Supply Chain Risk Mitigation Strategies Research Articles

METODE MITIGASI RISIKO RANTAI PASOK BAWANG MERAH

This Research aimed to identify, determine and formulate the mitigation strategies of shallot supply chain risk using Fuzzy FMEA and AHP. Risk identification was performed on shallot supply chain actors include farmers (suppliers), tengkulak (distributors) and pengecer (retailers). Fuzzy FMEA was used as a tool to measure the risks identified priorities. AHP was used as a tool for determining the weighting strategies in supply chain risk mitigation strategies. Research showed that there were some risks identified on the perpetrators of the supply chain in terms of supply and demand. Risk priorities for supply chain farmers (suppliers) were risks associated with government policies that were policies related to shallot imports, the risk priority of middlemen (distributors) supply chain was risks associated with shallot imports competition, and the risk priority of retailers supply chain was a risk for competitor with other retailers. There were six alternative mitigation strategies, and the highest priority was choosing the right varieties, followed by a partnership, improve the promotion, maintain quality, maintain price stability, and maintain supplies.Keywords: AHP, Fuzzy FMEA, Risk Management, Shallot.

Proposed supply chain risk mitigation strategy of chicken slaughter house PT X by house of risk method

Slaughter House PT X is a company engaged in the production, trade, and distribution of chicken meat that having a role to provide the needs of raw material in a form of fresh chicken meat in the chicken meat processing industry. However, this company has the potential to experience a variety of supply chain risk that can disrupt the company’s business processes. The purposes of this study are to identify risk events that have been potentially occurred, identify priority risk agent based on Aggregate Risk Potential (ARP) value, and determine the priority sequence of a risk mitigation strategy in Slaughter House PT X. This study uses the Supply Chain Operation Reference (SCOR) to mapping the company’s supply chain activity. Thereafter House of Risk (HOR) method is used to identify, analyze, evaluate, and designing mitigation strategy to minimize potential occurrence of risk agent. The results of the study showed that there are 33 risk events and 32 risk agents identified. Then, based on the result of risk evaluation, there are 15 priority risk agents for mitigation action. There are 11 proposed mitigation strategies to be implemented in Slaughter House PT X.

Stock Market Reaction to Supply Chain Disruptions from the 2011 Great East Japan Earthquake

Problem definition: This paper provides empirical evidence on the effect of the 2011 Great East Japan Earthquake (GEJE) on the financial performance of firms. Academic/practical relevance: The GEJE was characterized as the most significant disruption ever for global supply chains. In its aftermath, there was a great deal of debate about the risks and vulnerabilities of global supply chains, and there were calls to redesign and restructure supply chains. Methodology: We empirically estimate the effect of the GEJE on the stock prices of firms. Our analyses are based on a global sample of 470 firms collected from articles and announcements in the business press that identify affected firms, as well as 382 firms that are not mentioned in the business press but are in industries potentially subject to contagion or competitive effects. Results: We estimate that firms experiencing supply chain disruptions as a result of the GEJE lost on average 5.21% of their shareholder value during the one-month period after the GEJE. For Japanese firms, the effect was much more severe with an average 9.32% loss in shareholder value. Non-Japanese firms averaged a 3.73% loss in shareholder value. We also find that upstream and downstream supply chain propagation effects from the GEJE are negative, and the contagion effect on firms related to the nuclear industry is very negative. For firms in the rebuilding industries or competitors to firms affected by the GEJE, the competitive effect from the GEJE is positive. Managerial implications: The loss suffered by both Japanese firms and non-Japanese firms experiencing supply chain disruptions as a result of the GEJE is economically significant. Although the loss is more severe for firms whose operations were directly affected by the GEJE, it is also significant for firms who experienced indirect effects from their upstream and downstream supply chain partners, further confirming the importance of supply chain risk mitigation strategies.

