ABSTRACT
Introduction Numerous approaches have been considered as ways to reduce supply risk. For example, there has been extensive research on the implementation of buffers such as inventory management (Lee et al, 1997; Starr and Miller, 1962) and the use of multiple supply sources (Anupindi and Akella, 1993; Newman, 1989; Tullous and Utecht, 1992) in response to supply risk (Christopher, 2002). These buffers are expensive and often serve only as a temporary solution for reducing the effects that supply risk manifestation has on purchasing firms. Another method that purchasing organizations can use to manage supply risk is focusing organizational resources on reducing the probability that risk events occur. In this Chapter, we will present a case study that illustrates how Early Supplier Involvement (ESI) can be used to reduce the probability and effect of an adverse supply incident for new products.This Chapter will begin with an introduction to ESI, to include its benefits and drawbacks. Next, ESI will be discussed with regard to how it facilitates supply risk management. Managerial implications and conclusions are then presented.
