Abstract
The issues of operational, organisational and process risk assessment in supply chains (SCs) are the most usually analysed, while other risk groups (like economic and social risks) are not taken into account, even though they have a critical effect on the competitive advantage and SCs sustainability over long time periods. The determination of risk value that may arise due to the materialisation of each defined risk factor (RF) is based on the assessment of the severity of RF consequences and frequency of RF occurrence. These judgments are obtained by decision makers and modelled by using fuzzy set theory. The relative importance of RFs are stated by fuzzy pair-wise comparison matrices in compliance with fuzzy analytical hierarchy process (FAHP). The risk level of SCs could be obtained in an exact way by applying fuzzy logic. The proposed model, to be presented in this paper, provides a possibility to easily and simply determine risk level from the automotive industry SC and to propose appropriate management initiatives that should lead to a reduction or elimination of RF influence.
Highlights
Nowadays, effective management of supply chains (SCs) is becoming a critical issue for companies that want to remain competitive and to become leaders in a modern market environment
Respecting the priorities of risk factor (RF), appropriate management initiatives are perceived by decision makers
The SC is exposed to RF market share reduction risk (i 1⁄4 3) (Christopher & Lee, 2004), i.e., it is possible to miss out business opportunities that may exist in a turbulent market
Summary
Effective management of supply chains (SCs) is becoming a critical issue for companies that want to remain competitive and to become leaders in a modern market environment. SC management is influenced by many different external and internal risk factors (RFs). The impact of these RFs has led to the fact that SCs and governments are more vulnerable, so that there is growing interest for the supply chain risk management domain. Chain risk management should be defined as the process of planning, organising, leading and controlling the activities of the organisation in order to reduce the effects of risk on the values of performance by which the effectiveness of an enterprises activities is measured (Stulz, 1996).
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