Supply chain risk mitigation: modeling the enablers

TLDR

Supply chain risk management has become crucial as organizations recognize that their risk susceptibility depends on other supply‑chain constituents. The paper proposes an approach to effective supply‑chain risk mitigation by understanding the dynamics among various enablers that help reduce risk. Using interpretive structural modeling, the study presents a hierarchy‑based model of the mutual relationships among enablers of risk mitigation. The research classifies enablers into a high‑driving‑power, low‑dependence group that requires maximum attention and a high‑dependence group of resultant actions, offering managers a unique hierarchy‑based tool to focus on key variables for effective risk minimization.

Abstract

Purpose Supply chain risk management assumes importance in the wake of organizations understanding that their risk susceptibility is dependent on other constituents of their supply chain. The purpose of this paper is to present an approach to effective supply chain risk mitigation by understanding the dynamics between various enablers that help to mitigate risk in a supply chain. Design/methodology/approach Using interpretive structural modeling the research presents a hierarchy‐based model and the mutual relationships among the enablers of risk mitigation. Findings The research shows that there exists a group of enablers having a high driving power and low dependence requiring maximum attention and of strategic importance while another group consists of those variables which have high dependence and are the resultant actions. Practical implications This classification provides a useful tool to supply chain managers to differentiate between independent and dependent variables and their mutual relationships which would help them to focus on those key variables that are most important for effective risk minimization in a supply chain. Originality/value Presentation of enablers in a hierarchy and the classification into driver and dependent categories is unique effort in the area of supply chain risk management.