Risk management in the era of SCM 5.0

Abstract

Industry 5.0 represents a further development of the paradigm of the Fourth Industrial Revolution, introducing a broader and fundamentally different set of challenges for actors in the business environment. In the digital era – where virtually all processes are increasingly embedded in or mediated through virtual environments – it is of fundamental importance that humans, as the central actors in organizational processes, retain their supervisory and decision-making roles in value creation activities. However, these developments also generate new categories of risks for organizations which, in the absence of an appropriate risk management system, may adversely affect corporate operations and strategic performance. The objective of this paper is to explore the novel categories of risk factors that have emerged as a consequence of the growing prominence of Industry 5.0. Following a comprehensive review of the relevant literature, the research identifies the specific risks characterizing contemporary supply chains. Subsequently, the identified risk factors are ranked through the development of a risk matrix, which serves as the foundation for establishing a risk management framework aimed at supporting more effective risk identification, prioritization, and mitigation within Industry 5.0-oriented supply chains.