Path Analysis Model for Supply Chain Risk Management

The purpose of this paper is to develop a model to understand the relationship of supply chain risk sources, risk drivers, and risk mitigation strategies to the overall risk exposure of the firm and to validate the model empirically. An attempt has been made to determine the major contributors of supply chain risk as viewed by automotive professionals in today's competitive market. This study empirically validates the effects of the three critical constructs on overall supply chain risk exposure. The limitations of this study can be seen in the use of perceptual data from single informants and the focus on automotive firms in a single country. The detailed operationalization of the constructs sheds further light on the major risk sources, drivers, and mitigation strategies in supply chain networks. Clear evidence of proactive strategies in mitigating risks provides managers with a business case to invest in such initiatives.

Proactive cost-effective identification and mitigation of supply delay risks in a low volume high value supply chain using fault-tree analysis

In this paper we use a well-accepted methodology, fault-tree analysis, to identify delay risks and proactively propose a cost-effective mitigation strategy within a low volume high value supply chain. The basis for the assessment is the bill of materials of the product being studied. The top-level event of interest represents the delay in delivering a product to a customer and lower-level events represent the probabilities associated with delays caused by quality and capability deficiencies within the supply chain of the product being studied. Supply chain risk mitigation strategies have been well documented in academic literature. However, much of what has been documented addresses such topics as facility location, inventory buffers, and is generally focused on response strategies once the risk has been realized. This paper presents a robust method to reduce the likelihood of delays in material flow by representing the system of suppliers within a supply chain as a fault-tree and proactively determining the optimum mitigation strategy for the portfolio. The approach is illustrated via real-world numerical scenarios based on hypothetical data sets and the results are presented.

A contextual approach to supply chain risk mitigation

Purpose– As global supply networks proliferate, the strategic significance of supply chain risk management (SCRM) – defined as the identification, evaluation, and management of supply chain-related risks to reduce overall supply chain vulnerability – also increases. Yet, despite consistent evidence that firm performance is enhanced by appropriate fit between strategy and context, extant SCRM research focusses more on identifying sources of supply chain risk, types of SCRM strategy, and performance implications associated with SCRM than on the relative efficacy of alternative primary supply chain risk mitigation strategies in different risk contexts. Drawing on contingency theory, a conceptual framework is proposed that aligns well-established aspects of SCRM to present a rubric for matching primary alternative supply chain risk mitigation strategies (redundancy and flexibility) with particular risk contexts (severity and probability of risk occurrence). The paper aims to discuss these issues.Design/methodology/approach– Conceptual paper.Findings– The proposed framework addresses supply chain managers’ need for a basic rubric to help them choose and implement risk mitigation approaches. The framework may also prove helpful for introducing business students to the fundamentals of SCRM.Originality/value– The framework and associated research propositions provide a theoretically grounded basis for managing the firm’s portfolio of potential supply chain risks by applying appropriate primary risk mitigation strategies based on the specific context of each risk rather than taking a “one size fits all” approach to risk mitigation. An agenda for progressing research on contingency-based approaches to SCRM is also presented.

Selection of risk mitigation strategy in electronic supply chains using grey theory and digraph-matrix approaches

Supply chains are becoming more lengthy and complex due to globalisation and vertical integrations. In this context, adopting proactive approaches is needed for dealing with changing risks and vulnerabilities for securing supply chain systems. Supply chain risks are interlinked and thus, one mitigation strategy can reduce many of other supply chain risks. For example, aggregate or pooling demand reduces forecast risks, capacity risks and inventory risks. Also, some of the risk mitigation strategies have negative influences over certain supply chain risks as adding capacity has a negative influence on capacity risks. Twelve major supply chain risk categories and 21 risk mitigation strategies with typical focus on electronics manufacturing supply chains have been identified. A combination of grey theory and digraph-matrix methodologies has been used for quantifying various supply chain risk mitigation strategies and this approach is not seen in literature till date. The proposed model was also tested taking a case study of an Indian electronics manufacturing company. Obtained results were also subject to sensitivity analysis. The net positive influence values of risk mitigation strategies proposed in this research could effectively be used by top management for ascertaining their risk mitigation strategies for better management of supply chains as a whole.

