Research Paper

Supply Chain Risk Management

Submitted by:

Raghav Gundra

Susmitha Kadiyala

Jeevan Alla

Suresh Kumar Bolugoddu

Nagireddy Venkata Sai Vivekananda

Submission date: 07/22/2018

University of Cumberland’s

Abstract: Supply chain risk management is very useful in identifying and monitoring the threats to supply chain continuity and profitability. Threats include drastic change in cost, shortage of materials and financial issues of suppliers and natural disasters. Supply chain risk management reduces the vulnerability by involving stake holders, which will in turn identify and analyze the risk via holistic approach. Supply chain risk management implements the strategies for identifying as well analyzing the risks in a supply chain. There have been a lot of practices for get rid of Risk in supply chain, By automating the process involved in supplier risk management for collecting and managing the supplier information, need to include supplier performance during analysis of analysis of financial issues, Need to use the technologies for early identification of problem, should use software’s for e sourcing and purchase to pay contract management, finally should provide dashboards for tracking the reports on supply risk metrics. The main motive behind this is to avoiding the risks which will be occurred to an organization, strategies for early detection of risks and finally counter parts which are needed for risk free supply chain management; all these are achieved by coordinating and communicating with the stockholders of an organization.

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As indicated by an examination led by PwC and the Business Continuity Institute in 2013, 75% of organizations involvement greater part of the disturbances were caused by supply-related issues. With an expanding accentuation on upstream hazard, chance administration in provider determination has turned into a basic issue looked by organizations. Albeit past examinations proposed diverse techniques and apparatuses for compelling and proficient provider choice, just couple of methodologies have endeavored to join hazard relief systems in provider determination choices. Our examination means to fill this hole by considering an extensive variety of quantitative and subjective hazard factors in provider determination and assesses the viability of elective hazard moderation techniques in this specific situation. Also, we propose that both upstream and downstream techniques ought to be used at the same time as opposed to depending on a solitary sort of procedure. We additionally recommend that it is basic to adjust upstream and downstream hazard moderation systems to lessen chance.

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Supply chain risk propagation is a cascading effect of risks on global supply chain networks. The paper attempts to measure the behavior of risks following the assessment of supply chain risk propagation. Bayesian network theory is used to analyze the multi-echelon network faced with simultaneous disruptions. The ripple effect of node disruption is evaluated using metrics like fragility, service level, inventory cost and lost sales. Developed risk exposure and resilience indices support in assessing the vulnerability and adaptability of each node in the supply chain network.

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Supply chain managers across the globe are finding it difficult to manage the increasingly complex supply chains despite adopting a variety of risk mitigation strategies. Firms on the other hand have also been adopting various kinds of environmental and social sustainability practices in recent times to reduce carbon footprint and improve their image on the social front. However, very few studies in the extant literature have examined the impact of sustainability practices on supply chain risk. We address this important gap in literature by empirically testing this relationship, using primary data from six manufacturing sectors and 21 different countries including developed as well as emerging markets across the globe. Our findings indicate that risk mitigation strategies do not always reduce the actual supply chain risk experienced by firms, whereas sustainability efforts help reduce supply chain risk, especially in emerging market contexts.

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Managing supply chain cash flow risk has become a crucial task for many cash-stressed businesses. Cash flows usually lag behind operating earnings and exhibit higher volatility than earnings, making them less predictable. Through the three components of the cash conversion cycle – days in inventory, receivables, and payables, this study investigates the impact of cost structure – cost ratios and cost compositions – on cash flow risk (standard deviation) and explains why and how management philosophies, such as Just-In-Time, and new production technologies, such as 3D printing, can lower cash flow risk by shortening days in inventory and shifting cost structure. An analytical model built on a simple demand process examines the basic relationship between cost structure and cash flow risk while a simulation approach studies the same relationship under a more general demand process with additional modelling considerations and a benchmark test.

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Behind every product and service is a supply chain. These supply chains are extremely complex and vulnerable to multifarious risks that threaten their performance and stability, ranging from simple machine or truck breakdowns to catastrophic natural disasters. This paper presents a novel framework for supply chain risk management based on the analogy of the biological immune system, which has multiple layers of increasing sophistication to neutralize a variety of risks. The various layers include: physical barriers, innate response, and adaptive response.

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Concerning the increasing emphasis on risk management in this uncertain global environment, there is an urgent demand for practical decision support tools that support supply chain risk communication and management. This research proposes an integrated framework that takes explicit account of multiple types of risk in aiding decision-making, and compares and ranks alternative risk mitigation strategies individually and collectively in indicator basis using fuzzy set theory and multiple criteria decision analysis methods. Through an illustrative case, the research demonstrates that the proposed framework provides a holistic view of supply chain risks and enables firms to foresee, spot and respond to the exposed risks in an effective and efficient manner.

