Introduction

Over the course of the 1990s, the once-neglected area of the supply chain has become a critical management issue that has led to the massive increase in investment seen in enterprise resource planning (ERP) systems seen in many industries over the last five years. Many organizations have analysed the process of moving goods between points to meet a level of customer service, and realized the scope to speed up product movement, cut costs, and remove waste and efficiency latent in the supply chain. As the case studies below demonstrate, operational risk management has an important role to play in facilitating supply chain efficiency and improving service delivery to the customer.

Rising interest in supply chain management partly reflects the changing structure of economies and markets. In countries such as the US and the UK, energies that were once put into manufacturing products are being displaced into the supply chain. For example, in the UK, manufacturing has long been in decline, leading businesses to export from overseas. Similarly, the expansion of, and removal of, barriers to markets around the world has given businesses more choice in sourcing supplies. These trends have necessitated a process of integration between, say, manufacturers and retailers, allowing businesses to achieve greater economies of scale, concentrate purchasing power and control prices, cut costs and improve the quality of customer service. Once restricted to economies such as the US and Japan, this process is now being repeated in the pan-European context, as markets there become...