, Kemmerling, & Wagner, 2013).

Disruption can stem from multiple sources, the Cranfield Centre for Logistics and

Supply Chain Management (CLSCM) in the UK compiled a study in 2003 with the

findings of four levels of risk being identified. Level 1: process or value stream, level

20 | P a g e

2: assets and infrastructure dependencies, level 3: organisations’ and inter-

organisation networks and level 4: the environment (Rushton, Croucher & Baker,

2006, pp. 563)

2.3.3 Framework 3: Likelihood vs severity and the Risk Priority Matrix

The risk priority matrix or risk priority number (RPN) is a methodology used to

categorize and rank the risk of specific issues in the order of priority. Potentially

problematic scenarios can be identified using a failure mode and effect analysis

(FMEA) which is then prioritized for corrective action. The parameters of the RPN

are outlined as severity, occurrence and detection. Severity (S) represents the impact

of a failure which affects the system (supply chain) or consumer that uses the

component. Occurrence (O) refers to the probability of failure to occur. Detection

(D) is concerned with the ability to measure the visibility of a failure through

identified by controls or inspection. RPN is calculated by RPN = S x O x D where

the highest outcome represents the higher seriousness of risk as a priority (Cai, Li, &

Yang, 2011)

Figure 4: Risk Priority Matrix (Garg, Cases on Supply Chain and Distribution Management:

Issues and Principles: Issues and Principles, 2012)

2.3.4 Elements of Supply Chain Network Design and Evaluation that Influence

supply chain risk

Supply chain networks are a complex web of interconnected `nodes` and `links`. The

nodes are the entities or facilities such as suppliers, distributors, factories and

warehouses. The links are the methods by which the nodes are connected, often

symbolised as physical flows, information flows or financial flows. The vulnerability

of the supply chain network is determined by the risk of failure of these nodes and

links (Christopher, 2011).Supply chain networks have a complex structure, where

organisations can be cross linked and there are two-way exchanges between them. A

21 | P a g e

focal firm is at the centre of this network and its internal processes coordinate with

the other members of the network.

Many key supply chain activities such as global production, sourcing, distribution

and transport are essential elements of the services offered by third-party logistics

providers. Firms with efficient distribution functions, are directly linked to the

customer network of a supply chain, and are considered a critical internal service

operation for a firm which correlates to customer satisfaction (Abdinnour-Helm,

1999).

Supply chain networks create more complexity the more nodes and links that exist,

nodes can be interpreted as interconnected suppliers or customers and in conjunction

with the network can represent multi-national and multi-regional locations. Rao &

Young (1994) points out that network complexity applies to both the geographical

dispersion of firms trading partners and the magnitude of transactions with selected

trading partners which can increase volume leveraging effects. Furthermore, a firm

with a large number of trade partners, requiring supply and distribution functions

spread over multiple countries and continents will upsurge the management

difficulty. This is due to regions where transportation and telecommunication

infrastructure is less developed. Stock keeping units (SKU`s) and origin/destination

(OD) pair permutations can be examined to understand traffic dispersion within a

network.

2.3.5 Comparison of Frameworks

The frameworks described in this chapter each have their own unique perspective on

how risk and disruption can be understood. Christopher`s (2011) risk profile outlines

five categories of risk which includes demand, supply, process, control and

environment. This framework specifically categorizes risk in which an organisation

can use to analyse, improve and manage its supply chain network. The advantage of

this analysis is the increased visibility and identification of where and what effect

these risks can have on an organisations and its partners supply chain.

The internal and external analysis by Manners-Bell (2014, p. 7) defines supply chain

characteristics and expresses the internal and external possibility of that risk effecting

an organisations supply chain. Table 1 illustrates the high or low possibility of risks

22 | P a g e

occurring internally or externally which can then be analysed to create a risk strategy

against the possibility of those risk characteristics occurring.

Supply Chain

Characteristic

Internal Risk External Risk

High Warehouse Stock

LevelsHigh Low

Global Transportation Low High

Outsourcing Hauliers Low HighTable 1: Supply Chain Internal and External Characteristics (Sources: Adapted from Manners-

Bell, 2014, p. 7)

The likelihood versus severity analysis framework is an important method of

identifying risks, and perhaps the most beneficial in evaluating organisational risk.

When applied the risk priority matrix tool with this approach can formulate a clear

analysis of the most important risk exposures faced by an organisation. The tool

creates a matrix of risk based on high or low severity and high or low frequency. As

a result the risks with the highest severity will ranked highest and on the other

spectrum the most frequent risk with the lowest severity will rank lowest.

23 | P a g e

2.4 Tools and Techniques for Identifying and Managing Supply Chain

Disruption

2.4.1 Supply Chain Modelling and Simulation from a risk management

perspective

Supply Chain Organisations use statistical analysis to explain and make assumptions

concerning social phenomena (supply chain risk and disruption) using measured

variables. The concept is to estimate social characteristics, with an estimator,

computed form observed data. For instance, there is viable theoretical reason to

assume believe that adding up the values of an observed variable, x, on n number of

cases chosen from a population at random which is divided by n, will provide a

strong estimate of the central tendencies of that variable in that population, where the

statistical behaviour is well understood (Mooney, 1997, p.1).

Monte Carlo is a simulation tool which provides an alternative to analytical

mathematics for understanding a statistics sampling distribution and evaluating its

behaviour in random samples. The Monte Carlo simulation executes this using

empirically using random samples from known populations of simulated data to track

a statistic`s behaviour. The purpose of this tool is to simulate a “virtual world” which

resembles the real world in all relative respects (Mooney, 1997, p. 2-4). The Monte

Carlo simulation evaluates risk levels in the supply chain by quantifying the

disruption threat and impact at various locations in the supply chain and develops

risk profiles and the effect on customer service for each. The simulation run

generates random numbers that determine if a specific risk occurs (using an

exponential distribution for frequency calculated using the experts estimate for

interval time) and the duration of that risk occurrence (using the triangular

distribution provided) (Schmitt & Singh, 2009, p. 1238-1247).

2.4.2 Cause and Effect Analysis

Cause-and-effect diagram which is also known as “fish bone” diagram is a graphical

illustration which represents the root causes of quality problems, where significant

contributors to the main issue are grouped and separated into detailed sources.

(Ahmed, Kayis , & Amornsawadatana, 2007).

24 | P a g e

Q1 Why was this shipment delayed?

A1 There was no stock available.

Q2 Why was there no stock available?

A2 We failed to achieve the production plan.

Q3 Why did we fail to achieve the plan?

A3 There was a shortage of components.

Q4 Why was there a shortage?

A4 There is a bottleneck in in-bound inspection

Q5 Why is there a bottleneck?

A5 We only have limited testing facilities.Table 2: Cause and Effect Analysis (Adapted from: Christopher, 2011, p. 203)

2.4.3 Failure Mode and Effect Analysis

Failure mode and effect analysis (FMEA) is a tool that is used to identify risk which

can provide a systematic approach to identify where attention is required in order to

mitigate the risk of failure. The tools ask three questions, what could go wrong?

What effect would this failure have? What are the key causes of failure? When these

questions are answered the next step is to assess the possibility of failure. Thus

focusing on, what is the severity of the effect of failure? How likely is the failure to

occur? How likely is the failure to be detected?

25 | P a g e

2.5 Managing Supply Chain Disruption

Third-party logistics providers must be aware of potential re-occurring risks and

demonstrate this to its customers to ensure supply chain resilience can withstand

predictable and unpredictable circumstances. According to Waters (2011) supply

chain risk management “is the process of systematically identifying, analysing and

dealing with risks to supply chains”. It is critical for logistics managers to analyse the

organisations overall risk strategy and determine the logistics requirements. The

supply chain risk strategy should include long-term goals, plans, policies, culture,

resources, decisions and actions based on risk in the supply chain (Waters, 2011

p.82).

2.5.0 Frameworks to Manage Supply Chain Risk and Disruption in 3PL`s

2.5.1 Framework 1: Typical Risk Management Process

The “typical” risk management process portrayed by Hallikas, Karvonen, Pulkkinen,

Virolainen & Touminen (2004) in the case of this paper is a third-party logistics

provider`s. The process consists of four elements which are risk identification, risk

assessment, decision and implementation of risk management actions and risk

monitoring.

2.5.2 Framework 2: Supply Chain Risk Management Process

Christopher (2011) describes how to achieve successful supply chain risk

management strategy through a seven step process. In order to understand risks

organisations must primarily understand their upstream and downstream supply

chain in order to grasp the supply and demand network exposures faced by

organisations. Organisations may understand their downstream routes and customer

buying behaviour; many do not fully understand their upstream first tier suppliers

who often depend on their second and third tier suppliers for continuity. Important

tools for understanding the supply chain include mapping the entire network or

detailing the “critical path” (Christopher, Logistics & Supply Chain Mangement,

2011).

Improving the supply chain can be achieved by simplification in improving process

reliability, reducing process variability, and reducing complexity. Businesses that

have been operating for many years have not planned improvement plans, but have

26 | P a g e

developed them in order to adapt to customer needs and opportunities at that time. In

particular, six sigma methodologies can be utilized to reduce variability (Christopher,

Logistics & Supply Chain Mangement, 2011).

