Qualitative Research on Business Requirements for Supply Chain Risk Management (SCRM) from a Practitioner Perspective in Alabama
A Dissertation Presented in Partial Fulfillment of the
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Department of Doctoral Studies, Colorado Technical University
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Abstract
Keywords: Supply chain risk management (SCRM), qualitative research
Acknowledgments
Table of Contents
Chapter 1: Introduction……………………………………………………………………………………………………. 1
Study Problem …………………………………………………………………………………………………….. 1
Study Purpose………………………………………………………………………………………………………. 2
Research Question……………………………………………………………………………………………….. 2
Hypothesis(es)……………………………………………………………………………………………………… 3
Conceptual Framework…………………………………………………………………………………………. 3
Significance of the Study……………………………………………………………………………………….. 4
Researcher Positionality and Reflexivity………………………………………………………………….. 4
Delimitations and Limitations………………………………………………………………………………… 5
Definition of Terms………………………………………………………………………………………………. 6
Chapter Summary………………………………………………………………………………………………… 6
Chapter 2: Review of the Literature………………………………………………………………………………….. 7
Literature Search Strategies………………………………………………………………………………….. 9
Supply Chain Risk Management……………………………………………………………………………. 10
Risks Categories and Types………………………………………………………………………………….. 11
Definitions…………………………………………………………………………………………………………. 11
Supply Chain Risk Management (SCRM) Strategies………………………………………………… 16
Supply Chain Risk Management Process……………………………………………………………….. 17
Business Requirements for Supply Chain Risk Management……………………………………. 23
Supply Chain Robust Strategies…………………………………………………………………………….. 26
Gaps in the Literature…………………………………………………………………………………………. 32
Conclusions………………………………………………………………………………………………………… 32
Chapter Summary………………………………………………………………………………………………. 32
Chapter 3: Method………………………………………………………………………………………………………… 34
Research Method……………………………………………………………………………………………….. 34
Design……………………………………………………………………………………………………………….. 36
Population and Sample………………………………………………………………………………………… 36
Data Collection Instrumentation and Procedures……………………………………………………. 37
Data Analysis Procedures…………………………………………………………………………………….. 38
Validity and Reliability………………………………………………………………………………………… 38
Ethical Assurances………………………………………………………………………………………………. 39
Chapter Summary………………………………………………………………………………………………. 39
Chapter 4: Findings………………………………………………………………………………………………………… 41
Description of the Study Sample…………………………………………………………………………… 41
Results………………………………………………………………………………………………………………. 41
Discussion of Study Findings…………………………………………………………………………………. 41
Chapter Summary………………………………………………………………………………………………. 41
Chapter 5: Discussion and Conclusions…………………………………………………………………………….. 42
Limitations of Study Findings………………………………………………………………………………… 42
Summary of Findings…………………………………………………………………………………………… 42
Interpretation of Study Findings……………………………………………………………………………. 42
Practice Implications of Study Findings………………………………………………………………….. 42
Recommendations for Further Research……………………………………………………………….. 43
Conclusion…………………………………………………………………………………………………………. 43
References……………………………………………………………………………………………………………………. 44
Appendix A: [Insert title]………………………………………………………………………………………………… 45
Appendix B: [Insert title]………………………………………………………………………………………………… 46
Appendix C: [Insert title]………………………………………………………………………………………………… 47
List of Tables
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List of Figures
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Supply Chain Risk Management (SCRM), is a systematic approach to identifying, assessing, and managing risks throughout the supply chain. It is designed to help organizations mitigate the impact of disruptions and other risks on their business operations. Supply Chain Risk Management offers management measures for aiding companies to elevate their operational efficacies (Herold et al., 2021). The framework generates an aptitude of improving customer service, alleviating costs and improving overall company performance and business image.
Supply Chain Risk Management (SCRM) is descriptive of the measures applied for aiding the companies to effectively handle commodity flow. The aspect amalgamates all possible procedures that are significant for steering transformative changes of the baseline raw materials into finished commodities (Herold et al., 2021). The applied processes encompass improved planning, management outsourcing, procurement, effective conversions, together with logistic functionalities. The core reason for SCRM’s applied strategies is to elevate the organization’s competitive edge within the market industry (Herold et al., 2021). Also, SCRM’s functionalities help enhance continuous quality improvement through rigorous threat and risk management, improved safety, and continuity, together with elevated reputation.
Supply chain risk management (SCRM) is a relatively new field that is gaining in popularity (Choudhary et al., 2022). The context is since organizations become more aware of the risks associated with their supply chains (Vaio et al., 2022). The basis is since within the past ten years, various companies have been undergoing uncertainties in regards to unrecognized supply chain susceptibilities coupled with interferences. There are internal and external forms of disturbances that affect normal and required high-end organizational process performances.
One form of internal interferences may be in the form of possible disturbances for the organization’s internal process operations. Another disturbance may be exhibited by baseline changeovers in management style. Another disturbance may be due to a lack of attraction or retention of important and highly performing workforce teams, together with the applied business process measures (Vaio et al., 2022). A failure to effectively put in place contingency plans for countering challenges and returning the company to former if not improved process actions is another possible disturbance that may be experienced.
Another internal disturbance may be due to a lack of proper implementation of cyber-security protocols coupled with regulations for offering in-depth security against malware alongside big data breaches. A failure to properly and extensively conform to the underlined market, industry and environmental laws coupled with labor laws may be another form of disturbance (Vaio et al., 2022). Another disturbance may be initiated by a lack of sufficient supply of goods and services that meets the needs of available customers and target consumer base.
External threat disturbances may be due to unforeseen consumer needs. Another external threat disturbance may be because of interferences in raw materials and finished commodities. Social, government, together with economic-founded elements such as terrorism is another cluster of possible external interference (Zhang et al., 2021). Another external disturbance may be due to a lack of proper supplier risk management framework, such as poor regulatory compliance. Another external disturbance may be linked to natural disasters or health pandemics such as the COVID-19 outbreak.
