Bagging grey swans: A supply network approach to identifying and managing low-probability high-impact supply chain events

Over the past decade practitioners and researchers have become increasingly focused on managing risks in extended supply chains. Whether these risks involve supply disruptions, financial liabilities for a supplier’s actions, or large market shifts; Grey Swan events, defined as unforeseen low-probability high-impact events, have the capacity to severely damage or create opportunities for a firm as well as its trading partners. Using two network parameters, density and centralization, and four examples we develop a typology to help SC managers identify grey swan events and then position a firm in the network for survival and possibly new opportunities.