The supply chain network is comprised of nodes and links. Nodes can be understood

as the various points and facilities in a supply chain such as suppliers, manufacturing

sites, distribution centres and retailers. Links are viewed as the extensive source of

linkage between each node which can include the physical flow of materials and

good, information flow and the financial flow. Supply chain network vulnerability

can be determined by the risk of failure of the nodes and links. Characteristics of the

critical path include (Christopher, Logistics & Supply Chain Mangement, 2011):

1. Long lead time.

2. Single source of supply with no short-term alternative.

3. Dependence on specific infrastructure.

4. High degree of concentration amongst suppliers and customers.

5. Bottlenecks that material and finished products must flow through.

6. High levels of identifiable risk (i.e. supply, demand, process, control,

environmental).

Once the critical nodes and links are identified in the supply network, risk mitigation

planning and developments will be created to alleviate or remove the potential of the

risk. In some cases re-engineering of the supply chain may be necessary. Cause and

effect analysis is a tool that can identify the root causes of problems which often

follows with a method of removing or avoiding causes (Christopher, Logistics &

Supply Chain Mangement, 2011).

Supply chain visibility is described by (Heaney, 2013) as “the awareness of, and

control over, specific information related to the product orders and physical

shipments, including transport and logistics activities, and the statuses of events and

milestones that occur prior to and in-transit”. However, if there is lack of visibility in

the operations and flow of inventory throughout the upstream and downstream of the

supply chain issues may arise and be undetected for weeks or months before it is too

late to take action against it. Tools that can be used to improve visibility are supply

chain event management (SCEM) to reduce uncertainty for the occurrence of

27 | P a g e

unplanned events and radio frequency identification (RFID) to enable “track and

trace” (Christopher, Logistics & Supply Chain Mangement, 2011).

In the initial stages of the supply chain risk management process resources are

required and the creation of a permanent supply chain continuity team is essential.

Business continuity teams can focus on IT/IS or financial risk perspectives, however

the biggest risk to business continuity lies in the supply chain. Teams should be

cross-functional to be capable of undertaking detailed analysis and implementation

of the supply chain risk management process. Ongoing risk registers should be

maintained and reassessed to identify and mitigate vulnerabilities along the supply

chain. The team should report to the board of management or director of an

organisation so risk can be aligned with business objectives (Christopher, Logistics

& Supply Chain Mangement, 2011).

Supply chain networks can be complex, in order to manage risk more effectively

upstream and downstream to the focal firm each partner or entity involved in the

network should take responsibility for implementing risk management procedures.

As a result the supply chain would become more adaptive and resilient to risk. There

is an opportunity in working with suppliers where in some cases suppliers are

required to meet stringent quality standards of products, if the same principle is

placed on monitoring and managing supply chain vulnerability (Christopher,

Logistics & Supply Chain Mangement, 2011).

2.5.3 Framework 3: Five Factors for Managing Supply Chain Disruption

Curkovic, Scannell & Wagner (2015) highlights five key factors for managing

supply chain risk which consists of corporate strategy, supply chain organisation,

process management, performance metrics and information technology.

Factor 1: Corporate Strategy

Organisations must implement supply chain risk assessment and management

strategies that align with the corporate strategy to mitigate the possibility of

disruption, although external risk such as competitors and customers cannot be

strictly controlled. Investment in systems for increased monitoring and controlling

should be aligned with cost efficiency initiatives, for instance with suppliers

(Curkovic, Scannell, & Wagner, 2015).

28 | P a g e

Factor 2: Supply Chain Organisation

Risk management application within an organisation should be manged and co-

ordinated by a supply chain risk manager who is responsible for the development and

implementation of risk management and works closely with corporate risk managers,

supply chains managers and partners. There should be a key focus on disruption

avoidance, rather than the traditional cost efficiency approach (Curkovic, Scannell, &

Wagner, 2015).

Factor 3: Process Management

Process management is the analysis and recorded documenting of the likelihood and

severity of risk exposures. This should be implemented at all levels the supply chain,

where processes should support integration with suppliers and customers risk

management activities. This results in accurate and readily available information for

decision makers. Failure mode and effects analysis (FMEA). Supplier profiling form

and supply chain (PFMEA). Lifecycle management and supplier repot cards

(Curkovic, Scannell, & Wagner, 2015).

Factor 4: Performance Metrics

Performance metrics is an enabler for measuring, monitoring and evaluating

organisational performance. Metrics should develop clearly defined performance

measurements which are aligned with that organisations characteristics and industry

requirements. 3PL performance metrics would entail service standards in shipping

accuracy, on time delivery, order accuracy, order fill rate and frequency of customer

complaints (Min, 2015).

Factor 5: Information Technology

Information technology has been growing rapidly over the decades and has now

found its use in the supply chain. Technologies such as warehouse management

systems (WMS) and transport management systems (TMS) are used to optimize the

supply chain as a result of fast and reliant information that can be used to make

decisions. 3PL customers are frequently demanding logistics software which is

gradually becoming a necessity for 3PL`s for competitive market survival (Wisner,

Tan & Leong, 2015, p. 331).

29 | P a g e

2.4.4 Comparison of Frameworks

The supply chain risk management frameworks discussed above hold different

arguments on the focus point of where risk can be managed most effectively.

Framework one by Hallikas Karvonen, Pulkkinen, Virolainen & Tuominen (2004) is

the most basic framework of the three which highlights the process of identifying

risks, assessing the risks, making decisions and implementing actions to handle the

risks and monitoring the risks carefully to mitigate or avoid the possibility of

disruption. This framework can be implemented by a 3PL organisation as it is

simplistic in analysis and enables the organisation to measure performance of risks

management.

As mentioned in framework two Christopher`s (2011) supply chain risk management

process expresses a very specific method of what elements are most crucial in

managing risk. Christopher`s (2011) approach is the most detailed of the three

frameworks and it can be argued this method is best suited for managing the supply

chain network. The supply chain risk management process entails understanding the

upstream and downstream network, improving the supply chain, identifying and

managing the critical path, improve visibility along the supply chain network,

establish a team specific to managing risk and work with customers and partners to

manage supply chain risk.

Framework three by Curkovic, Scannell & Wagner (2015) outlines five key factors

in managing supply chain disruption. This framework can be viewed as a hybrid of

framework one and two as it shares related elements in understanding the

organisations purpose and their supply chain network. Corporate strategy is

important in this framework as the notion of supply chain risk and disruption

management is exclusive to this approach. Given the recent study of this framework

it represents a changing mentality of disruption management being a part of

corporate strategy given the impact it can have on organisations performance ability.

Framework three draws attention to process management more specifically than

framework one and two where process management is a part of a broader

perspective. There is opportunity to utilize tools and techniques to analyse the

likelihood and severity (risk priority matrix) in all three frameworks. Performance

metrics is key element amongst all three frameworks be that through establishing a

risk management team mentioned in framework two or in framework one where

30 | P a g e

performance metrics are used to monitor risk management effectiveness. Information

technology innovation has recently been integrated into the supply chain. IT has

become an increasingly demanded aspect of supply chain management and in

particular 3PL organisations to meet customer requirements. However, framework

one and two have little or no indication of the importance of IT is supply chain risk

and disruption management.

2.5 Chapter Conclusion

The literature has featured many perspectives and methods in managing supply chain

risk and supply chain disruption. The focus has consistently been concerned

throughout the paper with third-party logistics (3PL) providers and the exposures

they face within their supply chains. Key points of interest have been the definition

of risks. Where risk is sourced from and the frameworks applied to identify these risk

sources. Further investigation into managing risk has been undertaken to equip the

reader with a breath of differentiating knowledge and perspective by following the

risk management frameworks. The various tools and techniques outlined have proven

effective in theory for analysing data and producing a solution to unexpected

disruptions. The objective of this literature is to utilize the various risk aspects and

enablers to create what is known as supply chain resilience with the purpose of

developing a 3PL or any organisation with global reach and control over the flows of

materials from procurement to the end user.

31 | P a g e

Chapter Three: Industry Contextualisation

32 | P a g e

3.0 Chapter Introduction

The context for this study is an extensive analysis of supply chain risks that have an

effect on logistics activities in organisations and outsourced third-party logistics

providers that are based in Ireland and Europe.

3.1 Industry Profile of Ireland

Given Irelands geographical location as an island it is required to facilitate and have

expertise in multi-modal logistics services which consists of road, rail, sea and air

freight. Road freight is the most popular mode of freight transport which carried

108.8 million tonnes in 2013, however this is significantly low compared to 2007

with peaks of 299 million tonnes ( Economic and Financial Evaluation Unit, 2015).

The maritime sector`s infrastructure was redefined by the Government in March

2013 as part of the new national ports policy to improve competitiveness and

effectiveness for maritime transport services. Ports were defined by three of the

following categories, ports of national significance Tier 1 (i.e. Dublin Cork and

Shannon Foynes), ports of national significance Tier 2 (Waterford and Rosslare) and

ports of regional significance (Drogheda, Dun Laoghaire, Galway, New Ross and

Wicklow) (Department of Transport, Tourism and Sport, 2014). The maritime sector

experienced a decline in imports between 2007 and 2009. Although, this has

improved since 2013 with 46.7 million tonnes, compared to 41.8 million tonnes in

2009 ( Economic and Financial Evaluation Unit, 2015). Rail freight has experienced

a downward trend in its usage particularly since 2004 which represented 2.1 million

tonnes compared to 570,000 tonnes in 2012. Similar to the maritime sector, air

freight has also experienced a decline from 144,000 tonnes in 2007 to 119,000 tonnes

in 2011. However there has been a recovery in air freight equating to 128,000 tonnes

in 2013 ( Economic and Financial Evaluation Unit, 2015).