The underlined possible internal and external disturbances to required normal and high-end organizational processes led to challenges that affect vendors, suppliers, shipping agents, resellers, together with other possible stakeholders. The issues are significant for causing critical disturbances in goods and services production. The issues also cause problems to business operations, and sales together with critical projects (Zhang et al., 2021). Also, the highlighted internal and external disturbances may steer reduced quality outcomes, reduced extents of accountability, together with prominence conflicts.
One example of a critical supply chain threat is elevated prices due to related supply, demand, currency uncertainty, together with customs tariffs. The elevated prices consequently hamper financial projections coupled with profitability aptitudes for the organizational processes. Another example of a profound supply chain threat is raw material and finished products short-term and long-lasting shortages (Zhang et al., 2021). Long-lasting shortages are experienced when the suppliers resort to stop a supply of primary and essential materials.
Reduced and damaged supply chain associations are another form of supply chain threats that damages the retention chances of highly-performing supply chain teams. Quality failure is another example of a supply chain threat, which is steered by a lack of attainability of specific shipment expectations coupled with performances (Zhang et al., 2021). Possible sudden supply shock is another example of a supply chain threat that be activated by pandemics such as Covid-19. Delivery failures are another example of a supply chain threat due to logistical challenges, and damaged packages.
When compared to even three years ago, the current business climate is unprecedented in its volatility. The context is due to global uncertainties that may stem from natural disasters such as earthquakes and health pandemics (Zhang et al., 2021). Volatility within supply chain is descriptive of unintended disparities of top stream alongside downstream raw and finished material flow. The outcome is a misalignment of supply and demand within the focal firm.
This is because of the volatile character of external environments, which has an impact on a wide range of business processes. The outbreak of the COVID-19 pandemic is an excellent illustration of how this kind of event may disrupt worldwide operations across many different industries (Vaio et al., 2022). The COVID-19 pandemic led to numerous country-wide lockdowns that immediately or slowly hampered the former smooth flow of raw or finished materials. As a result, there was an in-depth disturbance of production, leading to the problem need for supply chain management to come up with resolute and efficient strategies for elevating supply chain resilience within a short time.
The external disturbance caused by the COVID-19 pandemic also generated the critical issue need of promptly developing robust network frameworks. The network frameworks would act as the basis for ensuring effective, robust and continuing associations with the consumer base, suppliers, together with other involved parties. The main context would be the necessity for immediately incorporating emerging technologies such as predictive analytics through artificial intelligence (Vaio et al., 2022). The technological innovation change would also be required while at the same time ensuring that retention of highly-performing workforce is maintained to evade high workforce turnover rates.
Therefore, it is essential for supply chain managers to constantly innovate by investing in the creation of new methods of transporting goods to customers (Maheshwari et al., 2020). This requirement therefore highlights the need for incorporating data analytics that is amalgamated with predictive analytics. Managers and leaders would benefit from this because it would increase their familiarity with and ability to make use of big data, which might come from a variety of organized and unstructured sources (Maheshwari et al., 2020). The other case involves moving administrative programs (Khan et al., 2020). Supply chain managers would greatly benefit from these if they were able to boost predetermined fleet actions for more closely monitoring the physical flow of goods.
Companies operating in the global economy must strike a balance between the needs of various groups of investors, customers, and employees if they are to succeed. This encompasses the balancing of material, ethical, and spiritual concerns (Vaio et al., 2022). Furthermore, developing new frameworks that can endure environmental changes requires an in-depth comprehension of how environmental, societal, and economic variables impact the supply chain (Khan et al., 2020). Supply Chain Resilience (SCR) varies depending on the distribution outcomes within the supply chains and the subjective value of each (Herold et al., 2021).
The context is since different forms of threats affecting different market industries mirror the extent of exposure to varying forms of risk shocks. Also the risk tend to be reflective of the baseline susceptibleness that are encompassed for the organization (internal risk factors), together with the entirety of the company’s value propensities (Zhang et al., 2021). In the current highly dynamic business environment, there exist numerous unforeseeable outcomes that pose a risk to the global supply chains (Bak, 2018). Supply Chain Resilience (SCR) continues to be more complex in global supply chains creating a need for more responsive strategies to manage the risks.
This project explores the vulnerability of multinational manufacturing organizations’ supply chains from a practitioner perspective to identify business requirements for supply chain risk management (SCRM),
Problem of Study
The problem of study is associated with the need for identifying approaches to mitigate internal and external risks to supply chain process efficacies. Challenges and possibilities in supply chain management are common to the international business community (Hendry et al., 2019). Issues include lead times as a result of consumers’ rising expectations for faster deliveries; service interruptions leading to longer shipment times; and cash flow complications related to global logistics. Other issues include accountability issues, including the potential for image damage and legal complications; quality control and defects as a result of variations regarding acceptable defect extents across countries (Hendry et al., 2019).
Supply chain managers can establish and increase the firms’ competitive advantage by overcoming a myriad of challenges such as unreliable suppliers, government regulations, and other environmental elements that may disrupt the supply chains (Kilpatrick, 2020). Multinational organizations can improve their supply chain resilience through the establishment of operations in different countries and regions. However, not all of these organizations can overcome all the challenges; for instance, a company like Honda was able to strengthen its supply chain to ensure that the customers received their products in a timely and consistent manner (Sustainability report, 2018). This was achieved through the integration of social, environmental, and governance perspectives into the development of supply chain management strategies.
