Supply chain risk management in the Indian manufacturing context: a conceptual framework

Abstract

Due to emergence of global business environment, short product life cycles, technological innovations, natural disasters and ever changing government policies, industries face various types of risk in their supply chains. To overcome the increased risks raised by the above factors in the supply chain, organisations need to establish the principles of supply chain risk management (SCRM) for serving customers by finding right suppliers and fostering the trust among the supply chain partners. This study proposes that by following the strategies such as risk plan, risk financing, risk monitoring, risk avoidance, risk transfer and risk sharing, the supply chain can be enhanced by reducing the impact of risk on supply chain. This study supposes that the supply chain partners (entities) need to share information transparently across the supply chain to enhance the visibility of the supply chain. Without sharing information across the supply chain, alleviation of the impact of the risk and sustaining long lasting relationship among the trading partners is a difficult task. This study attempts to identify the critical dimensions of SCRM and it develops a conceptual framework to understand the relationship between risk and performance measures from the perspective of the manufacturers which includes original equipment manufacturers (OEM), tier-1 and tier-2 suppliers.