3.2 Key Player in 3PL market in Ireland

According to Armstrong & Associates (2015) the top performing global third-party

logistics provider’s top rankings includes DHL Supply Chain & Global Forwarding,

Kuehne + Nagel, DB Schenker Logistics, Nippon Express, DSV (Armstrong &

Associates, Inc, 2015). Within the Irish transport and logistics industry key players

that have been awarded by the Irish Logistics and Transport Awards can be seen in

the table below.

33 | P a g e

Award 2016 2015 2014 2013

Overall Logistics &

Transport Excellence

DHL Global

Forwarding

Syncreon

Ireland

DHL Global

Forwarding

Irish

Aviation

Authority

Transport Company

of the Year

DHL Global

Forwarding

Syncreon

Ireland

National

Vehicle

Distribution

Caffrey

Internationa

l

Logistics Company

of the Year

GEODIS IWT Oakland

International

DB

Schenker

Freight Forwarding

Company of the Year

DB

Schenker

Ace Express

Ireland

DB

Schenker

DHL

Global

Forwarding(Figure 4: Key Players in Irish 3PL Logistics & Transport IndustrySource: adapted from (Irish

Logistics & Transport Awards, 2016, 2015)

34 | P a g e

3.3 SWOT Analysis of Irish Transport Industry

Strengths Opportunities

Lean sector

Effective import/export

Expertise and pragmatism in the

workforce

Sells well

Leading player in multi-modal

Compliance/Regulation

People skills

Flexibility of the sector

English Speaking

Economic growth

Growing agenda

Enhanced role for women –

Increased available workforce

Low cost air freight model

Technology

Centre of excellence – Increased

demand for supply chain

management roles and

international customs

requirements

HGV driver apprenticeship

scheme

Weakness Threats

Not creating talent from within

Perception of sub-sector

Air freight limitations

A lot of different industry bodies

Trade imbalance – equipment

Transport Policy

Non-compliance operations (road

freight)

Lack of investment

Changes in legislation

Resistance to change or

innovation – sector to become

less competitive

Economic decline

Lack of suitable trainers

Training funding issues

Lack of HGV driversTable 3: SWOT Analysis of Irish Logistics & Freight Transport Industry (Source: Expert

Group on Future Skills Needs, 2015)

3.4 Challenges in European Market

The European 3PL industry is highly competitive amongst providers where the most

significant driver of competition is the increasing number and complexity of

demands form customers. The demand for integrated services has made core services

such as transportation commoditised (Vasiliauskas & Jakubauskas, 2007). In order to

remain sustainable competitively 3PL have followed an increasingly popular

35 | P a g e

approach of consolidation. Tyan, Wang & Du (2003) states that consolidation is the

process of grouping several shipments from suppliers (shippers) into a large

shipment at the point of consolidation. Key challenges facing the European market

according to Vasiliauskas & Jakubauskas (2007, p. 71) include:

Maintaining profits as a result of the pricing pressures of customers.

Maintaining good customer relations along with cost negotiations, where

3PL effectiveness to provide exemplary service with small margin for

failure.

Globalisation of 3PL market where delivery service is required to reach

new geographical regions.

Customers are seeking the latest cutting edge technology for the delivery

of their goods.

The European and particularly the Irish market is home to the largest 3PL

competitors in the world.

The increasing popularity of fourth party logistics (4PL`s) providers.

3.5 Third-Party Logistics (3PL) Usage

Extensive research by Yang (2014) has indicated that there is a high rate of third-

party logistics provider usage among Fortune 500 companies, expressing that

approximately eighty per cent of Fortune 500 companies are using 3PL`s. Compared

to only forty per cent 3PL usage in Fortune 500 companies in the early 1990s.

Armstrong & Associates Inc (2014) revealed that the 3PL global market in 2014

soared to revenues of $750.7 billion.

3.6 PESTLE Analysis of European Logistics and Transport Industry

PESTLE analysis or often referred to as PEST analysis is used to identify forces in

the macro-environment that are currently affecting an organisation or that will be an

effect in the future. PESTLE analysis is expressed as an acronym that refers to

political, economic, social-cultural, technological, legislative and ecological. The

PESTLE analysis can be complex given the external nature of the environment, as

such the primary use of this analysis is to identify the key factors that could affect the

organisation (Analysing the Organisational Environment, 2001).

36 | P a g e

Political

Transport industry deregulation has been one of the most important policy

developments in the European transport. Deregulation has been an ongoing process

to improve competition between various transport modes and to improve the

efficiency levels of the transport modes (i.e. fleet utilisation, freight rates, lead times

and service quality) and the introduction of international players. Deregulation in

particular the European rail transport industry has increased competition and the

attractiveness of rail transport for freight. Europe-wide rail networks have reduced

travel time and costs transport and has seen positive effects on the environments.

Policies aim to reduce emissions and influence consumer behaviour (Ecory, 2015)

Economic

The EU`s GDP for 2014 reached €13.92 billion, where EU`s trade represented 20%

of global exports and imports (European Union). The transport industry plays a

significant role in the overall economy representing 7% of total GDP and has a

dependency on the manufacturing industry.

As a result of globalisation and economic growth, the shift of market power toward

ASEAN and China apposed to the U.S. and EU. This shift has caused intense

competition for European 3PL`s as Asian 3PL providers have been increasing in

competitiveness in Europe (Ecory, 2015).

Social

The EU population development has grown from 406.7 million inhabitants in 1960 to

504.5 in 2012. The total EU28 population is expected to increase by approx. 2.2%

between 2013 and 2030. This low growth of EU population is expected to have an

impact on the EU logistics sector. There is also an ageing society in Europe as there

is a low birth rate and higher life expectancy. The proliferation of e-business in will

have an effect on the logistics sector as customers will desire the tracking of freight

and vehicles and cloud services to enable data sharing. However a challenge with

web enabled services presents the challenge of information and data privacy.

Furthermore, changes in consumer buying behaviour as a result of continuously

changing lifestyle. This will then have an impact on the amount of order processing,

transport supply systems and transport loads (Ecory, 2015).

37 | P a g e

Technological

The technology revolution has begun to trickle into the transport and logistics sector,

where there is a need for clean and energy efficient vehicles to meet EU energy

consumption objectives. These developments in vehicle and transport technologies

will see an increase in costs to the logistics sector. However, there will be a reduction

in emission and energy dependency which is beneficial. Innovations in technology

such as 3D printing are expected to have an impact as a result of eliminating the

manufacturing industry. Thus, decreasing the need for transport and vehicle services.

However, this is not expected to be prevalent in this next few years compared to the

long term growth of technological advancements. The trend toward supply chain

resilience has become a crucial importance in safeguarding against global supply

chains. There is seen to be improvement in logistics management, control and use of

resources. This results in increased freight transport capacity, performance and

reliability (Ecory, 2015).

Legal

Social regulations in the EU regarding working time in the road freight transport

sector which directly impacts the freight transport and logistics sector in terms of

efficiency. This increases waiting times and reduces driver flexibility, but improves

road and driver health and safety. In the EU, heavy goods vehicles (HGV) are

constructed so that they do not cause harm or interfere with other vehicles. The

limitations on the weights and dimensions aspect of this regulation affects the

logistics and freight transport sector by the types of loads and the number of

transport processes to meet regulation which infers higher costs and decreased

competitiveness (Ecory, 2015).

Environmental

Fossil fuel scarcity and energy has caused increased fuel prices, this is a risk to 3PL`s

as transport and production is continuously increasing and they require high volumes

of fuel in order to operate. Raw material scarcity is another increasing issue as

supplies of raw materials are eroding heavily, as a result lack of sourcing translates

into the reduced demand for inbound transportation. Transport activities have been

under intense scrutiny in Europe for their high contribution to GHG emissions. Thus,

38 | P a g e

European governments are insisting on implementing and investing higher on higher

standard carbon emission vehicles (Ecory, 2015).

3.5 Cases of Internal and External Disruption in Transport & Logistics Sector

The recent migrant crisis of refugees fleeing from Syria, Iraq and other conflict zones

throughout 2015. European governments struggled to handle the mass amounts of

asylum seekers entering the borders. The flows of these migrants had an effect on

supply chain flow of cargo through Europe. By the start of 2016, eight different

previously open borders have new checking procedures. The situation cost the UK

economy $1 billion and had a high threat on the free movement of cargo in Europe

(BSI`s Supply Chain Risk Exposure Evaluation Network (SCREEN), 2016).

When the volcano in Iceland erupted in 2010 spewing ash into the atmosphere

resulting in the closure of much of Europe`s air space and approximately 95,000

flights were cancelled (Wilding, 2013). The automotive industry took another

catastrophic hit, where Ford`s assembly line in its Michigan plant was halted to a

ground stop for four days. Volkswagen and BMW in Europe as well as Nissans

Japanese plants were forced to stop production in two plants (Wilding, 2013). The

organisations 3PL providers could not transport the raw materials required to

complete productions and as a result production lines could not be continued. This

could have been prevented however if organisations implemented multiple sourcing

strategies to mitigate against disruption during periods of environmental occurrences

in specific regions of the supply chain. This was a period of decline in the European

3PL industry.

Recent disasters figures revealed by Resilinc (2016) identifies for the third

consecutive year in row factory fires or explosions has been the most frequently

reported supply chain disruption, highlighting the explosions in Tianjin, China in

August, 2015 causing fatal damage to port infrastructure, halting port operations till

mid-September and adversely effecting industries in weeks of delays and company

share price (Donati, 2015). In the Resilinc 2014 EventWatch Report typhoons were

the most harmful disruptions in 2014 in terms of total cost ($12 Billion+) and total

time to recover (98 weeks) (EventWatch 2014 Annual Report, 2014).