This ensured that Honda improved both its logistics and purchasing practices. Similarly, Apple was able to diversify its supply chain to allow multiple suppliers from different geographical regions to provide similar components (“case study of Apple’s supply chain,” n.d.). By ensuring that the company maintains long-term agreements with several third-party suppliers, Apple has been able to secure raw materials of strategic value while utilizing its position to negotiate pricing terms with different suppliers. Another example is the supply chain strategy by Zara where the firm improves its agility to enable its reaction to change consumer demand. The organization can collect customer feedback through its already established network of suppliers, designers, and customers who have a close relationship with the organization (Chowdhury et al., 2021). Having such relationships ensures the organization can collect accurate and timely feedback to enable it to provide the customers what they want exactly when they want it. These are some of the examples to indicate the challenges and strategies organizations use to overcome global SCR.
This evidence-based research is founded on ascertaining appropriate measures for increasing the awareness of the underlying needs of businesses’ supply chain frameworks. The basis is through the consideration of the use of supply chain risk management per attainable qualitative literature. This helps advance the profession as a whole by improving risk identification. The objective is to conduct a risk analysis of potential adverse events that might disrupt the supply chain process. And when you include in the significance of the underlying consequences, you have something quite remarkable. Macro-level risks, demand risks, manufacturing risks, supply risks, financial risks, data risks, and generic hazards will all be discussed in this document. In addition, we’ll be working to lessen concerns about macrorisks, demand risks, manufacturing risks, supply risks, transportation risks, monetary risks, data risks, and more generally, risks (Valle & Oliver, 2021).
Enhancing the cognizance of supply chain needs helps elevate identification approaches of how the supply chain system functions. The functionality of the supply chain system can be assessed within the ever-changing and unpredictable world settings, such as in the context of the COVID-19 pandemic. The basis is through companies being empowered to reshape the baseline worldwide strategies for supply chain systems (Karmaker et al., 2021). As a result, the organizations can be able to comfortably adapt to longstanding supply chain sustainability for effectively handling possible future issues in supply chain systems.
Risk identification can be facilitated by developing a Service Supply Chain (SSC) framework that is used for the automobile industry, in the frame of a circular economy. There can be an evaluation of the impactful indicators of the SSC model enactment. The context helps in assessing the improvement possibility of the supply chain system within the automobile industry (Karmaker et al., 2021). Specific aspects that can be taken into consideration include social sustainability measures such as consumer needs, health coupled with safety within the work settings, salaries, together with personnel’s compensation (Karmaker et al., 2021).
Unlike quantitative research that relies on numeric data, the qualitative research method would utilize words, thoughts, and opinions to conceptualize new SCRM concepts and theories. Using online databases such as Elsevier, Springer, Emerald, Wiley, and Google Scholar, the study would collect and examine peer-reviewed texts, such as books, reports, and journal articles that assist in the answering of the research questions. These sources would have to be not older than ten years to ensure that only recent knowledge is captured in the research study (Wang & Cheng, 2020). Using a reasonable number of texts, the research would examine relevant articles that address the relationship between business requirements and supply chain risk management, with a greater focus on the manufacturing sector.
Primary research would necessitate the use of literature review for the impact of the COVID-19 pandemic on supply chain sustainability in China. The context is for determining appropriate procedures for checking known and unknown supply chain risks. The literature review would be founded on checking specific metrics that can be utilized for countering interlinked social, environmental, economic, together with environmental effects of supply chain activities (Karmaker et al., 2021). As a result, there would be the generated basis for enhancing the social, economic-founded together with environmental results of companies.
In this regard, there would be the utilization of the Service Supply Chain (SSC) framework. The service supply chain framework is used for conveying goods together with services through a fixation on the enhancement of service quality coupled with consumer satisfaction rates. The SSC would in this context be utilized for mitigating supply chain threats coupled with vulnerabilities. The threats and vulnerabilities may involve environmental hazards coupled with labor shortages (Karmaker et al., 2021). These contexts act as primary facilitators for elevating organizational processes stability, while limiting possible delays alongside costs of manufacturing and distribution strategies.
Unknown risks depict forms of threats that are not readily determined. Carrying out the cross-sectional study would enable the creation of a framework for appropriately setting probability scales for elevating responsive measures when the threats actually occur. The basis is through the development of robust fortifications coupled with improved threat-awareness (Wang & Cheng, 2020). Threat awareness is enabled through the development of structured issue-tackling apparatuses that appropriately handle the unknown threats through a process-based approach.
The initial step involves a determination alongside documentation of the unknown threats. The next step involves a creation of the best form of supply chain threat handling framework that ascertains low to top risk elements. The next step involves continued tracking of the identified threats (Hermoso-Orzaez & Garzon-Moreno, 2022). The next step involves the institution of governance alongside frequent reviews for mitigating problem-solving actions, and enhancing resilience coupled with agility of the baseline supply chain framework.
Professionally, the research will advance the SCRM literature on three dimensions: 1) the adequacy of risk management tools and processes; 2) the depth of understanding of those tools within the manufacturing organization; 3) business continuity planning in supply chain management. The findings of the study would be used to show how organizations have been reliant on traditional risk management tools/processes to curb risks in their supply chains such as brainstorming, scenario planning, impact analysis, critical path analysis, supply chain mapping, assessment of the customers’ business importance, and assessment of the suppliers’ business importance.
Concerning continuity of the business, the findings would inform business planning to ensure multinational organizations develop contingency plans that are tailored to the company’s needs and entail disaster recovery planning for the most critical supply chain areas. Further, the study’s findings should espouse the critical issues impacting SCRM implementation. For example, they should indicate the relationship-related aspects of SCRM implementation and the strategy-related aspects. Ideally, four issues should emerge: 1) the openness of business executives to share risk-related information; 2) the willingness of business managers to accept supply chain risks; 3) organizational awareness of the supply chain strategy’s risk implications; 4) the willingness to entrench supply chain transparency.
