Supply Risk Management: an empirical perspective on the Italian manufacturing sector
Frame of the research: This paper presents the preliminary results of a large-scale research conducted through a survey on 147 Italian manufacturing companies, which focuses on supply risk.
Purpose of the paper: Our analysis investigates two main research questions: first, to measure out how likely it is that a supply chain gets disrupted by the sudden and unforeseen interruption of supplies; second, which are the main cause(s)that can lead to such an occurrence
Methodology: We analyzed 157 such cases reported by the 147 firms in our sample.
Findings: Our preliminary results highlight that the occurrence of supply disruptions is rather frequent, and that suppliers’ financial default is by and large the most frequent single cause, being at the root of almost half of such cases. By breaking down these results by firm size and industrial sector, we uncover that both these exogenous factors have a deep influence on each of the studied effects, the occurrence frequency, and the causation.
Research limits: This study -as any other empirical research- has limitations in both the number and type of firms scrutinized and is constrained to a specific time period; however, it provides clear outcomes and robust statistical analysis.
Practical implications: Moreover, in doing so it presents managers with some critical considerations about their current curse of action regarding supply chain risk management, and how it could become more efficient and effective.
Originality of the paper: This paper fills a gap in the extant literature by supplying robust quantitative data regarding the frequency of supply interruptions and their causation
AHMED A., KAYIS B., AMORNSAWADWATANA S. (2007), “A review of techniques for risk management in projects”, Benchmarking: an International Journal, vol. 14, n. 1, pp. 22-36.
AVENN T. (1992), Risk Analysis and Management. Basic Concepts and Principles, University of Stavanger, Norway.
BLOS M.F., HOEFLICH S.L., MIYAGI P.E. (2015), “A general Supply Chain Continuity Management Framework”, Procedia of Computer Science, vol. 55, pp. 1160-1164.
BODE C., WAGNER S.M. (2015), “Structural drivers of upstream supply chain complexity and the frequency of supply chain disruptions”, Journal of Operations Management, vol. 36, pp. 215-228.
CANIËLS M.C.J., GELDERMANN C.J. (2007), “Power and interdependence in buyer supplier relationships: A purchasing portfolio approach”, Industrial Marketing Management, vol. 36, n. 2, pp. 219-229.
CIGOLINI R., COZZI M., PERONA M. (2004), “A new framework for supply chain management”, International Journal of Operations and Production Management, vol. 24, n. 1, pp. 7-41.
COLICCHIA C., DALLARI F., MELACINI M. (2011), “A simulation-based framework to evaluate strategies for managing global inbound supply risk”, International Journal of Logistics Research and Applications, vol. 14, n. 6, pp. 371-384.
COOPER M.C., ELLRAM L.M. (1993), “Characteristics of Supply Chain Management and the Implications far Purchasing and Logistics Strategy”, The International Journal of Logistics Management, vol. 4, n. 2.
EL BAZ J., RUEL S. (2021), “Can supply chain risk management practices mitigate the disruption impacts on supply chains’ resilience and robustness? Evidence from an empirical survey in a COVID-19 outbreak era”, International Journal of Production Economics, vol. 233, in the press
HALLIKAS J., LINTUKANGAS K. (2016), “Purchasing and supply: An investigation of risk: management performance”, International Journal of Production Economics, vol. 17 , Part 4, pp. 487-494.
HALLIKAS J., VIROLAINEN V.M., TUOMINEN M. (2002), “Risk analysis and assessment in network environments: A dyadic case study”, International Journal of Production Economics, vol. 78, n. 1, pp. 45-55.
HALLIKAS J., KARVONEN I., PULKKINEN U., VIROLAINEN V.M., TUOMINEN M. (2004), “Risk management processes in supplier networks”, International Journal of Production Economics, vol. 90, n. 1, pp. 47-58.
HARLAND C., BRENCHLEY R., WALKER H. (2003), “Risk in supply networks”, Journal of Purchasing and Supply Management, vol. 9, n. 2, pp. 51-62.
HECKMAN I., GOMES T., NICKEL S. (2015), “A critical review on supply chain risk - Deﬁnition, measure and modeling”, OMEGA, vol. 52, April, pp. 119-132.
HENDRICKS K.B., SINGHAL V.R., ZHANG R. (2009), “The effect of operational slack, diversification, and vertical relatedness on the stock market reaction to supply chain disruptions”, Journal of Operations Management, vol. 27, n. 3, pp. 233-246.
HOFFMANN P., SCHIELE H., KRABBENDAM K, (2013), “Uncertainty, supply risk management and their impact on performance”, Journal of Purchasing and Supply Management, vol. 19, n. 3, pp. 199-211.
