Conflict resolution in supply chain security, 2009 (CORE1202)

Summary: The paper presents a mathematical tool for conflict resolution based on conflict modeling theories. Decision and policy making on supply chain security is sensitive to technical, political, environmental, ethical and economical aspects. What aspects are emphasized depends on whom we ask. Consequently, broadly endorsed decisions and policies require balancing between these dimensions.  The presented conflict resolution approach identifies involved decision makers, their individual and collective goals and gives options how to agree on security interventions. A case study on trade facilitation and security enforcement illuminates the approach. The article can be purchased at: http://www.inderscienceonline.com.

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Full review: Conflicts are preprogrammed in supply chain security management, because different operators such as customs, port authorities, manufacturing companies, logistics providers and financial institutes collaborate with conflicting goals. For  example, a purchasing manager can be interested in ordering products manufactured in high-risk country due to lower cost while security manager might assess risks related to the seller exceeding the potential benefits. Port operation manager aims at loading and unloading cargo swiftly and safely to and from vessels under time pressure, while port security dislikes the idea of expediting shipments at the cost of inspections. Supply chain security is a multidisciplinary issue that can be addressed efficiently only through agreeing about decision-making and policy-making mechanisms.

The paper focuses on resolution of strategic conflicts that result from the interaction of different stakeholders that collaborate with different emphases in global supply chains. The approach enables conflicting parties to focus on critical aspects of the conflict resolution process. It identifies the roles of involved decision makers, individual preferences and collective goals, underlying causes of conflict and options to achieve conflict resolution. In other words, it provides bases for cooperation and collaboration between involved parties. In addition, the paper introduces a mathematical tool for conflict resolution based on conflict modeling theories.

Decision supporting tools and port security management systems are developed in the CORE project, but they do not take into consideration possible conflicting goals in the decision-making. The CORE technologies and tools assist to mitigate identified negative threats and their consequences. However, negative effects have a threshold that must be exceeded to make different actors convinced about necessity of mitigation actions and controls. For example, estimated 0.2% annual profit loss due to possible security breach may give or not a reason to risk-profile suppliers or invest in container tracking systems. Especially when the questions are more strategic than operational the related decisions are prone to have conflicting interests. The CORE project does not try to address this problematic.

Reference: Lara Gracia, M. A., & Nof, S. Y. (2009). Conflict resolution in supply chain security. International Journal of Value Chain Management, 3(2), 168–186.

CORE1202

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