Global supply chain risk management strategies

Abstract

Purpose-Global supply chains are more risky than domestic supply chains due to numerous links interconnecting a wide network of firms. These links are prone to disruptions, bankruptcies, breakdowns, macroeconomic and political changes, and disasters leading to higher risks and making risk management difficult. The purpose of this paper is to explore the phenomenon of risk management and risk management strategies in global supply chains. Design/methodology/approach-This paper is based on an extensive literature review and a qualitative study comprising 14 in-depth interviews and a focus group meeting with senior supply chain executives. Findings-The study provides insights into the applicability of six risk management strategies with respect to environmental conditions and the role of three moderators. Research limitations/implications-The model is developed in a global manufacturing supply chain context. It should be tested in other contexts and with other methods to provide generalizability. The study takes a much needed step toward building a theory of risk management in global supply chains, which opens important future research directions. Practical implications-This research provides direction to managers for choosing risk management strategies based on the global supply chain environment. Moderators have practical implications for global supply chain managers. Originality/value-The paper addresses an identified gap in the literature for selecting risk management strategies in global supply chains. It employs grounded theory, a methodology appropriate for theory-building, to explore a phenomenon with an inadequate theoretical base.

Critical perspectives on “manufactured” risks arising from Eurocentric business practices in Africa

“…Market risk is also created when the actions of resource-seeking MNCs produce a change in the value of the market factors. Although there are different ways of conceptualising risks, Manuj and Mentzer (2008) mentioned that the combination of supply, process, demand and security risk force market actors to behave differently, which determines the overall risk level in certain industries, markets and regions. In a related study, L'Hermitte et al, (2016) cite that there are challenges in ensuring a clear categorisation of risks in the supply chain of MNCs, simply because of the nature of their operations.…”

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

“…Research by Manuj and Mentzer (2008) highlights the increasing risks posed by cost reduction initiatives in the supply chain. Such decisions "must be linked with sourcing and marketing decisions to optimise supply chain operations" (p. 212).…”

“…In addition, supply security issues were mainly identified within the electronics industry, which can result from global sourcing, supply base reduction and complex, lean supply chains (Hallikas et al, 2004;Blackhurst et al, 2005;Jüttner, 2005). Although, supplier bankruptcies cannot be predicted, the central question is whether the sourcing function is indirectly responsible for a bankruptcy, especially while price and cost savings still dominate the sourcing objectives and the supplier gets squeezed without a long-term, strategic perspective (Rossetti and Choi, 2005;Manuj and Mentzer, 2008). …”

“…Although Khan and Burnes (2007) argue that the supply chain risk management is not well perceived, Rossetti and Choi (2005) remind us of the risks of close collaborations and dependencies. Considering that global sourcing continues to increase, and the companies' objective to reduce costs, the risk exposure increases (Wagner and Bode, 2006;Manuj and Mentzer, 2008). Research by Jüttner (2005) shows the importance of risk consideration in strategy formulation, where globalisation of the supply chain, focused factories, centralised warehousing or supply base reduction are drivers for risks and confirmed causes of disruptions.…”

Modelos para gestão de riscos em cadeias de suprimentos: revisão, análise e diretrizes para futuras pesquisas

“…Para o processo de avaliação ser eficaz, esta etapa necessita ser simples e pode ser auxiliada com ilustrações gráficas para mapear os riscos e, de maneira adequada, mostrar onde, quando e com que probabilidade e impacto eles podem ocorrer (HALLIKAS; VIROLAINEN; HARLAND, BRENCHLEY;WALKER, 2003;MANUJ;MENTZER, 2008b;MATOOK;LASCH;TAMASCHKE, 2009;RITCHIE;BRINDLEY, 2007).…”