Regarding scholarship, the findings should further knowledge of SCRM by presenting the business requirements from a practitioner perspective, they should provide a rationale for an integrated approach to SCRM by proposing a structure to guide further research, and should underscore the centrality of contemporary supply chain strategy elements and their risk implications. These implications include the globalization of supply chains, inventory holding, centralized production and distribution, outsourcing, and the supplier base.
esearch Questions
The following are some of the questions that will potentially be answered by this study:
Q1. How can multinational manufacturing organizations leverage inclusive business models to support supply chain management?
Q1hat are the critical issues impacting SCRM implementation in a manufacturing organization?
The qualitative systematic literature review (SLR) approach was used as the research strategy for this study. When dealing with phenomena, qualitative research methods come in handy since they provide a more in-depth and nuanced examination of a variety of experiences, relationships, and behaviors (Bak, 2018). This implies that there is no need for any kind of statistical or mathematical analysis of raw data. To address these two problems, we use a text-based research strategy.
The conceptual framework would guide research on relationship management, information sharing, and outsourcing to examine how they influence operational performance. The study will have five independent variables and one dependent variable. Throughout the study, the research will investigate how strategic supplier relationships, information sharing, customer relationships, outsourcing, and logistics influence supply chain resilience, thus affecting the multinational business performance.
This process would be multistage involving a detailed analysis of the risks identified. However, due to the risk of unforeseeable risk and other surprises, the SCRM strategies would be examined in the context of flexibility, resilience, and recovery. Despite having many researchers identifying SCRM models, various risks, and the effect on the supply chain, more research is required to formulate a better risk management strategy. for instance, this study would include research on SCRM integration strategies that would enable multinational organizations to increase their value, measure that value, and the best practices to achieve the goal. This conceptual framework will be used as a reference for the framework of this dissertation when analyzing research findings.
The study is expected to determine the impact of risk drivers on supply chain practices and risk management strategies in multinational organizations. In addition, the study will determine how firms deal with supply chain disruption by developing risk management techniques that improve the supply chain’s resilience and agility to improve the organization’s competitive advantage. Also, the research will examine how risk management capabilities allow a multinational organization to influence the firm’s operations, financial performance, and corporate reputation.
Using qualitative methods, the research will be able to investigate how manufacturing and logistic industries are affected by the negative impacts of supply chain disruptions in the global context. This is because such supply chains are prone to be affected by both internal and external environmental factors. This study would be in a position to develop an in-depth understanding for both practitioners and academics regarding the drivers, capabilities, and best practices that influence business performance in multinational organizations.
Researcher Positionality and Reflexivity
There exists no relationship to the research topic. The topic was selected to examine how organizations were dealing with disruptions and how this affected the customer experiences. In this regard, the idea of unsatisfied customers led to the need to investigate how multinational organizations can better improve their provision of products and services during adverse natural or manmade events such as pandemics or natural disasters. Having no direct association with the industry ensures that the research process continues to be objective. However, consistent and frequent reflection exercises are expected to be utilized to ensure personal values, beliefs, and background does not impact the research process.
Supply chain risks are risks that can disrupt the flow of goods and services in the supply chain. These risks can come from a variety of sources, including natural disasters, political instability, and cyberattacks. SCRM is a process that helps organizations identify, assess, and mitigate risks in the supply chain. SCRM can help organizations avoid disruptions and minimize the impact of disruptions when they do occur. The COVID-19 pandemic has had a significant impact on the supply chain. Many organizations have been forced to diversify their supply chains in order to mitigate the risks associated with the pandemic.
The study will focus on finding out how SCRM strategies influence supply chain performance and the overall business operations. This will involve the identification of studies that investigate multinational supply chains and examine how they improve the quality of services and products, reduce costs, ensure delivery to the customers, and improve agility. The study will not determine the effectiveness of any SCRM modeling.
The limitations of this study include those that challenge systematic literature reviews. For instance, the study will only be as reliable as the reliability of the primary studies. To improve this, the research will utilize more scholarly research articles, fewer literature reviews, and grey literature sources.
To investigate SCRM strategies in the global environment, six variables were identified. These would allow the researchers and the readers to develop an understanding of the SCRM strategies utilized in the international supply chains to improve business performance. These include customer relationships, information sharing, logistics, operational performance, outsourcing, and supplier relationship. The definitions of these terms are presented below.
Supply Chain Risks
Supply chain risk is reflective of the probability for damage or jeopardy that is elevated due to security threats that are caused by suppliers, the baseline supply chains, together with commodities.
Supply Chain Risk Management (SCRM)
Supply Chain Risk Management (SCRM) is descriptive of the procedure that is facilitated in the determination, evaluation, coupled with mitigation of threats towards a company’s supply chain framework.
COVID-19 Pandemic
COVID-19 can be defined as a form of sickness that arises due to the novel coronavirus (severe acute respiratory syndrome coronavirus SARS-CoV-2). The illness is spread out within the community setting through contact and the air that people breathe. As a result, there was the directive for stopping the spread through quarantine and wearing of masks and use of hand sanitizers. Many industries got affected which in turn affected the supply chain networks.
Supply Chain Diversification
Supply chain diversification is reflective of the action measures that are used for elevating choices of determining the best times for making orders of specific suppliers for bringing commodities to the industry market. The context helps in highlighting the excessiveness of suppliers bringing specific products.
Customer Relationship
Customer relationship is the collaboration between the organization and its customers to manage the interactions to improve the business.
Information Sharing
Information sharing is the collaboration among supply chain partners through sharing of important information that may be useful when making better operational decisions that affect the utilization of resources and lowering of costs.
Logistics
Logistics involves the control, planning, and movement of goods and services from where they are produced to the final destination.
Operational Performance
Operational performance is the amalgamated outcome originating from different factors and enablers in the supply chain system.
Outsourcing
Outsourcing is the handing over of processes within the supply chain to outsiders to provide those services.
