Benchmarking the relationship between supply chain risk mitigation strategies and practices: an integrated approach

Abstract

PurposeThe purpose of this paper is to explore the relationship between various risk management strategies and risk management practices in order to design and hence enact a suitable supply chain risk mitigation (RM) plan. Additionally, this study proposes a hierarchical framework to explain the mutual relationship between supply chain risk management (SCRM) practices and strategies by considering the underlying dimensions between them.Design/methodology/approachAn amalgamation of systematic literature analysis (SLA) and correspondence analysis (CA) has been performed to develop the conceptual framework. A real-life case of Indian petroleum supply chain has been considered to validate and explain the proposed model.FindingsThe results reveal three underlying dimensions, which associate the relationship between RM strategies. They are, risk adaptability of SC managers with a variance of 34.71%, followed by resource capability of the firm and the degree of sophistication of RM practices, with variances of 27.72 and 20.35%, respectively. Risk avoidance strategy comprises of practices such as supplier evaluation, technology adaption, flexible process and information security. On the other extreme, the risk sharing strategy includes revenue sharing, insurance, collaboration, public–private partnership and so on as essential RM practices.Research limitations/implicationsThe study not only focuses on the distinction between RM strategies and practices, which were used interchangeably in the prior literature, but also provides an association between the same by exploring the underlying dimensions. These underlying dimensions perform a crucial role while developing a risk management plan. This study explicitly focuses on the RM step of SCRM process. Pre and post risk mitigation phases of SCRM process, such as risk assessment and risk monitoring, are beyond the scope of the current research.Originality/valueThe paper develops a framework for mapping various RM strategies with their corresponding practices by considering the Indian petroleum supply chain as a viable case study. Various theoretical and business implications are derived in the context of the developing country.

Development of a decision support system for assessing the supply chain risk mitigation strategies: an application in Indian petroleum supply chain

“…Baryannis et al (2018b) generalized the definition of SCRM (after surveying prior definitions): “as a process that encompasses the collaborative and coordinated efforts of all parties involved in a SC to reduce vulnerability and increase robustness and resilience of the supply chain, ensuring profitability and continuity.” The various stages of SCRM process consist of identification, assessment, mitigation and monitoring of risks (Baryannis et al , 2018b). Risk classification and identification have been exhaustively discussed in the SCRM literature (Christopher and Peck, 2004; Wagner and Bode, 2008; Ghadge et al , 2013; Tarei et al , 2018). There is relatively less research that examines the effectiveness of alternative SCRM strategies in the different contextual environment (Chang et al , 2015; Ayağ et al , 2013).…”

“…The search results obtained from the review are used to explore various RMEs across heterogenous case industries (summarized in Table 2). The table excludes some review papers and articles which are based on the SC risk identification and assessment phase (like Baryannis et al , 2018b; Tarei et al , 2018; Ho et al , 2015) and merely focuses on different proactive and reactive RMEs (as per the definition in Section 1). Since SCRM as a domain gained momentum after the year 2000 (Baryannis et al , 2018b), it can be observed that all the articles appear in the range of the year 2000–2018.…”

“…The oil and gas sector in India is among the six core industries of the country, and it contributes about 15% to the overall GDP of the country. (Tarei et al , 2020). The country has 635 million metric tons (MMT) of proven oil reserves (at the beginning of 2015); with almost half of the nation's sedimentary territory is yet to be investigated, the oil and gas part gives enormous opportunities for investment (US EIA, 2017).…”

“…Some of the significant risk drivers of (IPSC) are transportation (delivery system) , quality of the petroleum products , crude supply , customer ' s order , legal/political regulation, economic crisis and merger/ alliance (Tarei et al , 2018). The study mentioned above further reveals that IPSC possesses an overall risk score of 34% .…”

“…The continuous attempt to achieve profitability and the emergence of recent manufacturing practices (like globalization, single sourcing, lean manufacturing, etc. ) are pushing modern SCs toward risk (Tarei et al , 2018). The risk in SC leads to serious repercussions like inferior product quality, devastation of property and machinery, loss of firm's reputation, delivery delays (Cousins et al , 2004), manufacturing disruption (Zhang et al , 2018), conflict among various shareholders (Craighead et al , 2007) and sharp decline in firm's share price (Hendricks and Singhal, 2005).…”