Supply Chain Sustainability Risk Research Articles

Risk management strategy for supply chain sustainability and resilience capability

Supply chain sustainability-related risks that have an undesirable environmental, social and economic impact result in global supply chain uncertainty and complexity. This paper investigates the relationships between supply chain sustainability risks, global uncertainty and mitigating strategies to attain supply chain resilience capability. The paper suggests the supply chain resilience capability and four fundamental risk-mitigating strategies to cope with supply chain sustainability risks. Data collected via survey were employed for structural equation modelling and moderation tests to explore appropriate mitigating strategies for differing sustainability risk environments. The results suggest a structural procedure for better supply chain resilience under diverse sustainability risks. Inspired by the literature gap, the study empirically examines how sustainability risks and global uncertainty influence supply chain resilience and provides the most effective risk management strategies among accept, avoid, control, share/transfer according to different sustainability risks. There is a lack of empirical research investigating how to address the supply chain sustainability risk through the provision of effective mitigating strategies for better supply chain resilience capability. The results provide insight for future research in supply chain resilience and sustainability studies.

Resilience strategies to mitigate “extreme” disruptions in sustainable tourism supply chain

PurposeDrawing on the dynamic capability view (DCV), this research determines the suitable configurations of resilience strategies for sustainable tourism supply chain performance amidst “extreme” disruptive events affecting the entire supply chain.Design/methodology/approachThis research applies a multi-study and multi-method approach. Study 1 utilizes in-depth interviews to identify a list of tourism supply chain sustainability risks and resilience strategies. Study 2, using quality function deployment (QFD) technique, determines the most important resilience strategies corresponding to highly significant risks. Study 3, on the other hand, adopts a fuzzy set qualitative comparative analysis (fsQCA) to determine the best recipe of resilience strategies and risks to make the tourism supply chain performance sustainable.FindingsThe findings reveal that sustainable tourism performance during an extreme disruptive event (e.g. COVID-19 health crisis) depends on the combined effect of tourism resilience strategies and risks instead of their individual effect.Practical implicationsThe research findings offer significant managerial implications. Managers may experiment with multiple causal conditions of risks and resilience strategies to engender the expected outcome.Originality/valueThis research extends current knowledge on tourism supply chain and offers insights for managers to mitigate the risks and ensures sustainable performance in the context of extreme disruptive events.

Sustainability‐related supply chain risks and supply chain performances: The moderating effects of dynamic supply chain management practices

AbstractIn recent years, the supply chain has undergone significant transformations due to various factors such as globalization, the COVID‐19 pandemic, advancements in information technology, outsourcing, and offshore production. These changes have made the supply network more complex, particularly with regards to sustainability issues, and have increased the vulnerability of the supply chain to sustainability‐related risks. However, despite the growing importance of sustainability‐related supply chain risks (SSCRs), there is a lack of understanding and inadequate research on critical aspects in the existing literature on this topic, such as how firms in volatile and demand‐driven sectors cope with SSCRs and how these risks affect the firms' operational performance. To address this gap, this study investigates the impact of sustainability‐related supply chain risks on suppliers, customers, and the economic performance of businesses in the garment industry in Vietnam. Using a sample of 254 garment companies, this study aims to develop a comprehensive measuring scale for supply chain sustainability risk and evaluates the effectiveness of dynamic supply chain management techniques in mitigating the impact of sustainability‐related risks on firm performance characteristics. The findings of this research reveal that there is a risk–return trade‐off for economic hazards, while no such trade‐off is observed for social and environmental hazards. Furthermore, we find that supplier management and supply chain integration methods can assist in the management of environmental hazards, leading to a positive outcome for both businesses and the environment. The research results provide both theoretical and managerial implications for mitigating the risks associated with sustainability in the supply chain. The results suggest that effective management of sustainability‐related risks can result in a win‐win scenario for both businesses and the environment.

