Sources of Uncertainty and Risk Quantification Methods in Supply Chain Management: A Literature Study

Modern supply chain networks operate in an increasingly unstable business and geopolitical environment alike. Nowadays, supply chains are not only threatened by traditional sources of uncertainty that are related to the geographically dispersed nature of their operations but also by new sources of uncertainty that arise from the geopolitical unrest caused by Russia’s invasion of Ukraine, climate change, and an unstable economic environment that is further deteriorated by the increase in oil prices and food commodity prices. Furthermore, pandemics such as coronavirus cause panic buying and pose a serious threat not only to global health but also to supply chain networks around the world, forcing businesses to reassess their business model. At the same time, we witness an escalated trade war in the form of tariffs and import quotas between USA and China. But, while numerous studies have explored some of the aforementioned challenges, what is missing from the current literature is a systematic and holistic approach to understand and mitigate the uncertainties that are caused by an unstable business and geopolitical environment. This study covers this gap by providing a literature study that intends to examine the various challenges that are facing the modern supply chain networks in an integrated way.