Selecting the right supply chain based on risks
Journal of Manufacturing Technology Management
ISSN: 1741-038X
Article publication date: 31 May 2013
Abstract
Purpose
The purpose of this paper is to propose a model that enables a company to select the supply chain strategy based on risk probability p (measure of how likely/often a detrimental event occurs) and risk impact i (expression of the significance of a loss when that event occurs).
Design/methodology/approach
This paper discusses four supply chain strategies: agility, robustness, resilience and rigidity. Mathematical models are used for the strategies' cost functions, which reveal optimal solutions and break‐even points in dependence of p and i.
Findings
This paper proposes that resilience is appropriate in the case of high supply chain risk probability and impact, and rigidity if both values are low. When only risk impact is low, robustness is optimal, whereas agility is optimal when only risk probability is low.
Research limitations/implications
This research extends existing models for selecting the appropriate supply chain strategy.
Practical implications
Knowledge of the interplay between the strategies' cost functions and risk probability and risk impact is vital for companies. This may encourage managers to become more familiar with their strategy costs and supply chain risks.
Originality/value
To the author's knowledge, no corresponding model exists so far that links risk impact and risk probability to the four supply chain strategies.
Keywords
Citation
Wieland, A. (2013), "Selecting the right supply chain based on risks", Journal of Manufacturing Technology Management, Vol. 24 No. 5, pp. 652-668. https://doi.org/10.1108/17410381311327954
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited