Supply chain risk assessment in pharmaceutical industries: an empirical approach

Abstract

Supply chain risks are one of the significant hurdles faced by the organisations in achieving operational excellence. The purpose of this study is to assess the supply chain risks in the pharmaceutical industries and their influence on supply chain operational performance (SCOP). Through extent literature review, we have identified 44 items which are classified under five constructs consisting of supplier risk (SR), production risk (PR), demand risk (DR), infrastructure risk (IR) and macro risk (MR). Using these constructs, a structured questionnaire has been developed. An online survey was conducted in the pharmaceutical industries yielding a response rate of 66.20%. To validate the hypotheses between these constructs and SCOP, we used Structural equation modelling (SEM). From the SEM result expect demand risks, all other threats have the negative relationship with SCOP (i.e., the higher the chances, the lower the SCOP).Further, to rank the organisation based on their SCOP, we proposed a supply chain risk assessment index (SCRAI) based on the ratings obtained from the experts using Fuzzy techniques. From these results, it is clear that SCRAI is essential for evaluating the organisation's efficiency on supply chain operations.