Inter-relationship among risk taking propensity, supply chain security practices, and supply chain disruption occurrence

Abstract

Supply chain disruptions often led to declining sales, cost increases, and service failures for the company. Considering the profound impact of supply chain disruptions on business survivals, there is a need for formulating business initiatives that will make the company's supply chain network more resilient in the presence of risk and uncertainty. This paper sheds light on the inter-relationships among risk propensity, supply chain security practices, and disruption occurrence so that it can help the company figure out what it takes to overcome the company's vulnerability to supply chain risks and then gain competitive advantages over its rivals by better preparing for potential supply chain disruptions. This paper attempts to identify factors affecting the firm's risk behaviors and supply chain security practices based on the questionnaire survey of supply chain professionals. The finding indicates that firms which take the risk of supply chain disruption seriously are more likely to comply with security initiatives and build safety stocks and subsequently reduce the frequency of supply chain disruption occurrence.