Supply risk management in a small company perspective

Abstract

PurposeThe purpose of the paper is to determine if owners of small manufacturing companies manage supply risk in similar ways and identify the practices constituting this potential joint approach.Design/methodology/approachAn interpretive case based methodology was applied in this research. Interview data on the supply risk management practices of 11 SCOs (small company owners) were analysed.FindingsThe findings confirm that the 11 studied SCOs apply largely the same supply risk management practices, which can be characterised as defensive. The approach covers risk elimination practices such as knowledge protection and local sourcing as the major practices, combined with relational practices such as fairness, loyalty, and seeking out responsive, dependable, and like‐minded suppliers.Research limitations/implicationsThe study focuses exclusively on small manufacturing companies. Studies of other types of companies, such as trade or hi‐tech companies might reveal other practices.Practical implicationsThe SCO supply risk management approach is optimised to simultaneously reduce supply risks and resource and time consumption. Especially the relational practices may be feasible alternatives and valuable to supply chain managers and purchasers. Local sourcing and knowledge protection are effective practices, but tend to work at the expense of supply chain opportunities.Originality/valueNo studies of small company supply risk management exist in the literature, despite the increased focus on supply risk management and small company purchasing/SCM. The study addresses this gap by offering insights into small company supply risk management practices.