39 | P a g e

3.6 Case Study of Organisation Being Researched

The researcher of this paper has performed data collection in the organisation in

which he was employed. The researcher worked in the logistics department for six

months. The researcher’s duties and responsibilities were delegated by the warehouse

manager. Between the time of the researchers work contract ending and the

collection of data stage for this paper there has been a new warehouse and logistics

manager assigned.

The 3PL organisation is known to operate as a freight forwarder. The organisations

presence in the Irish market is strong with three offices in Ireland. The headquarters

being situated in Dublin and two more offices in Cork and Shannon. The company

handles many high profile clients that are leaders themselves in their respective

industry. The client portfolio involves managing the logistics processes of goods

such as electronics and high tech, furniture, and the key pharmaceutical products

which are managed heavily in this organisation given Ireland`s success and foreign

direct investment (FDI) in this industry.

The researcher recounts his experiences of the organisation, where no major supply

chain disruptions occurred. However, from the internal perspective vulnerabilities

laid in information inaccuracy from partners and many times goods could not be

shipped until confirmation of accurate documentation was established given the

tedious nature of pharmaceutical products in particular. Within the warehouse quality

management of goods being stored was a high priority and instances where

contamination and damage of pallets was prevalent. All pharmaceutical goods had to

be kept between temperatures of 15 to 25 degrees in order to maintain quality.

Temperature control monitoring can be monitored by the organisation and the

organisations customers. So if products are in danger of temperature control alerts

will be sent to both parties for action. The organisation had a sophisticated IT

structure throughout its organisation. However, quite often it was found that IT

systems would crash and become unusable for staff in the organisation. A particular

occurrence witnessed by the researcher found that one employee could not conduct

work effectively because the information required to coordinate the logistics of the

products was not available. Externally to the organisation certain factors would have

slight effects on the smooth logistical movement of goods. An example of a low

severity threat would be traffic. In terms of the scale of severity customs inspections

40 | P a g e

could disrupt the scheduled delivery of a shipment where goods may arrive one day

or more later. At times the adverse weather in Ireland disrupted the movement of

freight incoming and outgoing through Ireland via sea or air. In some cases, haulier

availability was sparse particularly for the temperature controlled trucks.

41 | P a g e

Chapter Four: Methodology

42 | P a g e

4.0 Methodology Introduction

Chapter one highlighted the aims and rationale of this paper. The literature has

illustrated a detailed perspective on the research topic in the chapter two. The

purpose of chapter three is to clarify the methodology undertaken by the researcher

to gain perspective via primary research data required for the criteria of this paper.

The methodology chapter provides the reader with insight on the research topic and

how the primary research was prepared and conducted to gain that information. The

decision making involved in choosing specific research methods and reasoning

behind those decisions will be discussed.in this chapter of the paper. Saunders, Lewis

& Thornhill (2012, p. 4) describe how the methodology is the theory of how research

should be undertaken in order to give the reader sufficient information to make an

estimate on the validity or reliability of the researchers methods.

4.1 Research Objectives

Objective 1: Assess the use of methods and frameworks for managing risks in

3PL firms

Objective one is concerned with the validating the use of frameworks and methods

for managing risks in within the chosen organisation for the research. The research

will collect data on how these frameworks have or will benefit the organisation.

Objective 2: Identify what tools and techniques can be used to identify and

manage risk in 3PL`s

The aim for objective two is to gain insight to whether 3PL firms are currently

utilizing tools and how these tools will aid in identifying and managing risk and

disruption.

Objective 3: Assess the impact of risk on 3PL`s in terms of frequency and

severity

43 | P a g e

Objective three is a very interesting particle of the research as the researcher hopes

that the interviewee will provide a wide breath of industry examples that can then be

applied to methods for further data collection.

4.2 Research Onion

Saunders, Lewis & Thornhill (2012) depict the approaches and philosophies involved

in understanding research which is communicated through the concept of the

“research onion”. The purpose of the onion is to identify what elements are most

favourable to the nature of the research. In the first layer, pragmatism was chosen as

the most suitable research philosophy. The second, layer regards the approach to the

research. The researcher felt deduction was the most favourable as. Layer three, is

the methodological choice which focuses on the mono method. The fourth layer

regarding strategy is concentrated on a case study of a 3PL firm. The fifth layer, time

horizon has chosen cross sectional. The sixth layer is the techniques and procedures

otherwise known as the data collection and data analysis (Saunders, Lewis &

Thornhill, 2012, p.128).

Figure 5: Research Onion (Source: Saunders, Lewis & Thornhill, 2012, p. 128)

4.3 Research Philosophy

The research philosophy chosen for the research process is pragmatism. Before

pragmatism can be discuss constructivism and objectivism must be understood.

44 | P a g e

4.3.1 Objectivism

Objectivism according to recognises that social phenomena and their meanings exist

separately to social actors. In the context of this research the social phenomena is

supply chain risk and disruption and the social actors are those that provide third-

party logistics services. Therefore the research philosophy is how supply chain risk

and disruption affects third party logistics providers (Saunders, Lewis & Thornhill,

2012, p.131).

4.3.2 Constructivism

Constructivism argues the opposite of objectivism. Constructivism is a belief that

social phenomena are created by social actors. Therefore, constructivism contends

that supply chain risks and disruptions are created as a result of the behaviour of

organisations and third-party logistics providers that are impacted by those factors

(Saunders, Lewis & Thornhill, 2012, p.131-132).

4.3.3 Positivism

Positivism generates hypothesis (research questions) that can be tested which enables

explanations to be measured against accepted knowledge of the world we live in.

This setting creates a body of research that can be replicated by other researchers to

produce the same results. The focus is on quantifiable results that grant themselves to

statistical analysis (Saunders, Lewis & Thornhill, 2012, p. 134-135).

4.3.4 Realism

Realism is similar to positivism in its processes and opinion that social reality and

the researcher are independent of each other, thus not creating bias results. However,

where they differ is that realism assumes that scientific methods are not perfect. The

belief is that all theory can be revised and the definition of what certain reality is may

not exist without continually researching and having open mindedness to using new

methods of research (Saunders, Lewis & Thornhill, 2012, p.136-137).

4.3.5 Interpretivism

Interpretivism refers to the approaches underlining the nature of people`s

participation in social and cultural life. Researchers working within this tradition

analyse the meanings people confer upon their own and other`s actions and take the

view that cultural existence and change can be understood by examining what people

45 | P a g e

think about, their ideas and the meanings that are important to them (Saunders, Lewis

& Thornhill, 2012, p. 137).

4.3.6 Selected philosophy Pragmatism

Pragmatism is the philosophy which argues in favour of both constructivism and

objectivism are credible methods to approach the research. Pragmatism enables the

researcher to examine the subject matter from either or both perspectives regarding

the influence of social actors and then utilizes these to create a practical approach.

This can then be used to identify problems and solutions (Saunders, Lewis &

Thornhill, 2012, p.130).

4.4 Research Approach

4.4.1 Induction

Induction would be an alternative to deductive where a sample population can be

interviewed to gather insight on the experience of a particular setting. The purpose of

this approach is to gain perspective on certain contexts, to aid in understanding the

nature of the problem. The function of the research would be to analyse interview

data and come to an understanding of the topic. This research should result in the

formulation of a theory, or a conceptual framework (Saunders, Lewis & Thornhill,

2012, p. 146).

4.4.2 Abduction

Abduction shifts back and forth between theory to data (deduction) and data to

theory (induction) which is compiled as combination between the two philosophies.

Abduction is initiated by observation of a unanticipated realisation, where a plausible

theory of how this could have occurred (Saunders, Lewis & Thornhill, 2012, p. 147).

4.4.3 Selected Philosophy Deductive

Deductive is the approach the researcher has chosen for the research which involves

the development of a theory (Literature) that is then subjected to a rigorous test

through a series of propositions (Research questions) to produce an outcome related

to the theory. The aim of the research would be to conclude with an outcome either

46 | P a g e

in favour or against the research question. The process of deduction shifts from

theory to the research questions, to the collection of data, followed by findings to

confirmation or rejection of the research questions. This should encourage revision

of the literature and often repeats the process of theory (Saunder, Lewis & Thornhill,

2012, p.145-146).

4.5 Research Choices Characteristics

4.5.1 Selected Characteristics Mono Method

Mono method involves the use of single data collection techniques and

corresponding analysis procedure (qualitative or quantitative research design) and or

procedures to answer the research questions (Saunders, Lewis & Thornhill, 2012, p.

164).

4.5.2 Multiple Methods

The multimethod research is the opposite of the mono method where there is more

than one data collection technique and analytical procedures to answer the research

questions. Although the multiple methods is more than one data collection technique

is used with associated analysis procedures, however this is restricted within either a

quantitative or qualitative design. For instance, quantitative data can be collected by

questionnaires, structured observation and analysing this data using statistical

procedures which is referred to as multi-method quantitative study. Alternatively,

qualitative data can be collected through in-depth interviews and then analysing this

data using qualitative procedures which is known as multimethod qualitative study

Saunders, Lewis & Thronhill, 2012).

4.5.3 Mixed Methods

Mixed methods research is both quantitative and qualitative researches which are

combined in the research design. These may be formed together in many different

ways and with different levels of complexity such as simplistic, convergent forms to

complex or fully integrated forms. The method of combining quantitative and

qualitative has led to various dimensions and characteristics of mixed methods

research. For instance, the use of both methodologies at every stage is known as fully

integrated mixed methods research, alternatively the use of both at only one stage or

at particular stages is referred to as partially integrated mixed methods research

(Saunders, Lewis & Thornhill, 2012, p. 165-166).

