Evaluating the impacts of COVID-19 outbreak on supply chain risks by modified failure mode and effects analysis: a case study in an automotive company.

Abstract

Supply chains have been facing many disruptions due to natural and man-made disasters. Recently, the global pandemic caused by COVID-19 outbreak, has severely hit trade and investment worldwide. Companies around the world faced significant disruption in their supply chains. This study aims to explore the impacts of COVID-19 outbreak on supply chain risks (SCRs). Based on a comprehensive literature review on supply chain risk management, 70 risks are identified and listed in 7 categories including demand, supply, logistics, political, manufacturing, financial and information. Then, a modified failure mode and effects analysis (FMEA) is proposed to assess the identified SCRs, which integrates FMEA and best–worst method to provide a double effectiveness. The results demonstrate the efficiency of the proposed method, and according to the main findings, “insufficient information about demand quantities”, “shortages on supply markets”, “bullwhip effect”, “loss of key suppliers”, “transportation breakdowns”, “suppliers”, “on-time delivery”, “government restrictions”, “suppliers’ temporary closure”, “market demand change” and “single supply sourcing” are the top 10 SCRs during the COVID-19 outbreak, respectively. Finally, the practical implications are discussed and useful managerial insights are recommended.