Supplier Relationship
Supplier relationship is the strategic affirmations with the firms that supply the business with services and goods.
This chapter provides the background of the study including the general objectives. Starting with the research problem and purpose statements, the chapter progresses to introduce the research question. The conceptual framework of the study is described both in narrative form and using a chart. Also, the chapter describes the significance of the study and the researcher’s positionality and reflexivity. Some of the expected delimitations and limitations have also been highlighted. Lastly, the definitions of the terms to be have been included to allow the readers to understand the study variables.
Chapter 2: Review of the Literature
The COVID-19 pandemic affected worldwide supply chain frameworks, and there was a lack of sufficient analytic data to promptly evaluate the associated impacts. The context was through internal and external organizational disturbances such as high turnover rates, need for promptly incorporating technological innovations such as predictive analytics and need for preventing malware attacks due to increased internet usage. As a result, there is the in-depth necessity of enhancing supply chain visibility (Zhang et al., 2021). The concept is critical for offering extensive oversight to competency hindrances that harm the supply chain framework and the overall performance of organizations within the specific market industries. Consequently, there can be a generated improved aptitude of Supply Chain Resilience (SCR).
A systematic review of the relevant literature is planned to be conducted in three key phases. The researcher will begin by examining several internet resources, including the university library, to locate relevant material. Subsequently, the researcher will do a literature review and critical analysis, extracting the most relevant data for the investigation. Step one in effective supply chain risk management is recognizing the overarching problems and determining the solutions to those problems. Ultimately, the researcher will create a review of the relevant literature by categorizing results in light of the study topic. For data collection and analysis, the researcher will review the texts and locate evidence in support of the topic under study
The review methodology consisted of an exhaustive literature search of relevant articles addressing supply chain risk management. Most of the articles selected were pertinent to international supply chain management and manufacturing issues. The literature search strategies used were utilized to locate significant material related to the scope of the research study. Conducting the search allowed for the research to evaluate aspects of the strategic risk management processes in supply chain management, examining the obvious and not-so-obvious (Fan & Stevenson, 2018; Rostamzadeh et al., 2018; Shahbaz et al., 2020; Shahbaz et al., 2018; Singh & Hong, 2020). Regarding this, the goal of the search was to conduct a focused search that remains relevant to the subject matter. All the materials obtained related directly to supply chain risk management among multinational organizations and how they utilize best practices to overcome the issues in a global context.
For this study, keywords were used to search and locate materials related to the subject. These words include terms like risk management, supply chain risk management, multinational organizations, global supply risk, risk approach, global supply chains, business requirements, supply chain risk mitigation, and supply chain sustainability (Golicic et al., 2019; Hu et al., 2019; Kırılmaz & Erol, 2017; Koberg & Longoni, 2019; Moshood et al., 2021; Nath et al., 2019). The literature review is divided into sections with each discussing a significant topic. However, the first section provides a background review to expand the understanding of the concept of risk and how it relates to supply chains.
The Covid-19 pandemic
Uncertainty has recently been gaining popularity due to the increase in complexity of supply chains in the global economy. In recent years, the performance of companies has been affected leading to the increase in the literature investigating supply chain disruptions and how they can be managed to reduce risk. The Covid-19 pandemic exposed vulnerabilities of many firms that had a high dependence on China to fulfill their need for finished products or raw materials (Fierro Hernandez & Haddud, 2018; Kilpatrick, 2021. The basis is through swift transformations of the need for using technological innovations such as Artificial Intelligence to ascertain how the balance between supply and demand for finished products is impacting the consumer base. Another context is through the need for incorporating technologies that would help the present workforce, and not necessarily lead to them losing their jobs.
This has made many organizations rethink and implement transformations to their global supply chain models (Kilpatrick, 2021). Considering that more than two hundred companies classified under the Fortune Global 500 firms had been depending on the dominant role of China as their factory, significant disruptions were experienced during the pandemic (Kilpatrick, 2021). Scholars believe that effective supply chain management allows an organization to improve its performance and value to be able to compete competitively in the global market. Thus, supply chain risk management (SCRM) is an enabler to secure and improve the competitive advantage.
Competition
The rapid development of business competition in recent years has intensified efforts to improve efficiency in various aspects of a business. This has led to significant investments being made to address the risks and uncertainties. Global companies are expected to improve their ability to anticipate supply, demand, and internal uncertainties to better develop a sustainable supply chain management system (Dias et al., 2021; Golicic et al., 2019; Gouda & Saranga, 2018). Remarkably, it is not just the external uncertainties that pose a threat to the global SCRM, but also the increasing complexity of supply chain structures that have been observed to vary in mechanisms in how they are initiated in businesses. Such trends like outsourcing have become common, thus introducing a new form of uncertainty (Herold et al., 2021). In this regard, when organizations rely on outside organizations to supply the raw materials, there exists a risk of the materials being delivered late.
The concept may be due to the generated need on consumers to seek economically meriting commodities. Also, there may be the requirement for looking for non-expensive coupled with highly productive supply sources. The developed multifaceted interdependencies do not highlight the underlying threats coupled with susceptibilities to a specific organization’s competitive advantage over the rest (Herold et al., 2021). Conflicts also arise due to a reduced supply of raw materials or finished products in some areas as compared to others.
Risk
Risk has always been a critical issue in supply chain management, for instance, literature has always examined the relationship existing among supply chains and price uncertainties, demand volatility, and time lead reliability of the suppliers. As a result, this has led to organizations considering inventory pooling, order splitting, and having safety stocks (Lochan et al., 2021). Consequently, further complication has resulted from the adoption of global contracting of manufacturers and suppliers such as delays in receiving payments and lengthy reconsipliation processes in some areaas as compared to the rest (Nath et al., 2019)nterestingly, numerous journals and articles have been published in the last five years reviewing SCRM. This has led to various categorizations of supply chain risk factors, risk classifications, risk management methods, and research gap identification. Yet, articles reviewing all SCRM topics are very few. To fill the gap, this review of literature presents a comprehensive review of all relevant empirical, theoretical, seminal, and grey literature published within the last three to five years.