47 | P a g e

4.6 Research Strategy

4.6.1 Selected Strategy Case Studies

Case Studies are an approach that explores the research topic or phenomenon within

its context, or within a number or real life contexts. Case studies are the opposite to

the experimental strategy where contextual variables are significantly controlled and

may compromise validity. Furthermore, case studies differ from the survey strategy

as the research is undertaken in context where the ability to explore and understand

this context can be limited by the number of variables of which data can be

controlled. The case study is particularly beneficial where the researcher aims to gain

a insightful understanding of the context of the research and processes involved. The

case study is used in explanatory and exploratory research. Methods of the case study

may be quantitative or qualitative or a mix of both to collect and analyse data

(Saunders, Lewis & Thornhill, 2012, p. 179).

4.6.2 Selected Strategy Interview

The research interview is a purposeful conversation between two or more

participants, where the interviewer is required to establish understanding through

clear and relevant questions with the aim of the interviewee responding with

appropriate answers. The usefulness of interviews can aid in gathering valid and

reliable data relevant to the research questions and research objectives previously

prepared. Interviews can act as a tool for refining or validating ideas that have not

previously been visible and can be then formulated to suit the research questions and

objectives (Saunders, Lewis & Thornhill, 2012, p. 372)

4.7 Time Horizon

4.7.1 Selected Time Horizon Cross Sectional

Cross sectional research is where the study is of a particular phenomenon at a

particular time. This can be due to research projects for academic courses being

48 | P a g e

undertaken with time constraint. Cross-sectional study often utilizes the survey or

interview strategy, for instance seeking to describe the incidence of a phenomenon or

to explain how factors are related in different organisations. In the case of this paper

how the management of supply chain risk and disruption is identified, measured and

managed (Saunders, Lewis & Thornhill, 2012, p. 190).

4.7.2 Longitudinal

Longitudinal studies focuses on the study of a particular phenomenon over an

extended period of time. the advantage of longitudinal study is its capacity to change

and develop over time. This type of study will provide the researcher with a measure

of control over the variables being studied.

4.8 Conclusion

The research path chosen for this methodology has taken the pragmatism philosophy

as it both allows constructivism and objectivism. The research approach has chosen

deductive in order to justify the literature with the research questions. The strategy

chosen is a combination of an organisational case study and in depth interviews. The

data collection took place on a cross sectional time horizon and the characteristics

illustrated a mono method.

49 | P a g e

Chapter Five: Findings and Analysis

50 | P a g e

Chapter 5: Findings & Analysis

5.1 Chapter Introduction

The paper was conducted to establish frameworks and methods of managing supply

chain risk and the possibility of supply chain disruption, while also developing the

use of tools and techniques to aid in identifying and managing risk and disruption.

The following data and analysis came as a result of an in-depth interview.

A detailed transcript of the interview which highlights the key findings is shown in

Appendix B. The interview consisted of eight questions each pertaining to the

research objectives and key findings from the literature. A case study of the

organisation being interviewed was compiled in Chapter three, section 3.6. The aims

of the research is to examine the objectives and establish whether there is correlation

or contrasts between the literature and the interview question. The questions used for

the interview as a base line for discussion can be seen in Appendix A.

5.2.1 Objective 1: Assess the Use of Methods and Frameworks for Managing

Risk in 3PL`s

Introduction to Objective One

The findings from the interview in relation to the management frameworks for

managing risk identified that risk management for that organisation was focused

primarily on risk elements rather than risk management strategy as a whole.

Participant One

The interviewee agrees that managing supply chain risk is important in preventing

supply chain disruption and maintaining customer satisfaction.

Primarily, the main internal risk within the organisation takes place in the warehouse

and process management is an important factor and relates to Curkovic, Scannell &

Wagner`s (2015). The interviewee emphasizes the dependency on its processes to

run smoothly in order to maintain the quality of its products.

51 | P a g e

“Risk management we are sort of content with being temperature monitoring

and controlled within the warehouse. So basically, the monitoring of our

temperature the tolerance would 5 degrees to 25 degrees for control, but for

monitoring the temperature would be 15 to 25 degrees.”

The management within this organisation has identified a key risk and created a

strategy or plan to mitigate against the possibility of that risk occurring by a method

of stabilizing the temperature control environment of the products in the storage and

delivery phase.

“Our products the majority of our products are pharmaceutical, then to

minimize the risk you would get a stable environment and monitor

temperature on a daily and weekly basis between 17 and 18 degrees”.

The interview gradually diverged into other elements of supply chain risk

management where the notion of improvement plans was discussed with the

organisation and their effectiveness in improving process reliability and reduce

variability. For instance, lean six sigma.

“With the contracts people we would be invited into the meetings where we

would say what our thoughts would be and our feedback.”

The continuous improvement program throughout the organisation would aim to

simplify processes as explained by the interviewee “as simple as possible so it is

linear”. As a partial element of process management it is critical to measure

performance in order to identify which areas are lacking efficiency.

“Because our operations are simple, we have quite simple ones. Suh as the

number of pallets received, the number of pallets shipped, but there would

also be your number of returns.”

The role of IT has found a use in supply chains risk management as it provides real

time and readily available information for quick decision making.

“Our IT systems allows us to monitor the temperature of our products, it

shows us the location of our pallets, our storage utilisation so that we don’t

run out of shelf space.”

52 | P a g e

Framework Focus

(Hallikas, Karvonen, Pulkkinen, Virolainen, &

Tuominen, 2004) Typical Risk

Management Strategy

1. Risk Identification

2. Risk assessment

3. Decision and implementation of

risk management actions

4. Risk monitoring

(Christopher, Logistics & Supply Chain

Mangement, 2011) Supply Chain Risk

Management Process

1. Understand the supply chain

2. Improve the supply chain

3. Identify and manage the critical

path

4. Improve network visibility

5. Establish network continuity

team

6. Work with suppliers and

customers

(Curkovic, Scannell, & Wagner, 2015) Five

Factors for Effectively Managing Supply

Chain Disruption

1. Corporate strategy

2. Supply chain organisation

3. Process management

4. Performance metrics

5. Information technologyTable 4: Summary of Objective 1 Frameworks

5.2.2 Objective 2: Identifying What Tools and Techniques are Used to Identify

and Manage Risk in 3PL`s

Introduction to Objective Two

The tools and techniques which have been detailed in the literature of chapter two

which focuses on three tools each with their own characteristics. The findings from

the interview provided insight that these tools do have a place in risk management.

Particularly, Ahmed, Kayis & Amornsawadatana`s (2007) cause and effect analysis

53 | P a g e

which was described as a key tool in identifying solutions to failures within the

organisation.

Participant One

The research for objective two began with the cause and effect tool. The researcher

asked the participant if the tool had relevance and legitimate capability for

identifying solutions to failures within the organisation.

“Yes, we would use the cause and effect analysis for the five why`s? You

know why? Why? Why? Until there is no more answers. Why did it go

wrong? To find the errors”

The validation of the cause and effect in the organisation proved a positive choose of

the many tools to integrate into the literature review. The interviewer introduced a

similar tool known as the failure mode and effect analysis (FMEA) which

Christopher (2011) highlighted as an important tool. When discussing this tool the

interviewer asked the interviewee if FMEA would be useful to the organisation as it

is arguably more detailed than cause and effect analysis but viewed as more

complex. To which the interviewee insisted “of course yes” this tool would be

beneficial.

“We have previous employees who would do that surely and so you look at

the possibilities of what can go wrong? How would it go wrong? And if it

does go wrong how can you correct each of them?”

Supply chain modelling and the Monte Carlo simulation can be viewed as highly

beneficial to an organisation which requires careful examination and management of

its processes. The simulation re-enacts the supply chain process however many times

deemed appropriate to draw a clear conclusion on where risks are occurring. The

result is detailed statistical data that profiles risk and the effects those risks have on

customer service (Schmitt & Singh, 2009). However, effective this tool is to an

organisation; it is also complex and requires extensive analysis. When presenting this

to the interviewee, its validity was not certain in the context of this organisation.

54 | P a g e

“Previously it could have been used I’m not sure, again when your chasing

contracts and your trying to improve a current contract you map the flow of

the job and you see where the risks are.”

Tool Description

(Ahmed, Kayis , & Amornsawadatana, 2007)

Cause and Effect Analysis

Identifies the cause and effect of a risk or

disruption through rigorous investigation

and questioning until there is a solution.

(Christopher, Logistics & Supply Chain

Mangement, 2011) Failure Mode and

Effect Analysis

What impact of severity will the failure

have on the supply chain? How likely is

the failure to occur? How likely is the

failure to be detected?

(Schmitt & Singh, 2009) Supply Chain

Modelling and Simulation

Simulates or re-enacts the supply chain

process to aid in identifying risks and

bottlenecks.Table 5: Summary of Objective 2 Tool and Techniques

5.2.3 Objective 3: Assess the Impact of Risk on 3PL`s in terms of Frequency and

Severity

Introduction to Objective Three

Objective three focuses on the impact of risks specific to 3PL`s in regards to their

frequency and severity.

Participant One:

This stage in the interview involved the discussion of impacts of risk or disruption

within the organisation. Towards the end of the objective two questions the

interviewer brought to light the risk priority matrix. The risk priority matrix is a

crucial technique in assessing the likelihood and severity of multiple risks which are

55 | P a g e

then put in order of rank in importance (Cai, Li, & Yang, 2011). The interviewee’s

initial response to the risk priority matrix appeared to be understood.