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Supply chain managers and scholars recognize the importance of managing supply chain risk, especially in fresh food supply chain due to the perishable nature and short life cycle of products. Supply chain risk management consists of supply chain risk assessment, risk evaluation and formulation and implementation of effective risk response strategies. The commonly adopted qualitative methods such as risk assessment matrix to determine the level of risk have limitations. This paper proposes a hybrid model comprising both fuzzy logic (FL) and hierarchical holographic modelling (HHM) techniques where risk is first identified by the HHM method and then assessed using both qualitative risk assessment model (named risk filtering, ranking and management Framework) and fuzzy-based risk assessment method (named FL approach). The risk assessment results by the two different approaches are compared, and the overall risk level of each risk is calculated using the Root Mean Square calculation before identifying response strategies. This novel approach takes advantage of the benefits of both techniques and offsets their drawbacks in certain aspects.

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The purpose of this paper is to determine the main security threats in supply chains, to understand gaps in today’s supply chain management strategies and to make recommendations to enhance security in the context of supply chain management. Previous research lacks comprehensive studies and recommendations about how supply chain manager’s deal with security issues in line with the business visions and strategies of their companies. The study methodology is based on an exploratory approach. Data were collected from 20 managers from international companies by means of self-administered surveys, one-to-one interviews and group interviews. Study findings point out risk management as an important tool at the disposal of managers for trading off performance and vulnerability.

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The approach of this research is to demonstrate that cooperation among business networks brings the opportunity to handle risks and events much more effectively and efficiently than an individual organization. This research has attempted to investigate the potential risks and events and to handle them effectively and efficiently. The aim of this paper is to deal with the importance of identification and management of a risk and an abnormal situation (event) within a business network that demands for higher level of attention in order to execute a business network successfully. This paper outlines the general structure of the risk and event management process and presents a collaborative methodology or framework for risk and event management in a complex non-hierarchical networked business environment.

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The downstream supply chain efficiently distributes a company’s products or services to its customers. All contracted suppliers, both upstream and downstream, must be proactively managed to minimize financial, confidentiality, operational, reputational and legal risks.

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How a supply chain (SC) is configured can have a significant impact on the performance of global firms. More specifically, disturbance factors (i.e. those factors associated with uncertainty and risk) are increasingly important considerations. This paper focuses on endogenous, exogenous and environment-related SC disturbance factors and their relative importance when configuring global SCs. Three alternative scenarios of SC configurations for European-based pharmaceutical firms are identified – insource nearshore, outsource nearshore and outsource offshore.

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This paper reviews the supply chain risk management (SCRM) literature to identify as well as to discuss and elaborate on the impact and origin of major supply chain risk factors in an Indian context. Through a combination of existing literature and a survey instrument, we identify major SCRM issues including underlying supply chain risks and thereafter identify gaps, issues and opportunities for further research. SCRM has become a popular research topic, in part owing to increased globalization of business. Moreover competitive factors such as shorter product life cycles, technological innovations and changing government policies have brought this topic more sharply into focus.

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The objective of this research was to develop a decision support framework (DSF) to assess quantitative risk in multimodal green logistics. This risk assessment is the combination of a number of models, the failure mode and effects analysis, the risk contour plot, the quantitative risk assessment, the analytic hierarchy process and the data envelopment analysis which can support a user to perform risk assessment in various decisions. The contribution of this research is that the risk assessment model can generate an optimal green logistics route in accordance with weight from the user. The highlight of this DSF is that the quantitative assessment model can reduce bias on risk assessment of logistics route. An in-depth case study, recommendations, limitations and further research are also provided.

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This paper investigates how different reasons for supply chain glitches influence shareholder wealth. Prior research indicated that supply chain glitches can decrease shareholder wealth by a staggering 10.28%. We argue that the reason for the supply chain glitch is an important moderator for understanding how supply chain glitches affect shareholder wealth. In this paper we re-assess the effect of supply chain glitches on shareholder wealth for a new time period (i.e. 2001–2012) whilst including the moderators from the original study (growth prospects, firm size, debt-equity ratio and timing) and adding the reason for the supply chain glitch as an important new moderator.

