Proactive risk management approach in reducing the agricultural supply chain risks

Abstract

Purpose- The purpose of this study is to provide a model that analyzes the risk factors encountered by the agriculture industry, which is an essential part of the global economy, during supply chain activities. Methodology – In this study, a systematic risk management model (Australia and New Zealand Standard AS / NZS 4360: 2004) is proposed to manage the risks that may arise in the agricultural supply chain. The proposed model was applied in a multinational company operating in the agricultural sector and road map has been developed which allows them to monitor and manage the supply chain risks of the company systematically. Within this scope; the risks in an organization, which may lead to business interruption and losses for agriculture companies, risk matrix method has been used in order to examine their probability and effects of their consequences. Findings- Within the scope of the study, identified risks were analyzed under six categories; namely environmental risk, supply risk, operational risk, political risk, organizational risk and financial risk. Based on the findings of the study, it is determined that eight risks most important, seven risks moderately important and six risks less important than other risks. Conclusion- At the end of the analysis, it was concluded that, product quality, storage conditions, supply, climatic instability and commercial restrictions that limit or cause inhibition of competition in the foreign markets had critical importance in agricultural supply chain management.