HULT J.T.M., CRAIGHEAD C.W., KETCHEN D.J. (2010), “Risk Uncertainty and Supply Chain Decisions: A Real Options Perspective”, Decision Sciences, vol. 41, n. 3, pp. 435-458.
JÜTTNER U. (2005), “Supply chain risk management. Understanding the business requirements from a practitioner perspective”, The International Journal of Logistics Management, vol. 16, n. 1, pp. 120-141.
KANEMANN D., TVERSKY A. (1979), “Prospect Theory: an analysis of decision under risk”, Econometrica vol. 47, n. 2, pp. 263-291.
KROLAS P., KROLAS L. (2010), “Risk in Management Systems according to ISO Standard”, Archives of Foundry Engineering, vol. 10 Special Issue 3/2010, pp. 149-152.
MICHELI G.J.L. (2008), “A decision-maker-centred supplier selection approach for critical supplies”, Management Decision, vol. 46, n. 6, pp. 918-932.
MICHELI G.J.L., CAGNO E., ZORZINI M. (2008) “Supply risk management vs supplier selection to manage the supply risk in the EPC supply chain”, Management Research News, vol. 31, n. 11, pp. 846-866.
MICHELI G.J.L., CAGNO E., DI GIULIO A. (2009), “Reducing the total cost of supply through risk-efﬁciency-based supplier selection in the EPC industry”, Journal of Purchasing and Supply Management, vol. 15, n. 3, pp. 166-177.
MISHRA D., SHARMA R.R.K., KUMAR S., DUBEY R. (2016), “Bridging and buffering: Strategies for mitigating supply risk and improving supply chain performance”, International Journal of Production Economics, vol. 180, October, pp. 183-197.
MORGENSTERN O., VON NEUMANN J. (1944), Theory of games and economic behavior, Princeton University Press.
OJALA M., HALLIKAS J. (2006), “Investment decision-making in supplier networks: Management of risk”, International Journal of Production Economics, vol. 104, n. 1, pp. 201-213.
PERONA M., MIRAGLIOTTA G. (2004), “Complexity Management and Supply Chain performance assessment. A field study and a conceptual framework”, International Journal of Production Economics, vol. 90, n. 1, pp. 103-115.
PETTIT T.J., CROXTON K.L., FIKSEL J. (2013) “Ensuring Supply Chain Resilience: Development and Implementation of an Assessment Tool”, Journal of Business Logistics, vol. 34, n. 1, pp. 46-76.
PRANDI P. (2010), Il Risk Management. Teoria e pratica nel rispetto della normativa, Franco Angeli, Milano.
REVILLA E., SAENZ M.J. (2017), “The impact of risk management on the frequency of supply chain disruptions: a configurational approach”, International Journal of Operations and Producion Management, vol. 37, n. 5, pp. 557-576.
SODHI M.S., SON B.G., TANG C.S. (2012), “Researchers’ Perspectives on Supply Chain Risk Management”, Production and Operations Management, vol. 21, n. 1, pp. 1-13.
TANG O., NURMAYA MUSA S. (2011), “Identifying risk issues and research advancements in supply chain risk management”, International Journal of Production Economics, vol. 133, n. 1, pp. 25-34.
THUN J.E., HÖNIG D. (2011), “An empirical analysis of supply chain risk management in the German automotive industry”, International Journal of Production Economics, vol. 131, n. 1, pp. 242-249.
WAGNER S.M., BODE C. (2006), “An empirical investigation into supply chain vulnerability”, Journal of Purchasing and Supply Management, vol. 12, n. 6, pp. 301-312.
WANG Y., WENDELL G., TOMLIN B. (2010), “Mitigating Supply Risk: Dual Sourcing or Process Improvement?”, Manufacturing and Service Operations Management, vol. 12, n. 3, pp. 371-545.
WIELAND A., WALLENBURG C.M. (2012) “Dealing with supply chain risks. Linking risk management practices and strategies to performance”, International Journal of Physical Distribution and Logistics Management, vol. 42, n. 10, pp. 887-905.
WIENGARTEN F., HUMPHREYS P., GIMENEZA C., MCIVOR R. (2016), “Risk, risk management practices, and the success of supply chain integration”, International Journal of Production Economics, vol. 171, part 3, pp. 361-370.
ZSIDISIN G.A., PANELLI A., UPTON R. (2000) “Purchasing organization involvement in risk assessments, contingency plans, and risk management: an exploratory study”, Supply Chain Management: An International Journal, vol. 5, n. 4, pp.187-198.
ZSIDISIN G.A. (2003), “Managerial perceptions of supply risk”, Journal of Supply Chain Management, vol. 39, n. 1, pp. 14- 25.