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With increasing geographical proximity within supply chain networks, the development of decision models for ordering materials from co-located cluster suppliers under the broad rubric of risk management in supply chains becomes an important problem given that geographic-specific regional failure with its associated loss is inevitable. This paper proposes a model that optimizes the supplier order allocation of demand among clusters under supply failure risks. The total purchase costs are formulated with supplier maintenance costs, item purchase costs, and the losses incurred due to three types of events in a level of generalization.

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Operational disruptions impact a supply chain’s ability to match supply and demand. To remain competitive, supply chains need to be resilient and thus capable of rapidly and effectively recovering from operational disruptions. Supply chain resilience is inherently multidimensional, as it spans across multiple tiers, and thus is difficult to quantify. Extant research has measured the transient response through a single-dimension or single-organization as a proxy for operational resilience

Rangel, D.A., Taiane Kamel de, O., & Maria Silene , A. (2015). Supply chain risk classification (pp. 6868-688). International Journal of Production Research 53:22

The supply chain management philosophy has often been used by organizations to achieve a competitive advantage, but it increases the vulnerability of these supply chains (SC) to certain risks. This dialogue between competitive advantage and risk generation has increased the number of studies related to the topic of ‘supply chain risk management’. Aiming to contribute to this field of research, a literature survey was conducted on 16 risk classifications, which included 56 risk types. These risk types were sorted according to existing conceptual similarities and then related to the five management processes intrinsic in a functional SC (plan, source, make, deliver and return), which are mainly advocated by the supply chain operations reference model.

Paula. S.C., Luiz Felipe, S, & Katja, K. (2015). Supply chain risk: empirical research in the automotive industry. Journal of Risk Research 18:9.

The supply chain management philosophy has often been used by organizations to achieve a competitive advantage, but it increases the vulnerability of these supply chains (SC) to certain risks. This dialogue between competitive advantage and risk generation has increased the number of studies related to the topic of ‘supply chain risk management’. Aiming to contribute to this field of research, a literature survey was conducted on 16 risk classifications, which included 56 risk types.

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Risk management plays a vital role in effectively operating supply chains in the presence of a variety of uncertainties. Over the years, many researchers have focused on supply chain risk management (SCRM) by contributing in the areas of defining, operationalizing and mitigating risks. In this paper, we review and synthesize the extant literature in SCRM in the past decade in a comprehensive manner. The purpose of this paper is threefold. First, we present and categories SCRM research appearing between 2003 and 2013. Second, we undertake a detailed review associated with research developments in supply chain risk definitions, risk types, risk factors and risk management/mitigation strategies. Third, we analyses the SCRM literature in exploring potential gaps.

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While previous published studies have evaluated the drivers of supply disruptions, only a few have empirically investigated the role of manufacturing postponement enablers as mitigating practices. This work explores the complex interaction between supply disruptions (i.e. supplier failure, purchase unavailability), risk conditions (i.e. antecedents that positively influence the probability and severity of supply disruptions) and manufacturing postponement enablers (i.e. product and process modularity). Specifically, we aim at understanding ‘when’ manufacturing postponement enablers should be adopted the most and ‘if’ their adoption can fully mitigate the effect risk conditions exert on supply disruptions’ probability and severity. To achieve our objective, we developed a conceptual model, and we tested it using survey data from 54 Italian manufacturing companies. The results show that supply market difficulty and technological uncertainty imply a higher probability and severity of disruptions associated with supplier failure and purchase unavailability.

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David .G, Ghobadian. A., & He, Q. (2015). The mediating effect of environmental and ethical behaviour on supply chain partnership decisions and management appreciation of supplier partnership risks (pp. 6455-647). International Journal of Production Research 53:21.

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Wafik. H & Elmsalmi .M. (2014). An integrated approach based-structural modelling for risk prioritization in supply network management (pp. 1301-132). Journal of Risk Research 17:10.

Olivier.L, Gunasegaram, A., & Spalanzani. A. (2014). Effect of firm characteristics, supplier relationships and techniques used on Supply Chain Risk Management (pp. 3381-340). International Journal of Production Research 52:11.

Hatem.E, Hachicha. W & Chabchoub.H. (2014). Description and application to a real hospital pharmaceutical case study. A combined approach for supply chain risk management (pp. 641-66). Journal of Risk Research 17:5.

Jury, G., & Kalchschmidt, M. (2014). A model to evaluate upstream vulnerability (pp. 249-26). International Journal of Logistics Research and Applications 17:3.

Arijit, B., Geraghty, J., Young, P., &, B. (2013). Design of a resilient shock absorber for disrupted supply chain networks: a shock-dampening fortification framework for mitigating excursion events (pp. 721-74). Production Planning & Control 24:8-9.

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