Supply chain sustainability risk decision support model using integrated Preference Selection Index (PSI) method and prospect theory

PurposeThe purpose of this paper is to introduce the integrated model of the Preference Selection Index (PSI) and the prospect theory as new means to appraise the impact of supply chain sustainability risks based on five pillars of sustainability. Research has shown that sustainability risk assessment has a strong positive impact on improving the performance of enterprises.Design/methodology/approachThis study adopts a new decision support model for assessing supply chain sustainability risk based on additional failure mode and effect analysis parameters and its integration with PSI methodology and prospect theory. A case example of the supply chain small and medium enterprise (SME) producing fashion have been used in this study.FindingsThe result of this study reveals some critical supply chain sustainability risks affecting the sustainability of enterprises under study.Research limitations/implicationsThe use of a limited sample is often associated as a limitation in the research studies and this study is based on findings from SMEs in the fashion retail supply chain. This preliminary study provides academics and practitioners an exemplar of supply chain sustainability risk assessment using integration of the PSI method and prospect theory.Practical implicationsThe result of this study is beneficial for practitioners, particularly owner–managers of SMEs who can use this study as guidance on how to consider risk behavior to identify and select the critical sustainability risks and plan mitigating strategies accordingly.Originality/valueScientific studies on using the PSI and its integration with prospect theory as means to assess the criticality of supply chain sustainability risks is very rare. To the best of the authors’ knowledge, this is the first paper that presents the integrated model of the PSI and prospect theory to rank supply chain sustainability risks based on five pillars of sustainability.

Supply chain sustainability risk assessment model using integration of the preference selection index (PSI) and the Shannon entropy

PurposeThis study proposes a new model for assessing supply chain sustainability risk integrating subjectivity and objectivity of decision-maker. Research has shown the vacancy of study in dealing with the above issue. To fill this research gap, a new decision support model considering the subjectivity and objectivity of decision-makers in assigning the weight of the supply chain risk reprioritization criteria is presented and demonstrated using a case example.Design/methodology/approachThis study adopts a new decision support model for assessing supply chain sustainability risk based on additional failure mode and effect analysis (FMEA) parameters and its integration with preference selection index (PSI) methodology and the Shannon entropy. A case example of the supply chain small and medium enterprise (SME) producing handy crafts has been used in this study.FindingsThe result of the study reveals critical sustainability risk dimensions and their risk elements demanding management attention to support realization to a more sustainable business operation.Research limitations/implicationsThe use of a single case study is often associated as a limitation in the research studies, and this study is based on findings from SMEs in the handy craft sector in a developing country. Nonetheless, future studies may focus on replicating this study using more samples. This preliminary study provides academics and practitioners with an exemplar of supply chain sustainability risk assessment from the SME in a developing country.Practical implicationsThe result of this study is beneficial for practitioners, particularly owner-managers of SMEs who can use this study as guidance on how to identify and select the critical sustainability risks and plan mitigating strategies accordingly.Originality/valueScientific effort on appraising criticality of supply chain sustainability risks considering subjectivity and objectivity of decision-maker simultaneously is missing in earlier studies. To the best of the author’s knowledge, this is the first paper applying the PSI and Shannon entropy method and using it for evaluating the impact of supply chain risk based on five sustainability pillars. The findings and suggestions for future research initiatives will provide new insights for scholars and practitioners in managing SME supply chain sustainability risks.

A Hybrid Model for Supply Chain Risk Management Based on Five-dimensional Sustainability Approach in Telecommunication Industry

Sustainability of supply chain risk management is one of the main competitive advantages of every organization for long-standing. There are several models in the research literature to manage sustainability risks of the supply chain. Considering that critical risks have the highest impact and have the largest share of risk management resources, they need to be identified using special techniques to make risk management more accurate and more reliable. In this paper, a new three-phase model is presented to supply chain sustainability risks management. This model includes the failure mode and effects analysis phase for identifying and assessing all risks and classification them, fuzzy VIKOR phase for ranking critical risks, and management phase to deal with critical risks. The categorization of risks was conducted according to a new five-dimensional approach to sustainable progress, including environmental, economic, social, technical, and organizational aspects on various sectors of the supply chain. The telecommunication industry of Iran is considered to show the model performance. The results indicated that consideration of the fuzzy VIKOR phase is necessary in order to accurately assess critical risks because of the priority of critical risks is not correctly identified through Failure mode and effects analysis due to the shortcomings of this method and cause errors. It was also found that the technical risks initiated by the organization are the most dangerous risk that threatens the sustainability of the supply chain.

