MITIP 2009, 15-16 October, Bergamo
Abstract submitted to MITIP2009, stream: Supply Chain Risk Management, topic: Enterprise Risk Management
FROM RISKS SUPPLY CHAINS TO RISKS IN VIRTUAL ENTERPRISE NETWORKS:IDEAS, CONCEPTS AND A FRAMEWORK
Møreforsking Molde / Molde Research Institute Britv 4, 6411, Molde Norway E-mail: email@example.com
Is managing risks in Virtual Enterprise Networks different from managing risks in supply chains? It is not unusual for suppliers in asupply chain to come together and act as a Virtual Enterprise Network (VEN) and today’s supply chains exhibit many VEN-like features.Looking at VEN risk management from the perspective of supply chain risk management, current ideas on VENs will serve as a baseonto which ideas on supply chain risk will be transposed. Many concepts related to supply chain risk will be explored and related to theirpossible VEN counterparts: risk, vulnerability, robustness, flexibility, resilience and business continuity. Conceptual in its approach anddrawing from other areas of research, this paper introduces four distinct groups of VENS, namely Constrained, Directed, Limited andFree VEN, and concludes that VEN risk management can and should learn from supply chain risk management.
Virtual enterprise network, supply chain, risk, vulnerability, resilience.
Traditional enterprises can enter into various forms of cooperation without necessarily establishing what is called a VEN. Already more than 15 years ago the shape of today’s virtual enterprise networks began to emerge . In the late1980s the term ‘virtual corporation’ began to appear for the first time, referring to invisible or virtual links betweencompanies in the form of information and communication technology , , , . The definitions and descriptions ofvirtual enterprises vary , ranging from with the purpose of a VEN , to primarily management and structure .Others again deviate from ICT as the binding glue of a virtual corporation and focus on the organizational and co-operational characteristics of a VEN . A VEN is a time-limited structure; it has a set life-cycle., i.e. the duration of aproject or business opportunity in which the participating enterprises partake . This life cycle perspective posescertain challenges in how to manage VENs , ,  and risks in a VEN , , since the risks may change fromproject to project or opportunity to opportunity.
A VEN is a network of a number of member enterprises and their individual competencies. These two dimensions,number of members, and individual competencies or skills can be used to set up a classification scheme for VENs: In a
VEN there are only few members with few skills which the VEN has to depend on, it is therefore constrainedin its scope. A VEN with many members, but with a small collective skill set can be seen as a
VEN, because offew types of although many business opportunities it can engage in. A VEN with few members, but with a wide range ofindividual skills can be seen as a
VEN since it is highly dependent on or directed towards these members whenseeking business opportunities. The ideal or
VEN is a VEN that has many members with a wide range of collectiveskills.
Figure 1: A VEN classification scheme
Risk is an ambiguous concept and there are many definitions of risk, depending on their specific application and on theirsituational context. To understand risks in a VEN it is necessary to first look at the basics of risk and risk management, , , apply it to supply chains , , , , , , and then transfer it to VENs.