“Yes, pre-identified risks and then try and solve the risks and then when

something happens you have an answer immediately.”

However, when the interviewer asked the interviewee to discuss the organisations

risk priority matrix and explain the risks which are ranked highest and why. The

interviewer explained that there was “no” risk priority matrix implemented in the

organisation. Although, the interviewee mentioned that risk management initiatives

can be applied in conjunction with customers requirements “again their discussed in

weekly/monthly management meetings, where we go through each customer and you

talk about performance and depending if risk initiatives happen”.

Unfortunately the opportunity to discuss the various risks which were carefully

examined in the literature review particularly in Christopher`s (2011) risk profile and

Wagner and Bode`s (2008) two tier internal and external risk classification method.

It was requested by the interviewer to debate what plans are evident in managing risk

within the organisation. Whether that be an approach of mitigation where the

probability is reduced or contingency which is reducing the severity. Which

approach is most suited to the organisation or is it a combination of both?

“A combination of both, you have a low severity rate and then you have to

mitigate against it, and you try and minimize it so that the risk is minimal.”

The interviewer followed up on the risk planning question by asking the interviewee

to elaborate with an example of this approach to manage a risk that affected the

organisation.

“I spoke about the capacity of the warehouse, so a couple of months back we

had too many products in the warehouse and we had shipments coming in

and the volume so we tried to plan and mitigate overflowing the volume in the

warehouse. Basically, we spoke to our customers we made a flow chart for

what they were shipping and what they were receiving and we just gave them

an alternative warehouse”.

56 | P a g e

The interviewer then took the opportunity to suggest transportation risk for drivers

and how is that managed in the organisation.

“No, again we sub-contract with our drivers and we would expect them to

look after that themselves”.

The researcher found this intriguing as it can be interpreted as a lacking risk

management awareness or lacking sensitivity towards the exposure of risk once the

transfer of goods from one organisation to another where risk is shared not passed on

and if disruption occurs it is the organisation in charge of the logistics management

which incurs damage to its reputation and customers satisfaction.

Framework Focus

Cristopher’s (2011) Risk profile Analyses different types of risk

Manners-Bell (2014) Internal and

External Analysis

Identifies whether risk may occur

internally or externally

(Bode, Kemmerling, & Wagner, 2013) Two

tier: internal and external risk

classification system

Determines the likelihood and severity of

risk which is then prioritized in terms of

importance.Table 6: Summary of Objective 3 Frameworks

57 | P a g e

Chapter Six: Conclusions & Recommendations

58 | P a g e

Chapter 6: Conclusions & Recommendations

6.1 Conclusions

This paper has displayed an in-depth analysis of the various frameworks and

methods of manging and identifying risk from some of the most highly regarded

authors in the industry. A wide breath of risk exposure has been described in detail in

the context of 3PL organisations to raise awareness of the potential of supply chain

disruption. It can be seen in Appendix B the validity of these frameworks from a

management perspective as this was established during the interviews.

The tools and techniques were an important element of the usefulness of this paper.

The literature has described the use of these tools within industries. However, it is

still in its infancy in implementation of organisations operating in smaller markets

such as Ireland.

The broad analysis of the risk exposures and potential disruptions created great

interest for the researcher and would have been an intriguing discussion in the

interview. However, examples of risks were sparse and overall risk awareness in

terms of the risk priority matrix was fully implemented within the organisation.

Perhaps a new risk management focus for this organisation will benefit their

operations in the future to improve customer satisfaction.

6.2 Limitations to Research

The first limitation of the research was the changing availability of research

participants for the interview. The first interview was scheduled three months in

advance. As preparation for the interview was complete the interviewer was not able

to reach the primary contact after multiple attempts. The secondary contact was

available and an interview was arranged for one of the departments managers within

the organisation. Additionally, a meeting with a director within the same organisation

was scheduled. However, it had to be scheduled two weeks in advance. This was

within one day of submission and on the day the contact explained that she was not

available for the interview. Ideally, two interviews would have been more

advantageous than one but the results were still satisfactory.

The second limitation was in regards to the lacking literature on specific 3PL supply

chain risk and disruption management strategies. The action taken was to use general

59 | P a g e

risk and disruption management strategies and apply it to the 3PL industry. From the

researchers analysis this was sufficient in approaching the risk management.

The interviewee was recently appointed his position approx. one year ago. As such

the interviewee’s knowledge on the organisational history of risk and disruption, risk

management strategies and risk management tools being used within the organisation

may not have been as in-depth as he predecessor.

6.3 Recommendations

In the research interview it was surprising that the organisation did not have a

specific risk management strategy or risk priority matrix as a reference point for risk.

The researcher would recommend that the topic of supply chain risk and disruption

be introduced into further continuous improvement plans,.

The organisation in the research could improve its supply chain by discussing risk

and disruption management to its associated partners within its freight forwarding

structure. An increased understanding amongst partners can mitigate or avoid risk

exposures and build a more cooperative relationship.

6.4 Recommendations for Further research

There needs to be an increased study into the topic of supply chain risk and

disruption management in the future. As trends such as climate change, globalisation

and supply base reduction continues to increase more occurrences of disruption will

happen. Investigation into this topic for the future preparedness and awareness of risk

exposure will be monumental for all firms not just 3PL`s.

The notion of simulation is a highly effective tool in identifying and managing risk

and disruption. The implementation of this tool and further research into improving it

can be an excellent safeguard for the future of logistics.

60 | P a g e

Appendix

61 | P a g e

Appendix A

Research objectives and Interview Questions

Research Objectives Interview Questions

Assess the Use of Methods/Frameworks of Managing Risk in 3PL`s

1. Can you recall over the last 5 years if your organisation experienced any significant supply chain risks that resulted in disruptions? Please recount one example briefly.

2. Supply Chain Risk Management Process (Christopher) is an example of a system for analysing, improving and managing a firms supply chain network, visibility and relationship with partners. In your organisation do you implement a similar risk management strategy?

3. What are the key components required to effectively manage supply chain risk in decreasing order of importance?

To Identify What Tools and Techniques to Identify/Manage Risk in 3PL`s

4. Cause and Effect analysis can be helpful in identifying root causes of disruption/uncovering bottlenecks/understand why a process is not working. Do you use cause and effect analysis to identify or mitigate risk exposure?

5. Failure Mode and Effect Analysis (FMEA) is another tool that evaluates a process to identify where and how it might fail and assess the impact of various failures. Has your organisation implemented this tool in its processes?

6. Simulation is a tool which can create a virtual enactment of supply chain disruption to evaluate and quantify the threat and impact of supply chain risk at each location and determine its effect on customer service. Has your organisation been involved in methods such as this and how has it benefited?

Assess the Impact of Risk on 3PL`s in terms of frequency and severity

7. Risks come in many different forms. By reviewing the risk priority matrix what risks have effected your organisation most frequently?

8. What risk in your experience has caused a severe impact?

9. What mitigation and contingency techniques are in place to avoid or mitigate the impact of risk in your organisation?

62 | P a g e

Appendix BTranscripts of Interview

Researcher: Hi, is that (Anonymous)? Niall Hanley here for the interview scheduled today.

Organisation 1: Oh yes, how are you Niall?

Researcher: Very good.

Organisation 1: Right young man work away there, work away

Researcher: I’m going to just grab a few questions for you now. So the first question is can you recall in your experience a time over the last 5 years or so if your organisation has experienced any significant supply chain risk that resulted in disruption? If you can recall an example and discuss it that would be great.

Organisation 1: In supply chains disruptions, examples would be, being in Dublin, weather issues, delay in shipments. What else would we have, that’s the main ones we would have here at the moment.

Researcher: Would there be any problems let’s say with regulations in different countries or customs have you ever had issues with that?

Organisation 1: The only issue we have with regulation would be customs regulations would be importations of pharmaceutical goods from India. So that’s the only disruption we have from time to time where the supplier would be unfamiliar with registration and they don’t give the correct documentation. That’s all we see at the moment Niall now.

Researcher: Okay, and has there been any issues internally? Maybe even unusual occurrences with fires or things of that nature.

Organisation 1: No, no.

Researcher: For my second question, I’m going to discuss some supply chin risk management frameworks or methods. Have you heard of Christopher’s supply chain risk management process? Which is a method of analysing, improving and managing an organisations supply chain network, its supply chain visibility and relationship with their partners. Does your organisation implement a similar risk management strategy?

Organisation 1: Yes, risk management we are sort of content with being temperature monitoring and control within the warehouse? So basically the monitoring of our temperature, the tolerance would be 5 degrees to 25 degrees for control, but for monitoring the temperature would be 15 degrees to 25 degrees. So the window closes 5 to 25 degrees

Researcher: And would that be your main risk management strategy, the quality management of products?

63 | P a g e

Organisation 1: Exactly, exactly of our pharmaceutical products, then to minimize the risk you would get a stable environment and monitor temperature on a daily and weekly basis between 17 and 18 degrees.

Researcher: Would you be involved in a improving the supply chain with continuous improvement plans or anything like that?

Organisation 1: That would come with the contracts people and we would be invited into the meetings where we would say what our thoughts would be and our feedback on it. The contracts manager would lead that planning.

Researcher: That seems to be right,

Researcher: What would you suggest are the key components required to effectively manage supply chain risk in order of important to lest important?

Organisation 1: Yes so, your terms of agreement and your contract details where you would bring up your queries, your procedures and then create your work instructions.

Researcher: So the aim would be to make the processes as simple as possible?