Assessing sustainability risks in the supply chain of the textile industry under uncertainty

Today, sustainability has gained significant importance in supply chain management due to its strategic business advantages. Concurrently, industries are facing supply chain sustainability risks emanated from diversified sources. So far, however, literature is scarce regarding sustainability risk assessment. To fill this research gap, this paper presents a real-life case study of the textile industry to identify and quantify supply chain sustainability risks. In this paper, the fuzzy synthetic evaluation method is applied to compute the likelihood of occurrence, amount of impact, risk criticality of each risk factor group, and the total risk. This study finds five risk groups along with twenty sustainability risk factors. The risk groups are listed as ‘supplier’, ‘financial’, ‘social’, ‘transportation’, and ‘environmental’, based on their respective risk criticality values. The top three sustainability risk factors are ‘poor product transportation system’, ‘air, water, and soil pollution’, and ‘factory fire’. The overall risk criticality value of sustainability risks of the case industry is found as approximately high. An objective of this study is to guide practitioners to take the required strategic steps to assess and manage sustainability risks in their supply chains.

A six-dimensional model for supply chain sustainability risk analysis in telecommunication networks: a case study

PurposeThe main purpose of the present study was to improve and develop previously proposed models for Iran telecommunication networks. It should be noted that the six-dimensional (6D) sustainability model used in this study will be a useful and comprehensive model for industries. Since, the new dimension of IT along with the five well-known economic, social, environmental, technical and institutional aspects of organizations is considered to have great impacts on supply chain sustainability; the proposed framework can be practical.Design/methodology/approachAccording to the related literature review, there are two research streams in supply chain management. The first stream is exploratory research, seeking out conceptual discussions in this area. The second one is associated with mathematical models and techniques, aiming to set decision-making rules in this regard (Agrell et al., 2004). In this study, evaluation was performed using the FMEA method as an analytical technique based on the principle of pre-occurrence prevention to identify potential failure factors in sensitive systems (Mohammadfam and Kianfari, 2008).FindingsAfter identifying the risks and causes of the incidence and effects and consequences of risks, preventive and risk control measures and advisory strategies were presented. Customers with 45.76% share in critical risks are threatening to maintain supply chain in these companies. During this study, it was found that 33.9% of the main source of supply chain critical risks was customers, constituting 45.76% of such risks, accompanied by organization, having a 38.88% share of critical risk generation. The study findings also revealed that 33.9% of critical risks were mainly (equally) related to economic and technical aspects of supply chain sustainability in telecommunication networks. Moreover, as a newly-introduced sixth dimension, IT represented 10.17% of critical risks threatening supply chain sustainability in such networks. Critical risks are mainly related to the economic and technical aspects (equally) with the sustainability of the telecommunication networks supply chain. Also, as a new finding and the sixth dimension, 10.17% of the critical risks that threaten the sustainability of the telecommunication networks supply chain have the information technology dimension.Originality/valueThe internet and fixed and mobile data services are provided by several private companies in Iran, which are relatively similar in terms of their supply chains. In order to manage the sustainability of Iran's telecommunication supply chain, telecommunication networks affiliated to Iran Telecommunication Company (ITC), operating in the field of data and internet services and fixed telephone were selected in 31 provinces. The intended networks were also providing an important part of the country's needs including Mobile Telecommunication Company of Iran, a subsidiary of Iran's telecommunication networks, as one of the top companies in this industry. Accordingly, all the networks studied in this study needed to be identified with regard to communication sustainability risks, since they provide management solutions to each other by segregating risks. In this study, 68 managers and 72 experts participated in different work teams of telecommunication networks.

Game—Rolling the Dice on Global Supply Chain Sustainability: A Total Cost of Ownership Simulation

Sustainability in management education is a potential solution to societal challenges, influencing students’ worldviews and attitudes to contribute to a more profound social change. Through this innovative dice-based classroom simulation, students are exposed to supply chain sustainability, total cost of ownership (TCO), and risk management while also understanding their linkages through effective instructor debrief. Student teams compete by selecting sourcing options such as supplier location, transportation methods, and sustainability reputation from a menu, then see how their decisions fare as the product-line life cycle is simulated with a dice. The debrief facilitated by the instructor compares and contrasts results across the teams, generating insights into the interrelationships between supply chain sustainability choices, TCO, and risk management. Successfully conducted by multiple instructors, in multiple countries, and across all levels of management education (undergraduate, master of science, and executive master of business administration), survey results (n = 350) plus a pilot study (n = 31) confirm that this dice-based simulation accomplishes multiple learning objectives while also providing a highly engaging experiential learning classroom environment for this sample.

