A Fuzzy-Based Holistic Approach for Supply Chain Risk Assessment and Aggregation Considering Risk Interdependencies

Alina Díaz-Curbelo,Alfonso Redondo,Ángel M Gento,Faisal Aqlan

doi:10.3390/app9245329

Alina Díaz-Curbelo, Alfonso Redondo + Show 2 more

Open Access

https://doi.org/10.3390/app9245329

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Abstract

Supply chain risk management requires dealing with uncertainty, interrelations, and subjectivity inherent in the risk assessment process. This paper proposes a holistic approach for risk management that considers the impact on multiple performance objectives, the relation between risk agents, and the risk event interdependencies. An aggregated risk score is proposed to capture the cascading effects of common risk triggers and quantify the aggregated score by risk agent and objective. The approach also uses fuzzy logic to allow for the treatment of vague and ambiguity data as input parameters to the model from different domains and scales, according to knowledge and criteria nature. The integration of the balanced scorecard tool improves the analysis and prioritization of mitigation strategies in decision-making, both by risk agent and by strategic objective. A case study of a telecommunication company is presented to illustrate the applicability of the proposed approach.

Highlights

Management is a very important factor for business success and is defined as the process of measuring and analyzing what happened in order to make decisions/actions
Several quantitative/qualitative tools and techniques have already been developed for supply chain risk management (SCRM), there is a limited focus on introducing holistic frameworks that integrate all stages of the risk management (RM) process and consider prior analysis of supply chains (SCs) processes and strategic management focus
The methodology presented in this study shows a step-by-step guide that makes it easy for managers and decision-makers to develop each of the stages of the proposed holistic framework for conducting an aggregate risk assessment

Summary

Introduction

Management is a very important factor for business success and is defined as the process of measuring and analyzing what happened in order to make decisions/actions. To manage is to pilot the company and align all the resources and actions towards the strategy marked by the direction [1]. The management of risks in operations and supply chains (SCs) has emerged as one of the main research topics in the recent operations and supply chain management (SCM) literature [2,3,4]. SCs are increasingly prone to complexity and uncertainty. Factors such as reduction of supply base, globalization, shortened product life cycles, and capacity limitation of key components increase SC risks [5]

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