Supply chain risk refers to the exposure to both external and internal shocks arising from the supply chain. These shocks consist of deviations that lead the supply chain to move away from its initial objectives (Adeseun et al., 2018; Alkhudary et al., 2020; Bhatti & Bhatti, 2019; Gouda & Saranga, 2018). Such a deviation leads to a decrease in the value of all supply chain activities at all levels (Ghadge et al., 2019). This means that the potential variation of how supply chain outcomes are distributed affects their likelihood and subjective values (Colicchia et al., 2019; Son, 2018; Pournader et al., 2020). In this regard, supply chain risks can be perceived to have two classifications, operational and disruption. When the risk is categorized as operational, it refers to the risks that affect the quality, capacity, supply and demand, information, flow, and exchange rates (Colicchia et al., 2019; Le-roy et al., 2020; Naz et al., 2021). On the other hand, disruption risk occurs from natural and manmade disasters (Parast & Shekarian, 2018). Therefore, it is possible to work on the operational risks, but disruption risks are less controllable.
Supply Risk
Multinational organizations are exposed to supply risk, which is associated with the various links to their supply chains. For instance, upstream links include suppliers, supply networks, and relations between suppliers and purchasers. As a result, the possibility that an event would be linked to the incoming supply would result in an impact on the cost, quality, and safety of the product obtained from the suppliers (Daghar et al., 2020; McMaster et al., 2020; Patrashkov & Suresh, 2020). In this regard, the probability that the products would not satisfy the customer needs increases.
The potential of risk arises from the process of movement of material from the supplier to the organization, sourcing, and buying or making decisions. Further, supply risk includes aspects of supplier reliability, which sometimes consists of misinterpretations of the ability of the supplier, lack of effort, or conflicting business goals (Dias et al., 2020; Patrashkov & Suresh, 2020; Rajagopal et al., 2017; Wieland et al., 2020). In this case, when decisions are made regarding sourcing from multiple suppliers, both the pros and cons of such a strategy may be transferred to the supply chain (Dias et al., 2020). Therefore, supply risk can be considered to be an inter-organizational endeavor to collaborate and utilize qualitative and quantitative methods of risk management when identifying, evaluating, mitigating, and monitoring unexpected external and internal level events or conditions that might adversely impact any aspect of the supply chain. It is these undesirable consequences that attract the need for its management.
Threats to Rightful Information
Information in a technologically advanced world is shared and processed at higher speeds than in traditional markets. The development of the internet allows the sharing of information to be more transparent (Zekhnini et al., 2020). However, any problems that may arise from the use of information technologies are also transferred to the supply chain as a risk (Fischer-Preßler et al., 2020; Patrashkov & Suresh, 2020). The dependence on technology and information systems in the global supply chain management results in a vulnerability in case the systems break down or experience problems (Fischer-Preßler et al., 2020; Ino & Watanabe, 2021; Pandey et al., 2021). For instance, if a third party gained access to the systems, they would potentially steal or destroy intellectual property, thus disrupting the supply chain (Patrashkov & Suresh, 2020). Additional risks include incorrect data entry processes that may lead to inaccurate information being shared with the suppliers or other relevant stakeholders. As a result, decisions made using inaccurate information would not be efficient, thus exposing the supply chain to a risk of inefficiency.
Global supply chains are exposed to major security risks that may include third parties accessing confidential information and execution of malicious attacks that may destroy the hardware, leading to the supply chain becoming unable to share critical information needed for supply chain operations to continue as desired. According to research, the results of the inefficient and ineffective exchange of information processes may result in the organization generating high costs in transactions, especially from suppliers and other external customers (Le-roy et al., 2020; Patrashkov & Suresh, 2020). In contrast, the risks of inaccurate information sharing can be mitigated by the use of information technologies that make it easier for stakeholders to access processes and databases to obtain or input the information required to achieve supply chain objectives (Colicchia et al., 2019). In comparison with traditional methods of information processing and sharing methods, the use of information technology systems such as the enterprise resource planning (ERP) system reduces the time required for transactions to be completed while increasing the accuracy of the information generated (Patrashkov & Suresh, 2020). This is because the systems create a virtual supply chain that allows easier product tailoring, improved integration, better customer service, increased agility, reduced transaction costs, and provides information in real-time (Jajja et al., 2018; Schroeder & Lodemann, 2021; Zhu et al., 2017; Zhu et al., 2021). The problem arises when the systems are exposed to a third party with malicious intent or when the systems fail to work as expected. This results in the concept of information risk where information may be compromised leading to inaccurate data being shared, thus hindering optimal decision making-processes.
Demand Risk
Demand risk refers to the interruptions that disrupt the downstream supply chain operations. These may result in the physical distribution of products to the customers being hindered. For instance, the risk of drivers’ going on strike, restriction of movement, vehicle breakdowns, or delays in the distribution centers may lead to a demand risk (Patrashkov & Suresh, 2020). Additionally, customer demands may cause risk, especially where these demands are uncertain such as in the global markets (Lochan et al., 2021; Muñoz-Torres et al., 2020). Therefore, demand risk occurs when organizations are unable to match their forecasted demand to the actual demand requirements. Such inconsistencies may arise from inaccurate information or poorly coordinated supply chain networks.
Financial Risk
Multinational organizations face significant financial risks. For instance, the companies are affected by the exchange rates regarding profits, marketing, supplier choice, and operation costs (Patrashkov & Suresh, 2020). When prices fluctuate, it may be due to two reasons. The first would be exchange rates and the second would be as a result of lack of raw materials. Thus, the international market remains sensitive to the exchange rates thus making the entire supply chain vulnerable.