Organisation 1: Oh yes so as simple as possible so it is linear and so one flows into the other quite simply.

Researcher: Interesting, and in terms of performance metrics. Would you have any performance metrics within your organisation?

Organisation 1: Yes, again because our operations are quite simple, we have quite simple ones. Such as the number of pallets received, the number of pallets shipped, but there would also be your number of returns, how many times the customer would return a product. You would monitor the age of a product as well, keep an eye on its expiry date, that sort of stuff.

Researcher: Okay simple enough.

Researcher: Do you think IT plays a role in managing risk in your organisation?

Organisation 1: Of course, with our IT systems it allows us to monitor the temperature of our products, it shows us the location of our pallets, our storage utilisation so that we don’t run out of shelf space.

Researcher: Right, that sounds useful.

Researcher: I’m just going to talk about some tools and techniques that I have found in my research that maybe you use in your organisation. So, basically the cause and effect analysis can be used in identifying the root causes of disruptions and to understand why a process is not working. And you keep on asking questions until you find the root cause of it. Would you use the cause and effect analysis in your organisation and maybe give me an example of where you would use it? Such as, a missed shipment for instance.

Organisation 1: Yes again, we`d use the cause and effect for the 5 W`s, you know why? Why? Why? What keep asking until there are no more answers? Why did it go wrong? To find the errors.

64 | P a g e

Researcher: And do you think that is an effective tool to maybe try and resolve any issues that you would have?

Organisation 1: Yes but then again from a sales purpose and management purpose and how can it be fixed in the warehouse. Why is the an error? How did it happen? Why does is keep happening? Again it’s just a measurement, you measure the errors and you see how many errors there is and you see how often the error is occurring and you see how can we eliminate that error.

Researcher: Another tool, is the failure mode and effect analysis which is very similar to the cause and effect analysis except it highlights the consequences of the failures. Has your organisation ever used an FMEA analysis ever?

Organisation 1: We haven’t done it here in the warehouse, but again we have had previous employees who would do that surely. And so you look at all the possibilities what can go wrong? How would it go wrong? And if it does go wrong how can you correct each of them? Again, that would be done at a higher level as well.

Researcher: Do you think it would be useful within the organisation as its kind of like the cause and effect analysis, it finds what the problem is?

Organisation 1: Oh of course yes.

Researcher: It also kind of gives you the severity could be and opens up a lot of opportunity for correction.

Researcher: Simulation is another tool which can re-enact processes in a supply chain through simulation and you can get a virtual map of your supply chain to kind of figure out where the risks are and where they lie within a supply chain. Would you use or heard of simulation being used in your organisation?

Organisation 1: Previously it could have been used I’m not sure, again when your chasing contracts and your trying to improve a current contract you map the flow of the job and you see where the… Hei? (Hierarchy) of the risks are.

Researcher: The risk priority matrix.

Organisation 1: Yes, pre-identified risks and then try and solve the risks and then when something happens you have an answer automatically.

Researcher: Do you use a risk priority matrix in your organisation? And id so what are the risks highest on your priority list?

Organisation 1: No.

Researcher: So for instance, in your organisation you wouldn’t have risk communicated throughout the levels, highlighting key risks that you could be exposed to? In terms of severity there could be operational things that could happen quite frequently but have a very low severity

Organisation 1: Again, there discussed in weekly/monthly management meetings, where we go through each customer and you talk about performance, and depending if risk initiatives happened.

65 | P a g e

Researcher: So, there is no actual straight out procedure or a matrix within your organisation?

Organisation 1: No.

Researcher: So now that we have established that there is no risk priority matrix, what plans as such would you have in place to manage risk in your organisation? Plans are usually mitigation which is reducing the probability, or contingency which is reducing the severity. Which approach would you take in your organisation to manage risk or do you use a combination of the both?

Organisation 1: A combination of both, you have a low severity rate and then you have to mitigate against it, and you try and minimize it so that the risk is minimal.

Researcher: Can you give an example of any risks that you try to minimise or completely avoid?

Organisation 1: Good question… again I spoke a bit about the capacity of the warehouse, so a couple of months back we had too many products in the warehouse and we had shipments coming in and the volume so we tried to plan and mitigate overflowing the volume in the warehouse. Basically, we spoke to our customer made a flowchart for what they were shipping and what they were receiving and we just gave them an alternative warehouse.

Researcher: Okay, that very good. Are they any other examples with drivers for instance? Would you share risk and have discussions with your drivers or your hauliers or anything?

Organisation 1: No, again we would sub all our contracts with our drivers and we would expect them to look after that themselves you know.

Researcher: Okay well that’s brilliant that’s all my questions.

Organisation 1: Oh very good.

Researcher: Thank you very much for your time.

66 | P a g e

Bibliography1. Economic and Financial Evaluation Unit. (2015). Transport Trends: An Overview of

Ireland`s Transport Sector. Department of Transport, Tourism and Sport. Dublin: Department of Transport, Tourism and Sport.

2. Abdinnour-Helm, S. (1999). Network Design in Supply Chain Management. International Journal of Agile Management Systems, 1(2), 99-106.

3. Ahmed, A., Kayis , B., & Amornsawadatana, S. (2007). A Review of Techniques for Risk Management in Projetcs. Benchmarking: An International Journal, 14(1), 26-27.

4. Analysing the Organisational Environment. (2001). Select Knowledge Limited.

5. Armstrong & Associates, Inc. (2015, November 9). A&A`s Top 50 Global Third-Party Logistics Providers (3PLs) List. Retrieved April 8, 2016, from 3plogistics: http://www.3plogistics.com/3pl-market-info-resources/3pl-market-information/aas-top-50-global-third-party-logistics-providers-3pls-list/

6. Baluch, I., & Edwards, C. (2010). Transport Logistics: The Wheel of Commerce. Ivy House Publishing Group.

7. Bode, C., Kemmerling, R., & Wagner, S. (2013). Internal versus External Supply Chain Risks: A Risk Disclosure Analysis. In M. Essig, M. Hulsmann, E.-M. Kern, & S. Klein-Schmeink, Supply Chain Safety Management: Security and Robustness in Logistics (pp. 109-122). Springer Berlin Heidelberg.

8. BSI`s Supply Chain Risk Exposure Evaluation Network (SCREEN). (2016, March 23). BSI’s Global Supply Chain Intelligence report reveals 2015 top supply chain risks. Retrieved April 25, 2016, from BSI Group: http://www.bsigroup.com/en-GB/about-bsi/media-centre/press-releases/2016/March/BSIs-Global-Supply-Chain-Intelligence-report-reveals-2015-top-supply-chain-risks-/#.Vx4xK_krJD8

9. Cai, J.-m., Li, X.-m., & Yang, G.-h. (2011). The Risk Priority Number methodology for distribution priority of emergency logistics after earthquake disasters. Conference on Management Science and Industrial Engineering (MSIE) (pp. 560-561). Harbin: IEEE Xplore Digital Library.

10. Celikbilek, C., Erenay, B., & Suer, G. (2015). A Fuzzy Approach for a Supply Chain Network Design Problem. Proceedings of 26th Annual Production and Operations Management Society Conference, (pp. 1-10). Washington, DC, USA.

11. Chakravarty, V. (2013). Managing a Supply Chain`s Web of Risk. Strategy and Leadership, 41(2), 39-40.

12. Chartered Institute of Procurement & Supply. (2015, March 12). The top five supply chain disruptions of 2014. Retrieved April 27, 2016, from CIPS:

67 | P a g e

http://www.cips.org/en/Supply-Management/News/2015/March/The-top-five-supply-chain-disruptions-of-2014/

13. Cheng, T., & Podolsky, S. (1996). Just-In-Time Manufacturing: An Introduction. Springer Science & Business Media.

14. Cheong, M. (2003, November 3). Logistics Outsourcing and 3PL challenges. Retrieved April 3, 2016, from DSpace@MIT: https://dspace.mit.edu/bitstream/handle/1721.1/3908/IMST011.pdf

15. Christopher, M. (2011). Logistics & Supply Chain Mangement (4 ed.). Dorchester, Dorset, Great Britain: Pearson Education Limited.

16. Christopher, M. (2011). Logistics & Supply Chain Mangement (4 ed.). Dorchester, Dorset, Great Britain: Pearson Education Limited.

17. Cranfield University: School of Management. (2003). Understanding Supply Chain Risk: A Self-Assessment Workbook. Retrieved April 24, 2016, from Cranfield University School of Managmenet: http://www.som.cranfield.ac.uk/som/dinamic-content/research/lscm/downloads/60599WOR.PDF

18. Curkovic, S., Scannell, T., & Wagner, B. (2015). Managing Supply Chain Risk: Integrating with Risk Management. Boca Raton, Florida: CRC Press.

19. Department of Transport, Tourism and Sport. (2014). Annual Report 2014. Department of Transport, Tourism and Sport. Dublin: Department of Transport, Tourism and Sport.

