Analysis of Risk Factors in an Indirect Distribution Channel

Abstract

Purpose: The article aims to present an analysis of risk factors in an indirect distribution channel. Design/Methodology/Approach: The research methodology used are indicators that enable the analysis of risk factors in the distribution channel. The results obtained by the FMEA method enabled the use of the preventive mechanisms method in the enterprise. The purpose of using the FMEA method is to characterize the most dangerous risk factors in the surveyed entities, which will be most felt by the organization in enterprises. Findings: Numerous risk factors can arise in a network of indirect distribution channels. The applied FMEA method identified which risk factors are the most dangerous for the organization regarding probability, detectability, and significance of the risk factor. The results obtained from the FMEA method made it possible to develop preventive mechanisms for the examined company and thus reduce the possibility of risk factors. Practical Implications: Over time, new risk factors may appear, so you should constantly monitor and analyze disturbances using the FMEA method that allows you to manage risk factors. Enterprises that are part of an indirect distribution channel should develop preventive mechanisms to ensure an efficiently functioning organization. Originality/value: The studies showed that the magnitude of the effect and the probability of risk factors depend on the first activity performed in the distribution network up to the last link of the supply chain. It is also influenced by the continuity of the consequences of a given occurrence of a risk factor. The obtained data is the basis for risk management for distribution entities.