Bureaucratic Risk
Global supply chains are greatly affected by authorities in the international context. This brings about uncertainties that result from unpredictable regulations, administrative requirements, and legislation (LeBaron & Lister, 2021; Lochan et al., 2021; Patrashkov & Suresh, 2020). When countries change their legal requirements, companies operating under the jurisdiction of those laws must conform to the new guidelines. These guidelines may include laws and policies that govern supply chain practices and operations. Failure to adhere to the requirements may result in the company being unable to obtain permits that would allow the setting up of supply chain networks. Such bureaucratic risks are sudden and difficult to predict, thus posing a risk to the global supply chains.
Operational Risk
Operational risk refers to the internal risks that come from the organization’s inability to produce goods or provide services, achieve the required quality, or attain performance goals. These risks may be linked to the organization’s inefficient and ineffective infrastructure, equipment, processes, or human-centered issues (Duong & Ha, 2021; Gupta et al., 2020; Mishra et al., 2019; Patrashkov & Suresh, 2020). Disruptions that may be caused by labor shortages, industrial accidents, or vandalism are categorized as human-centered (Richards & Seifan, 2021). On the other hand, accidents consist of equipment breakdowns or utility disruptions, such as water or electricity outages. Such cases result in the organization’s supply chain experiencing reduced capacity and even variation in the quality of products produced or services provided.
Catastrophic Risk
Catastrophic risk is the type of risk posed by events such as epidemics. The events that cause such risks are powerful enough to have a severe impact on the area where they occur. For instance, terrorist attacks, natural hazards, civil unrests, or political instability (Richards & Seifan, 2021). The damage caused by such catastrophic events leads to physical and monetary inconveniences to the global supply chains (Alazzaz, 2021). Investment in technologies that gather data and predict natural events such as cyclones, drought, volcanic activity, and thus reduce the impact on business operations. As a result, strategies should be developed to safeguards the organization’s interests.
Supply Chain Risk Management (SCRM) Strategies
SCRM refers to the organizational strategies and plans implemented to curb the impacts or manage the supply chains through constant risk assessment and reduction of vulnerabilities. Considering that not all supply chains in international trade have similar risks, there has been a need to develop SCRM strategies that are tailored to specific industries (Chaudhuri et al., 2018 Gurtu & Johny, 2021; Rauniyar et al., 2021). The global supply chains consist of numerous organizations that share a common goal, which is a value addition to the services and products offered to the customers. It is critical to understand that the more parts a supply chain have, the more risk it exposes the organization to in the global market (Gurtu & Johny, 2021; Wang et al., 2020). This means that the SCRM should be a systematic approach that is used to identify, evaluate, rank, mitigate, and monitor any potential disruptions in the supply chains.
Research shows that traditional forms of supply chain consisted of shorter product cycles and thus resulted in simple flows of products from suppliers to manufacturers. However, with the concept of globalization, there has been a need to expand the abilities of businesses. As a result, organizations are expected to adopt new supply chain and outsourcing strategies to reduce costs, increase competitive advantage, and enter new markets (Ansari et al., 2020; Chaudhuri et al., 2018; Dias et al., 2020; Kwak et al., 2018; Oliveira et al., 2019). It is these new strategies that result in changes that would be useful in optimizing global operations.
Supply Chain Risk Management Process
SCRM processes assist in the identification and assessment of risks that can be averse to the performance and continuity of the supply chains. The supply chain risk management process consists of four stages including risk identification, risk assessment, risk mitigation, and risk monitoring. It is through the development of these four processes that global supply chains can become robust and resilient in a dynamic global market (El Baz & Ruel, 2021; Kusi-Sarpong et al., 2019; Munir et al., 2020; Sáenz et al., 2018; Qazi et al., 2018). These four processes comprise the risk management framework used to reduce risk in the world today.
Risk Identification
The first step has been determined to be important in the process of identifying the risk the organization faces. At this stage, researchers indicate it is critical to first identify the type of risk and the risk events that caused it. As a result, the organization should determine whether the risk causing disruptions is internal or external. This first step is the most important in the development of a risk management plan because risk management is not necessarily to reduce the negative effects of a phenomenon, but also to improve competitive advantage while allowing the organizations to determine risk from both activity-based and objective-based perspectives (Patrashkov & Suresh, 2020). From an activity-based perspective, the organization should be able to develop a functional goal for interventions, such as to minimize delays, while the objective-based perspective should allow for the identification of specific risks that can cause delays.
Identifying risks as well as their sources improves the firm’s capability to manage risks. In this vein, researchers have explored the various characteristics of supply risk that can allow risk managers to better contend with the risks they encounter during the management of global supply chains. With the knowledge of such characteristics, the managers would be able to develop better and more effective strategies to address the issues (Fierro Hernandez & Haddud, 2018). However, literature suffers a shortage of risk identification models. Some of the strategies suggested by existing research include the analytic hierarchy process (AHP) methodology, developing a supply chain vulnerability map, or qualitative models that are value-focused (Carpitella et al., 2021). Further, some researchers categorize risks into three broad categories including general risks, environmental risks, and industrial risks.
Risk Classification
Risks allow firms to clarify the dimensions that are relevant to various uncertainties. In addition, categorization further allows the definition of the risks according to their representative factors (Gouda & Saranga, 2018). For example, the financial risk category can be classified into four sub-categories where one includes the exchange rate risk. In this sub-category, there are three additional risks, namely translational, transactional, and competitive risks (Gouda & Saranga, 2018; McMaster et al., 2020). As observed in the example, classifying risk into more specific categories allows the risk managers to specify the distinct characteristics of a specific risk, and are thus able to implement the most effective risk management approach. According to Gouda & Saranga (2018), there can be three classifications of risk including inbound risk, process risk, and shipment risk. Inbound risk refers to the supply risk that emanates from disruptions from the supplier’s end. Process risk results from the failures or disruptions that emanate from within the organization. Lastly, shipment risk is the risk that is based on the disruptions related to the distribution or shipping of the products. Risk classification is also essential for the next step, which is risk assessment.