20. Do You Know Where Your Supply Chain Is? (2015, August). Retrieved January 26, 2016, from PWC: http://www.pwc.com/us/en/risk-management/pwc-ethisphere/supply-chain.html

21. Donati, M. (2015, September 8). Tianjin Explosions' Effect on Supply Chain Could Last `Years`. Retrieved February 7, 2016, from Chartered Institute of Procurement & Supply: http://www.cips.org/en/Supply-Management/News/2015/September/Tianjin-explosions-effect-on-supply-chain-could-last-years/

22. Ecory, F. (2015, January). Fact-finding Studies in Support of the Development of an EU Strategy for Freight Transport Logistics Lot 1: Analysis of the EU Logistics Sector. Retrieved April 25, 2016, from European commission: http://ec.europa.eu/transport/themes/strategies/studies/doc/2015-01-freight-logistics-lot1-logistics-sector.pdf

23. European Union. (n.d.). The Economy. Retrieved April 25, 2016, from Europa, European Union: http://europa.eu/about-eu/facts-figures/economy/index_en.htm

24. EventWatch 2014 Annual Report. (2014). Retrieved February 17, 2016, from Resilinc: https://www.resilinc.com/products/eventwatch-2014-annual-report/

25. Expert Group on Future Skills Needs . (2015, February). Addressing the Demand for Skills in the Freight Trasnport, Distribution and Logistics Sector in Ireland 2015-

68 | P a g e

2020. Retrieved April 11, 2016, from Education.ie: https://www.education.ie/en/The-Department/Bodies-and-Committees/EGFSN_Freight_Skills.pdf

26. Garg, M. (2012). Cases on Supply Chain and Distribution Management: Issues and Principles. IGI Global.

27. Hallikas, J., Karvonen, I., Pulkkinen, U., Virolainen, V. M., & Tuominen, M. (2004). Risk Management Processes in Supplier Networks. International Journal of Production Economics, 90(1), 52-55.

28. Harland, C., Knight, L., Lamming, R., & Walker, H. (2005). Outsourcing: Assessing Risks and Benefits for Organisations, Sectors and Nations. International Journal of Operations and Production Management, 25(9), 833.

29. Harrison, A., van Hoek, R., & Skipworth, H. (2014). Logistics Management and Strategy: Competing Through The Supply Chain (5 ed.). Edinburgh, United Kingdom: Pearson Education Limited.

30. Heaney, B. (2013, May). Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service. Retrieved April 5, 2016, from GS1: http://www.gs1pl.org/images/stories/pdf/8509-ra-supply-chain-visibility.pdf

31. Hertz, S., & Alfredsson, M. (2003, February). Strategic Development of Third Party Logistics Providers. Industrial Marketing Management, 32(2), 1.

32. Irish Logistics & Transport Awards. (2016, 2015). Irish Logistics and Transport Awards Past Winners. Retrieved April 8, 2016, from Irish Logistics and Transport Awards: http://www.iltawards.ie/past-winners.php#.VweSA_krJD9

33. Kuehne and Nagel. (n.d.). KN Pharma Chain. Retrieved April 28, 2016, from Kn-portal: http://www.kn-portal.com/overland/kn_pharmachain/

34. Lee, H., Padmanabhan, V., & Whang, S. (1997, April). Information Distortion in a Supply Chain: The Bullwhip Effect. Management Science, 43(4), 546-547.

35. Lummus, R., & Alber, K. (1997). Supply Chain Management: Balancing The Supply Chain with Customer Demand. APICS Educational and Research Foundation Inc.

36. Manners-Bell, J. (2014). Supply Chain Risk: Understanding Emerging Threats to Global Supply Chains. London: Kogan Page Publishers.

37. Manuj, I., & Mentzer, J. (2008). Global Supply Chian Risk Management Strategies. International Journal of Physical Distribution & Logistics Management, 38(3), 198.

38. Min, H. (2015). The Essentials of Supply Chain Management: New Business Concepts and Applications. FT Press.

39. Mooney, C. (1997). Monte Carlo Simulation. Thousand Oaks, California, United States: Sage Publications.

69 | P a g e

40. Rao, K., & Young, R. (1994). Global Supply Chains. International Journal of Physical Distribution & Logistics Management, 24(6), 17.

41. RTE News. (2016, March 10). Irish economic growth of 7.8% tops euro zone again. Retrieved April 20, 2016, from RTE News: http://www.rte.ie/news/business/2016/0310/773899-cso-economy/

42. Rushton, A. (2007). International Logistics and Supply Chain Outsourcing: From Local to Global. London: Kogan Page Publishers.

43. Rushton, A., Croucher, P., & Baker, P. (2006). The Handbook of Logistics and Distribution Management (3 ed.). London, Great Britain: Kogan Page Limited.

44. Rushton, A., Walker, S., & Chartered Institute of Logistics and Transport UK. (2007). International Logistics and Supply Chain Outsourcing: From Local to Global. Kogan Page.

45. Saunders, M., Lewis, P., & Thornhill, A. (2012). Research Methods for Business Students (6th ed.). Essex, England: Pearson Education Limited.

46. Schlegel, G. (2005). Supply Chain Disruptions: Causes, Impacts and Mitigation Strategies. Journal of Business and Forecasting, 34(3), 4-11.

47. Schmitt, A., & Singh, M. (2009). Quantifying Supply Chain Disruption Risk using Monte Carlo and Discrete-Event Simulation. Proceedings of the 2009 Winter Simulation Conference (WSC) (pp. 1238-1247). Austin, Texas, United States: Winter Simulation Conference (WSC).

48. Selviaridis, K., & Spring, M. (2007). Third Party Logistics: a Literature Review and Research Agenda. The International Journal of Logistics Management, 18(1), 129.

49. Sheffi, Y. (2001). Supply Chain Management Under The Threat of International Terrorism. The International Journal of Logistics Management, 12(2), 1-11.

50. Shenoi, N. (2016, February 3). Resilinc Publishes 2015 EventWatch Supply Chain Disruption Annual Report. Retrieved February 17, 2016, from Resilinc: http://blog.resilinc.com/resilinc-publishes-2015-eventwatch-supply-chain-disruption-annual-report

51. Shu, T., Chen, S., Lai, K. K., Zhang, X., & Wang, S. (2014). Managing Risk of Supply Chain Diruptions. New York: Routledge.

52. Skipper, J., & Hanna, J. (2009). Minimising Supply Chain Disruption Risk Through Enhanced Flexibility. International Journal of Physical Distribution & Logistics Management, 39(5), 405.

53. Skjott-Larsen, T., Schary, P., Mikkola, J., & Kotzab, H. (2007). Managing the Global Supply Chain (3rd ed.). Copenhagen Buiness School Press.

54. Stefansson, G. (2006). Collaborative Logistics Management and the Role of Third-Party Service Providers. International Journal of Physical Distribution & Logistics Management, 36(2), 79.

70 | P a g e

55. Tianjin Explosion: China Sets Final Death Toll At 173, Ending Search For Survivors. (2015, September 12). Retrieved February 7, 2016, from The Guardian: http://www.theguardian.com/world/2015/sep/12/tianjin-explosion-china-sets-final-death-toll-at-173-ending-search-for-survivors

56. Tohomy, N. (2011, May/June). Impact of Japan`s Crisis on Supply Chains. MHD Supply Chain Solutions, 41(3), 64.

57. Tyan, J., Wang, F.-K., & Du, T. (2003). An evaluation of freight consolidation policies in global third party logistics. Omega, 31(1), 56.

58. Vakharia, A., & Yenipazarli, A. (2009). Managing Supply Chain Disruptions (Vol. 6). Now Publishers Inc.

59. Vasiliauskas, A. V., & Jakubauskas, G. (2007). Principle and benefits of third party logistics approach when managing logistics supply chain. Transport, 22(2), 68-72.

60. Wagner, S. (2009). Managing Risk and Security: The Safegaurd of Long-term Success for Logistics Service Providers (Vol. 16). Haupt Verlag.

61. Wang, M., Jie, F., & Abareshi, A. (2014). The Relationship Between Logistics Capabilities and Supply Chain Uncertainties and Risk in the Third Party Logistics: A Conceptual Framework. International Symposium on Logistics (ISL), 19, pp. 209-218. Nottingham.

62. Watanuki, M. (2015, August 21). Review of Logistics Service Regulations for Freight Forwarding Businesses: What Should Be Addressed for a Better Logistics Regulatory Framework? Retrieved April 18, 2016, from Social Science Research Network: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2649249

63. Waters, D. (2011). Supply Chain Risk Management: Vulnerability and Resilience in logistics (2nd ed.). Kogan Page Limited.

64. Waters, D., & Rinsler, S. (2014). Global Logistics: New Directions in Supply Chain Management (7th ed.). Kogan Page Limited.

65. Watson, M., Lewis, S., Cacioppi, P., & Jayaraman, J. (2012). Supply Chain Network Design: Applying Optimisation and Analytics to the Global Supply Chain. FT Press Operations.

66. Wilding, R. (2013, October). Supply Chain Temple of Resilience. Operations Management, 39(4), 1-5.

67. Wilding, R. (2013, October). Supply Chain Temple of Resilience. Operations Management, 39(4), 1-5.

68. Wilding, R. (2013, August 15). The Sources of Supply Chain Risk. Retrieved March 24, 2016, from richardwilding.info: http://www.richardwilding.info/blog/the-sources-of-supply-chain-risk

69. Win, A. (2008). The value a 4PL provider can contribute to an organisation. International Journal of Physical Distribution & Logistics Management, 38(9), 674-

71 | P a g e

677.

70. Wisner, J., Tan, K.-C., & Leong, G. (2015). Principles of Supply Chain Management: A Balanced Approach (4th ed.). Boston: Cengage Learning.

71. Yang, X. (2014). Third Party Logistics - A Comprehensive Review. Journal of Logistics Management, 3(1), 17-20.

72. Zacharia, Z., Sanders, N., & Nix, N. (2011). The Emerging Role of the Third-Party Logistics Providers (3PL) as an Orchestrator. Journal of Business Logistics, 32(1), 40-54.

72 | P a g e