The modern supply chain is long, complex, interconnected and global, and plays a fundamental role in business competitiveness. These conditions, along with various supply chain management trends in recent years have increased risks in supply chains which threaten supply chain performance. Greater impact, especially on cost, from an increased threat of supply disruptions is one area of particular concern. Companies today are struggling to find effective means to manage this increased risk and avoid adverse financial impacts. An approach to managing supply disruption risk in supply chains based on the minimization of the total cost of ownership (TCO) of the supply chain is explored in this thesis. Insights are provided into an appropriate view of supply chain risk and a general four step risk management process to guide the design and evaluation of a new risk management tool based on such an approach. A prototype of the new total cost-based, modeling and simulation tool was created in partnership with ProModel Corporation and a government contractor that requested to remain anonymous. A preliminary assessment of the effectiveness of this tool in minimizing TCO and providing an interface useable by non-modelers is provided. This study also reviews and compares a sample set of current supply chain risk management methods and tools and compares them with the new tool for relevance in aiding users in managing supply disruption risk. Based on literature findings and preliminary feedback from pilot contextual demonstrations of the tool, the total cost approach to risk modeling appears promising, although the execution needs to be improved with further enhancements made to the prototype tool. In this preliminary study and evaluation, sufficient evidence is not available to determine that the new prototype tool is any more effective than other currently available risk management tools to provide necessary information to make supply chain risk management decisions that minimize TCO of a supply chain. Suggestions for further development of the tool, especially for improvement of the total cost approach, are provided as well as a preliminary evaluation procedure and survey instruments for a more robust evaluation of the new tool.
College and Department
Ira A. Fulton College of Engineering and Technology; Technology
BYU ScholarsArchive Citation
Saunders, Brian J., "A Total Cost Approach to Supply Chain Risk Modeling" (2011). All Theses and Dissertations. 3179.
Brian Jeffery Saunders, disruption risk, risk management, risk mitigation, risk modeling, supply chain management, SCM, supply chain risk, supply chain risk management, SCRM, supplier disruption risk, supply disruption risk, total cost, total cost of ownership, TCO