Risk Distribution Strategy: An Alternative Solution for Global Supply Chain Risk Management

Abstract

In the competitive world, the increase in global activity raises the probability of risk occurrences. It is therefore
necessary for firms to develop and implement highly effective risk management program. A systematic review of
risk management literature observed that one particular strategy in supply chain management has not been widely
discussed. This strategy is called “Risk distributionâ€. It has been widely accepted in other on related disciplines
where risk management is prevalent. The purpose of this manuscript is to explore the concept of risk distribution
strategy from an academic and business perspective in order to understand its characteristics and to investigate its
implication on supply chain management. The results indicate that risk distribution is a potential alternative risk
management strategy where focal firms can spread risk or loss to capable risk receivers. Risk distribution can be
deployed when firms have no risk management resource but need immediate action with regards to supply chain
threats. However, the strategy requires close collaboration between supply chain members in order to reduce
conflict areas.
Keywords: Risk distribution, Risk management strategy, Supply chain risk management, Systematic review.