Development of supply chain risk mitigation strategy: a case study

The supply chain managers are making efforts to identify, assess, manage and mitigate the supply chain risks successfully to survive in the long run and to attain competitive advantages. The failure to manage these risks effectively can have a significant negative impact on supply chain performance. Therefore, the supply chain risks should be identified, quantified and analysed and it will form the basis for developing the supply chain mitigation strategies. Therefore, a complete and structured methodology is proposed for analysing supply chain risks and developing the supply chain risk mitigation strategies in a manufacturing supply chain environment. The application of proposed methodology has been demonstrated with a manufacturing case environment. It will be quite useful in the environment where quantitative information related to supply chain risks is not available.

An Integrated Fuzzy Approach for the Evaluation of Supply Chain Risk Mitigation Strategies

Competing in an increasingly uncertain business environment, organizations need to mitigate its supply chain risks to enhance their resiliency. However, it is important to implement appropriate strategies to meet business needs. This paper presents a novel approach that integrates fuzzy risk assessment and fuzzy Delphi for the evaluation of strategies in order to mitigate supply chain risks. The novelty of the model lies in the fact that an analytical tool enables the specific business preferences concerning supply chain risks to be taken into consideration in making the strategic decisions. It provides a practical solution by which companies can systematically assess the risks involved in the supply chain and select appropriate strategies to address them.

Assessing the Efficiency of Risk Mitigation Strategies in Supply Chains

Mitigating supply chain risk is a critical component of a company's overall risk management strategy. Drawing upon Contingency Theory, we posit that the appropriateness and effectiveness of risk mitigation strategies are contingent on the internal and external environments and that there is no one‐size‐fits‐all strategy. While literature on risk management has proposed a variety of tools and techniques for effectively evaluating and managing supply chain risks, comprehensive assessment of the efficiencies of alternative risk mitigation strategies has not been addressed in the literature. Such an assessment will help managers select the appropriate mitigation strategy for a given decision‐making environment. To this end, this study is first of its kind in evaluating and proposing efficient supply chain risk mitigation strategies in the presence of a variety of risk categories, risk sources, and supply chain configurations. We combine an empirically grounded simulation methodology with data envelopment analysis and nonparametric statistical methods to analyze and rank alternative mitigation strategies. We find that the more efficient strategies focus on flexibility rather than on redundancy for supply chain failures. Our research presents several interesting and useful managerial insights for deciding what strategies are most capable of mitigating risks in a variety of contexts.