Implementing supplier management strategies for supply chain sustainability risks in multinational companies

PurposeIn a time where stakeholders increasingly demand social, environmental, and economic sustainability, mismanaging suppliers can impose substantial sustainability risks for a company and harm its reputation and business severely. This research explores the implementation of a corporate sustainable supplier strategy designed to cope with such risks from an agency theory perspective.Design/methodology/approachA case study of a multinational enterprise, a provider of leading mobility solutions in the realm of escalators, moving walkways and elevators, is conducted. Data is collected from multiple sources of evidence, including strategy documents, a focus group and semi-structured interviews.FindingsThe study identifies several implementation challenges and coping mechanisms in firstly, the agency relationships between the headquarter and the regional subsidiary units and secondly, the relationships between the regional subsidiary units and their suppliers.Research limitations/implicationsA framework conceptualising the implementation of sustainable supplier strategies is proposed. The framework positions the topic at the interface between supply chain sustainability risk, supplier quality management as well as agency relationships and identifies avenues for further research. The key limitations refer to the single case study methodology and the exclusion of suppliers in the data collection approach.Practical implicationsThe proposed framework can support multinational enterprises in developing corporate sustainability strategies and in implementing them in the supplier network.Originality/valueThe originality of the framework lies in the integrated approach combining supply chain sustainability risk, supplier quality management and triadic agency relationships.

Sustainability risk management in the agri-food supply chain: literature review

Maintaining an effective risk management procedure can counterbalance a critical effect on supply chains. The Agri-food supply chain has characteristics that are unique and complex if compared with a conventional supply chain. Sustainability risk management in the supply chain is the key to a competitive organisation in the long term. The aim of this paper is to review current research on sustainable risk management in the Agri-food industry chain. These reviews were arranged in steps systematically, ranging from searching related to review of supply chain sustainability risk management (SCSRM), reviewing the general framework of SCSRM and the framework of Agri-food SCSRM. Selection of literature review papers in the period 2010-2019, and obtained 30 papers. Risk aspects were analysed using a multi-dimensional approach (economic, social, environmental, technical, and institutional) that influences the sustainability of the Agri-food industry. The results show that there are few studies focusing on risk management to achieve a sustainable supply chain system. Some studies only focus on Triple Bottom Line elements (economic, social, and environmental). Sometimes, these studies do not consider risks from other elements such as technical and institutional aspects that can be influence the sustainability of the Agri-food industry. Technical aspects such as the reliability of technological systems and institutional aspects as policymakers support sustainability in a business process. The contribution of this paper is to provide an initial theoretical framework to guide researchers in analysing risk through a multi-dimensional approach to sustainability.

Decision-making models and support systems for supply chain risk: literature mapping and future research agenda

Supply chain disruptions have serious consequences for society and this has made supply chain risk management (SCRM) an attractive area for researchers and managers. In this paper, we use an objective literature mapping approach to identify, classify, and analyze decision-making models and support systems for SCRM, providing an agenda for future research. Through bibliometric networks of articles published in the Scopus database, we analyze the most influential decision-making models and support systems for SCRM, evaluate the main areas of current research, and provide insights for future research in this field. The main results are the following: we found that the identity of the area is structured in three groups of risk decision support models: (i) quantitative multicriteria decision models, (ii) stochastic decision-making models, and (iii) computational simulation/optimization models. We mapped six current research clusters: (i) conceptual and qualitative risk models, (ii) upstream supply chain risk models, (iii) downstream supply chain risk models, (iv) supply chain sustainability risk models, (v) stochastic and multicriteria decision risk models, and (vi) emerging techniques risk models. We identified seven future research clusters, with insights from further studies for: (i) tools to operate SCRM data, (ii) validation of risk models, (iii) computational improvement for data analysis, (iv) multi-level and multi-period supply chains, (v) agrifood risks, (vi) energy risks and (vii) sustainability risks. Finally, the future research agenda should prioritize SCRM's holistic vision, the relationship between Big Data, Industry 4.0 and SCRM, as well as emerging social and environmental risks.

