Risk management in supply chains: Information exchange, systemic motives and cognitive barriers

Supply chain disruptions are a critical issue for many companies. Supply chain complexity and disintegration are emerging as one of the major challenges to supply chain risk management. The ability to identify risks has decreased as the control of supply chain operations have fallen to the hands of outside service providers. For risk management to work properly, supply chain actors need to co-operate and share information. In this paper we assess information exchange and its risks in a supply chain between the Baltic States and Finland. This is done by presenting information exchange methods and the risks involved as seen by the practitioners in the field. The case is then analyzed from the viewpoint of cognitive barriers and systemic motives which affect information exchange in the supply chain. The study is based on state-of-the-art literature as well as empirical findings from interviews conducted. The paper defines supply chain as a systemic construct, which incorporates actors, whose visibility and control over the supply chain is constrained by internal organizational factors and cognitive barriers. Further, risk management practices are dependent upon contingent factors that drive changes in supply chains.