International trade has become a necessity in many supply chains. Global markets present
opportunities for growth. Global suppliers often produce products less expensively than
it can be produced domestically, supplement domestic production capacity when demand
outstrips supply, or produce product when it is out of season in other countries (Roth
et al., 2008). Supply chains have become more vulnerable as a result of increasing
complexity due to globalization and the culture of lean management that prove to be the
major reasons behind supply chain risks (Wagner and Bode, 2006; and Thun and Hoenig,
2011). Moreover, the variety of organizations involved in managing supply chains, such
as suppliers, manufacturers, retailers, logistics service providers, infrastructure providers
like port authorities, and national and international governmental institutions contribute
to the complexity and vulnerability of supply chains (Ritter et al., 2007).
Criminal attacks, natural calamities and numerous other events in the past have sensitized
the issue of supply chain security, more so if the supply chain is global in nature. The terror
attacks of 9/11 on in New York and Virginia were responsible for over $33 bn in property
losses and approximately 3,000 human casualties (Lisanti, 2001; and Bram et al., 2002).
Other events such as the north-eastern US power grid failure have been economically
detrimental incidents (Yuill, 2004), and the worldwide spread of several major computer viruses and worms (Brandl, 2005) have also disrupted many companies’ ability to do
business (Hulme, 2004). Further events like the San Francisco port lockout, Hurricane
Mitch and SARS have dramatized the vulnerability of the global supply chain (Closs and
McGarrell, 2004).
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