Introduction Supply chain operations, their management and the incidence or risk are not new phenomena, although they may have taken on a new level of significance. The reality of the supply chain has a long and important history, as any form o f bartering or exchange of goods, would represent a supply chain in its simplest form. Medieval communities and economies were developed around such simple models of the supply chain, typically operating in a localised marketplace. Presumably many o f the structures, processes and systems evident in today’s supply chains were in existence then, albeit in a rudimentary form. This text addresses these issues in the context of present day supply chains and more specifically the uncertainties and risks that pervade supply chains and the effectiveness of managing these.There are a number of developments which have caused primary stakeholders such as organizations, markets, consumers and governments to address supply chain issues and their management with increasing urgency. Three key developments illustrate the nature and scale of the impact and the consequential responses of these stakeholders: 1. Information and Communication Technology (ICT) developments have revolutionized the availability and exchange of information between all stakeholders in the supply chain. Consequently, competitive advantage has become more short-lived as entry barriers and niche markets have rapidly been eroded, through increased information and knowledge to all stakeholders.2. ICTs have facilitated the development of global competition, impinging on almost every marketplace and organization size (Ritchie and Brindley, 2000). Product markets as well as service markets have been affected. Arguably services are more amenable to on-line delivery, although the impact o f online promotional, ordering and payment systems for products has revolutionized many areas o f retailing. It should be recognized that this enhancement of global competition has required many other developments (e.g. government policies and actions to reduce trade barriers) in addition to ICT innovations.3. Interactions and relationships within the supply chains themselves have
resulted both as a consequence of ICT developments and the increasing competition in the marketplace. The supply chain itself has now become a significant weapon in the competitive arsenal, capable of delivering reduced costs, higher quality, faster and more reliable delivery and other dimensions of added value to the consumer. Such changes have the capacity to enhance the performance of the individual members in the supply chain and the supply chain membership as a whole. The consequences of these three primary developments and the associated responses of members of the supply chain and indeed, parallel competitive supply chains clearly signal a potential increase in both uncertainty and risk. Added to this rapidly changing context is the increasing complexity of structures, strategies and systems emerging in response to the new competitive challenges. These provide further sources of uncertainty and risk. It is important to note that the identified sources of uncertainty and risk pervade every stage in the supply chain and not just the final stage of the product/service delivery to the consumer. In essence, the aims of this text are: the examination of the issues of increasing uncertainty and risk in the context of the supply chain, investigation of the sources and reasons for the increase, assessment o f the potential approaches to managing such risks and the evaluation of the consequences for the performance o f the individual member organization and the supply chain as a whole.Risk management within supply chains is one of the most significant challenges facing every organization by virtue of the fact that all organizations are a member of at least one and more probably, multiple supply chains. There is an absence of research and texts on the specific dimension of risk management in supply chains, although many studies on supply chain management in generalmake reference to the issue. The authors contributing to this text are all actively researching different dimensions of the risk management phenomenon which reflect the multi-functional and multi-disciplinary nature of the issues involved. The collection of papers seeks to provide the initial platform for further research and development in this field. The authors recognize that as with any emerging field of study there is a need for improving the clarity of definitions, frameworks and models etc. and would see this text as providing the basis for this.This introductory chapter seeks to establish some of the key definitions employed throughout the text, whilst recognizing that particular papers may explore these in greater depth. Initially, we seek to define the terms Supply Chain and Supply Chain Management. Secondly, a working definition of the terms Uncertainty and Risk are developed and their association with risk management in the supply chain context is outlined. The term risk is then integrated within the definition o f business performance to establish the need to balance risk, effectiveness and profitability. This provides the basis for the discussion on metrics later in the chapter. Finally, some of the key strategies and tactics within risk management are identified and reference is made to where these are developed further in later chapters.