Managing Supply Chain Risks and Risk Mitigation Strategies

IntroductionGlobal supply chain management is exposed to a variety of risks such as demand fluctuations, exchange-rate fluctuations, price fluctuations, supply disruption, and supply delays.2 In addition, because of business activities and growth, management often has created conflicts among risks. Thus, business firms must develop mitigation strategies that effectively manage these risks in the supply chain.3 Supply chain risk management (SCRM) takes a proactive approach to the development of mitigation strategies for supply chain risks, giving important strategic alternatives and insights while overcoming challenges presented by the information and knowledge age.4The purpose of this paper is threefold: 1) to identify, assess, and prioritize supply chain risks; 2) to use the analytic hierarchy process (AHP) technique to support the strategic planning in supply chain management (SCM) decision-making; and 3) to provide business decision makers with a model to identify risk mitigation strategies. Using a business firm (BF) in the Kaesong Industrial Complex (KIC), the study focuses on exploring supply chain risks' characteristics in order to implement risk mitigation strategies that will improve the BF's and the KIC's decision-making planning process and managerial policy.5 The study will suggest risk mitigation strategies that will enable the BF to respond to innovation and new growth, while reinforcing overall ongoing business planning strategies to meet defined requirements in the KIC business setting.Supply Chain Risk ManagementSupply chain management (SCM) is defined as an integrated business philosophy for managing information, materials, and monetary flows among different facilities, suppliers, customers, and logistic levels. SCM includes both internal customers, such as all cross-functional decision-makers within an organization that have direct and/or indirect impact, and external customers such as suppliers, distributors, transporters, warehouses, retailers, and even end users. Because of the many qualitative and quantitative factors which must be included in SCM, planning is a complicated decision-making problem in business.6 Given the complexity of SCM, especially in cross-border supply chains, many studies have applied different business methodologies to real world situations.7Supply chain risk is defined as any risk associated with the flow of materials, information, and monetary transaction in a supply chain process. An effective supply chain risk management (SCRM) strategy embeds risk management into all supply chain functions, from inbound to outbound supply chain streams. Conventional risk management identifies and evaluates the various supply chain risk factors and their potential effects in areas such as purchasing and procurement, manufacturing and production, resources and real estate, outsourcing, logistics and warehousing, inventory, and legal matters. Risk factors can be identified in terms of sources, places, and relationships, or from a managerial function perspective, such as financial risk, operational risk, human resources risk, and information risk.8 Table 1 on page 36 presents categories and drivers of supply chain risks.A more comprehensive SCRM strategy may need proactive participants in the overall SCM planning processes.9 Although managing supply chain risk is a primary business activity, an even more important activity is the identification of proper risk mitigation strategies that will make the business more sustainable and profitable. By identifying risks and developing a pertinent strategy in a supply chain, business firms can align risks to the related strategies. In manufacturing-business firms, four major strategies are cost, quality, delivery, and flexibility.The existence of numerous risk factors makes supply chain decision-making more difficult to plan and implement. It is complicated because many tangible and intangible risk factors must be included in the decision-making process of a supply chain planning process. …

Global supply chain risk management: a socio-technical perspective

With the globalisation of markets and operations, companies are faced with increased risks in their supply chains. While the literature offers a large set of practices, guidelines and concepts for mitigating supply chain risks, implementing such strategies as adding buffers and building flexibility is a costly endeavour. Also, effective supply chain risk management is not only about adopting a wide range of best practices, but also finding the right mix of practices which fits the available resources. This paper attempts to examine the appropriateness of global supply chain risk mitigation strategies from a socio-technical perspective. After a literature review, it first draws insights from normal accident theory (NAT) developed in a socio-technical system and then relates it to global supply chain disruptions. The complexity implications of a global supply chain are further discussed. This is followed by the managerial and research implications derived from this research. The paper concludes with some recommendations for future research.

Inoperability input‐output modeling (IIM) of disruptions to supply chain networks

AbstractIn this paper, the Inoperability Input‐Output Model (IIM) is deployed for assessing the impacts of disruptive events on supply chain networks under an unsafe environment. The IIM for supply chain networks has been proposed, based on the original IIM used in macro‐economics. A new method called the OWA (Ordered Weighted Averaging) Operator has been formulated to evaluate the interdependency matrix, a key component of the IIM. Similar to the capability of the basic IIM to describe the propagation impacts of disruptions to macroeconomic systems, the IIM for supply chain networks is capable of describing the propagation effects of disruptions to interdependent supply chain components. IIM assesses the impacts of disruptions to supply chain networks with “inoperability” and “economic losses” metrics, which can provide helpful insights for risk management of supply chain networks. An example supply chain network is used to illustrate the application of IIM for systemic risk assessment of supply chains under an unsafe environment. A risk mitigation strategy by increasing the number of suppliers has been considered to reduce the adverse effects caused by the supply reduction of the single secondary supplier in the example supply chain network. In addition, a simulation model integrated with Monte Carlo simulation method has been developed to validate the accuracy of the IIM for supply chain. The example shows that the application of IIM can provide useful guidance toward supply chain risk management or mitigation strategies and it could also be used to test the effectiveness of these strategies. © 2009 Wiley Periodicals, Inc. Syst Eng