Title: Identification and assessment of supply chain risk: development of AHP model for supply chain risk prioritisation
Authors: Satyendra Kumar Sharma; Anil Bhat
Addresses: Birla Institute of Technology and Science, 77/3, Pooja Marg, Pilani, Rajasthan, PIN 333031, India. ' Birla Institute of Technology and Science, 236/2, Dakashin Marg, Pilani, Rajasthan, PIN 333031, India
Abstract: In modern times, competition has shifted from companies to supply chains and risk management has become one of the greatest challenge for supply chain managers. Risks affect supply chain performance hence supply chain risk assessment needs more attention. For this reason, this paper presents a general risks taxonomy and it gathers together, specifically the risks affecting the performance of an automotive supply chain. Further, the authors use analytic hierarchy process (AHP) methodology to analyse the risk factors. It is hoped, that this analysis will help managers, vendors, consultants and auditors to manage supply chain risks better. All risks that a supply chain might face have been identified, classified and ranked based on their risk exposure on supply chain. Results suggest that the most critical risks originate from supply side of the chain. The most important risks in automotive supply chain turn out to be volatile demand, financial failure of suppliers, suppliers quality problems and failure to generate cost reduction.
Keywords: supply chain management; SCM; risk factors; risk assessment; analytical hierarchy process; AHP; risk exposure; risk prioritisation; supply chain risk; automotive supply chains; automobile industry; volatile demand; financial failure; supplier failure; supplier quality; cost reduction.
International Journal of Agile Systems and Management, 2012 Vol.5 No.4, pp.350 - 369
Received: 18 Oct 2011
Accepted: 17 Apr 2012
Published online: 31 Oct 2012 *