The flow-based society and its vulnerability

This report presents a meticulous review of the background of today’s flow-based society and its vulnerability. Furthermore, there is a discussion about how to define flow-based disruption risks, and how their consequences, including the domino effects, can be described. Also the theory areas, addressing this kind of risks, are treated in this report.
The modern society of today is, to a great extent, built up round supply chains. In these strictly integrated chains, with a number of often globally dispersed links, there is a constant flow of physical goods, services and also combinations of goods and services. A disruption within any of these flows may very well lead to far-reaching negative consequences, not only for the private company but also for the society in general.
The private company’s (or organization’s) supply chain and its surrounding environment is exposed to constant changes, which affects its risk picture. It may be difficult to completely avoid being affected by disruptions and disturbances, and perhaps not even desirable, considering the high risk handling costs this probably would require. On the other hand, it is important not to be affected unnecessarily hard, since this of course means a waste of resources. In competitive business activities it is especially important not to suffer worse than the competitors; preferably you should be less affected. Efficient risk management can thus provide a vital competitive advantage.