Western European companies in the textile sector can compete in a global economy from a low labour cost market; by making the demand chain more robust and resilient and creating a risk management culture with an agile demand chain; design and innovation-led and collaborated. Several hidden risks are generated by outsourcing and offshore manufacturing; of which increased logistic costs and delays; natural disasters; transport disruptions; increased levels of inventory and increased lead times are only a few. These types of risks can; for example; cause product obsolescence (Christopher and Peck ; 2004).
The Spanish apparel retailer Zara has been able to reduce the lead time from design to store down to two weeks. By outsourcing the manufacturing processes to workshops within Europe; the company ensures flexibility and closeness to customers as well as minimizing the risks. To adapt to demand; clothes are procured in four different neutral tones that can be dyed in the last minute. This makes the supply chain extremely responsive; flexible and costefficient (Walters; 2006).
The development and change of a supply chain is related to a number of decisions; out of which several may be short of basic data and serve to increase the level of uncertainty. The present study aims to provide a basis for making such decisions. By visualizing the most obvious risks involved in the interface between the focal company and its suppliers and customers; measures for risks can be implemented from a demand chain perspective. The purpose is also to visualize risks for further assessment in a future parallel demand chain.
Keywords: Risk management; supply chain; demand; fast fashion