Who Gets More Media Coverage for Supply Chain Sustainability Risks: Larger or More Visible Firms? (WITHDRAWN)

For an unsustainable supplier behavior to become a risk for the buying firm, two conditions should be met: (1) stakeholders should become aware of a supplier’s environmental, social or governance (...

Supply chain sustainability risk and assessment

Risk on the supply chain from various sustainability-related factors has increasingly become relevant to companies in many industries. There however still lacks a comprehensive method to quantitatively evaluate supply chain sustainability risk taking into account the triple bottom line of sustainability (economic, social, and environmental). This study develops a framework to evaluate supply chain sustainability risk by measuring supply chain-wide operational risk, social risk, and environmental risk to form an aggregate metric. A set of indicators readily available in literature are used to represent various aspects of supply chain sustainability risk. Risk assessment space and materiality analysis are then used to prioritize resource allocation among supply chain stages from two distinct perspectives for mitigating supply chain sustainability risk. Two case studies are provided to demonstrate the application of the developed framework, representing two main types of supply chain structure. The apparel industry example represents the deep-structure supply chain driven by relatively simple products, while the automotive industry example represents the broad-structure supply chain driven by more complex products. While the case studies focus on industry-level assessment for demonstration purpose, the developed framework can be flexibly applied to evaluate supply chain sustainability risk for specific companies in any industry.

Using Country Sustainability Risk to Inform Sustainable Supply Chain Management: A Design Science Study

The sustainability of our global supply chains is an essential concern in strategic supply chain management research. Modern information and communication technologies enable stakeholders to punish buying firms for any sustainability‐related grievances at their suppliers, even in remote locations. This study investigates how the notion of country sustainability risk can inform sustainable supply chain management, in particular with respect to sustainability risk assessment at the individual supplier level. Drawing on institutional theory, we provide insights surrounding the emergence of environmental, social, and governance‐related country‐level sustainability risks and show their implications for and application in sustainable supply chain management. The study employs a design science methodology, based on cooperation with a multidivisional German technology firm, to develop a supply chain sustainability risk (SCSR) map as technological solution design. This article contributes to the study of SCSR by reconciling the scholarly SCSR discourse with the buying firms’ pursuit of efficiency. Moreover, it elucidates the augmentation of a research agenda through a design science approach. In practical terms, the technological solution design can directly inform managers about SCSR at the country level and serves as a decision basis for the management of individual suppliers.

More than reputation losses? Financial consequences from supply chain sustainability risks

Negative legitimacy spillovers in the form of supply chain sustainability risks (SCSR), which manifest whenever a buying firm is held accountable for the behavior of its suppliers, have recently drawn major attention by academic scholars. This study examines whether SCSR have an impact on the stock price performance of the buying firm. Specifically, we utilize event study methodology to analyze the stock price behavior surrounding 2,814 SCSR manifestations associated with 392 large companies listed on the Stoxx Global 1800 Index over a period of 10 years (2007-2016), providing evidence that manifestations of SCSR result in negative abnormal stock returns for the buying firms. Drawing on stakeholder theory, the legitimacy spillover literature, and the literature on SCSR, we posit that magnitude of the stock price reaction is affected negatively by the harshness associated with the issue and the media power, and positively by the anticipated sustainability risk. We find that negative abnormal stock returns are indeed higher for SCSR announced by more powerful media outlets and SCSR associated with firms operating in countries and industries where sustainable behavior is not expected. However, the level of harshness accompanying the incident is not associated with the stock price reaction.

Relationship between sustainability and risk management in fashion supply chains

PurposeFashion supply chain (FSC) research has identified two important issues of sustainability management and risk management. However, investigation of these issues is relatively sparse and has primarily been independent with little combinatory research, despite their important interrelationships. The purpose of this paper is to address that gap by critically reviewing extant literature to synthesise important sustainability risk issues in FSCs and proposing an empirical research agenda.Design/methodology/approachThis paper uses a structured literature review approach and Denyer and Tranfield’s (2009) context, intervention, mechanisms and outcome (CIMO) criteria for critical analysis to enable the development of future empirical research areas.FindingsWhile sustainability and risk are discussed independently in the supply chain literature, combinatory discussions are very limited, despite the interdependence of these concepts. There is little substantial research on sustainability risk in global FSCs and therefore, an empirical research agenda is proposed with the four research directions to address the gap and take forward the notion of supply chain sustainability risk management in FSCs: definition; organisation and management; influence on performance; and development of a conceptual framework.Research limitations/implicationsThis paper provides a critical literature review and thus lacks empirical study.Practical implicationsThis paper highlights important issues in sustainability risk management for FSCs and presents an agenda for future empirical research.Originality/valueThis paper contributes by providing a combinatory synthesis of sustainability and risk management in FSC literature and an agenda for future empirical research.

Sustainability and the False Sense of Legitimacy: How Institutional Distance Augments Risk in Global Supply Chains

Supply chain scholars have begun to recognize the institutional influences on supply chains, yet scarce attention has been directed toward the fact that global supply chains often comprise different institutions. This omission represents a severe shortcoming because the understanding of what constitutes legitimate behavior may vary substantially between contexts. This conceptual study employs the institutional distance concept to the case of supply chain sustainability risks. It focuses initially on paradoxical situations in which both the buyer and the supplier fully comply with stakeholder expectations within their own legitimacy contexts, yet the buyer's stakeholders still withdraw legitimacy from and harm the buyer. The study analyzes the causal microfoundations of how and why such paradoxical risks manifest, drawing on stakeholder theory and institutional theory. The analysis shows that accounting for the differing legitimacy contexts is necessary for explaining these risks, thereby substantiating our initial claim that institutional distance matters to global supply chains. The study yields important implications for corporate practice in that it highlights an inherent trade‐off in many global supply chains.

Extending the supply chain visibility boundary

PurposeThe purpose of this paper is to investigate how buying firms facing low supply chain visibility can utilize their stakeholder network to identify salient supply chain sustainability risks (SCSR).Design/methodology/approachThe study employs a design science approach to develop a procedural model for identifying SCSR as a new artifact. A small-scale field-testing study in a food supply chain of a Swiss retail firm demonstrates its applicability and pragmatic validity.FindingsWhen stakeholder knowledge external to the supply chain is regarded as a valuable resource, a generic understanding of a buying firm’s supply chain suffices to identify SCSR hotspots without creating complexity for the SCSR management.Research limitations/implicationsThe paper contributes to the study of SCSR by identifying mechanisms buying firms can employ to identify SCSR hotspots and fostering the nascent understanding of responsibility attribution by stakeholders. Moreover, the emerging theory of the supply chain is enriched by paving a way to extend the supply chain visibility boundary. The procedural model is presumably most useful in contexts of elevated stakeholder pressure and low supply chain visibility. Future research should seek to validate and improve the effectiveness of the newly designed artifact.Practical implicationsThe procedural model is directly applicable in corporate practice to the identification of SCSR. Moreover, its application fosters the understanding of a firm’s supply chain and its stakeholder network.Originality/valueSCSR is an increasingly important phenomenon in corporate practice that has received only scarce research attention. The design science approach represents a valuable means for generating theoretical insights and emergent solutions to the real-world problem of SCSR identification.

Sustainability and the False Sense of Legitimacy: Paradoxical Risks in Global Supply Chains

Supply chain scholars have begun to recognize the institutional influences on supply chains, yet scarce attention has been directed towards the fact that global supply chains often comprise different institutions. This omission represents a severe shortcoming because the understanding of what constitutes legitimate behavior may vary substantially between contexts. This conceptual study employs the institutional distance concept to the case of supply chain sustainability risks. It focuses initially on paradoxical situations in which both the buyer and the supplier fully comply with stakeholder expectations within their own legitimacy contexts, yet the buyer’s stakeholders still withdraw legitimacy from and harm the buyer. The study analyzes the causal microfoundations of how and why such paradoxical risks manifest, drawing on stakeholder theory and institutional theory. The analysis shows that accounting for the differing legitimacy contexts is necessary for explaining these risks, thereby substantiating our initial claim that institutional distance matters to global supply chains. The study yields important implications for corporate practice in that it highlights an inherent trade-off in many global supply chains.