Risk Assessment
The next step after identification is risk assessment where organizations have been observed to assess the significance of the consequences. This means that the probability of the risk occurring is determined, which further informs on whether to acknowledge the probability or neglect the possibility of the event occurring especially if it is determined to be unlikely (Kummer et al., 2018; Patrashkov & Suresh, 2020; Zhao et al., 2020). In this process, only those risks that have a high chance of occurring are awarded the highest priority (Abdel-Basset, 2019). As a result, the organization can build its resilience if a risk disrupts its supply chain. In the assessment process, the risk managers have to understand the risk during an assessment to assist the company towards investing in the most appropriate mitigations. This improves resilience whenever the supply chain is faced with similar risks in the future.
Resilience in supply chain management is the firm’s ability to recover its initial performance after experiencing and absorbing the impacts of disruptions (Bier et al., 2019; Ivanov, 2017). Building resilience requires the development of four principles: supply chain engineering, collaboration, agility, and management culture. The engineering principle refers to the mapping of the supply chain structure that covers all the members of the supply chain including suppliers, distribution channels, and the final consumers (Jabbour et al., 2020). Mapping the structure allows easier identification of potential bottlenecks that could pose a threat to the flow, visibility, and capacity of the production processes. Also, procurement strategies would be of assistance in the development of a resilient supply chain (Jabbour et al., 2020). This is because decisions related to sourcing could determine whether the firm could cope with potential disruptions affecting suppliers.
Supply chain collaboration refers to the adaptability and flexibility of the supply chain in terms of sharing of information to increase visibility and reduce risks. Jabbour et al. (2020) suggest that to create a common understanding of the supply chain strategy, it would be necessary for the various parties involved to collaborate. Collaboration yields benefits such as sharing of outputs from the economic, political, social, and technological analyses, risk assessments or the supply and demand, and processes between members would result in the creation of a community perspective necessary for the creation of common goals (Jabbour et al., 2020). These common goals can be shared and progress monitored through effective communication channels.
The third principle, supply chain agility, is divided into velocity and visibility sections. According to a study by Jabbour et al. (2020), velocity refers to the reduction of the end-to-end time between production and delivery of products and services. It is preferred that this period be reduced significantly for the supply chain to be considered effective. Thus, mapping allows the value stream to be examined to identify the processes or activities that can be reduced or eliminated to improve efficiency (Jabbour et al., 2020). Additional strategies to improve agility include the reduction of batch sizes, more efficient layouts, and the reduction of versatile workforces and equipment to improve flexibility in the event disruptions occur. On the other hand, visibility is the ability to monitor the flow of materials to determine whether the production, procurement, ad delivery schedules would be met (Jabbour et al., 2020). The utilization of information systems would be beneficial in the real-time analysis of the flow of materials to adjust planning accordingly.
The final principle is the supply chain risk management culture that should be developed to be part of the organization’s routine. The aim would be to develop an organizational culture that is built to be resilient in times of challenges such as risk-level events (Jabbour et al., 2020). This would require the development of a risk management team that would use current and past information to develop a system that collects and stores data and long-term events.
According to the literature, all firms must maintain flexibility and redundancy to overcome the impacts of disruptions (Duong & Ha, 2021; Katsaliaki et al., 2021; Shou et al., 2018; Tordecilla et al., 2021). To achieve this, organizations rank the risks in the supply chains, projects, products, and other areas of interest using a matrix (Moazzam et al., 2018; Singh et al., 2019). The results are then color-coded to assist managers to determine the frequency and consequence of each category of risk. This provides a visual representation of the risk and the need for immediate attention or lack thereof. The assessment should help determine both external and internal environmental risks.
Risk Assessment Measurement Tools
Evaluating the various risks has been indicated to require an evaluation of the organization’s performance. In the context of global supply chains, the assessment would require the location of parts that are most susceptible to risk and identifying the level of damage that would be manageable in case of a risk event (Bak, 2018). To achieve such an objective would require the risk managers to quantify the probability of occurrence and the magnitude of the impact of the risk event on the performance of the supply chain. When it would be possible to predict the likelihood of a risk occurrence from historical data, the effects of a risk event could be quantified using financial terms, strategic terms, or operations terms (Zhu et al., 2021). In such cases, financial terms would include aspects such as loss of revenue or the value at risk. Strategic terms could include loss of goodwill or loss of market share. Finally, the operational terms that can be used could include the number of production days lost or the number of customers not served as a result of the disruption (Alazzaz, 2021; Bak, 2018). Use of scenarios, frequency data, and subjective probabilities could also be used to quantify risk measures. Several researchers have identified the impact of demand volatility on the management of the inventory (Alazzaz, 2021; Zhu et al., 2021). In this regard, there have been suggestions that the firms should always determine new ways to reduce the safety stock. For instance, implementing information systems that allow the supply chain team to continuously update customer preferences reduces the safety stock significantly, which leads to significant savings.
Risk Mitigation
Another aspect of risk management suggested in the literature is the mitigation of risk after the process of risk assessment. Following assessment, the SCRM is expected to implement appropriate mitigation strategies to address the risks after they are assessed (Gouda & Saranga, 2018). Mitigation involves the reduction of the impact resulting from a supply chain risk. This means that the organization may develop plans that are either oriented to decrease the probability of the risk occurring or have a plan that enables the company to react to the impact after the risk affects the supply chain (Baryannis et al., 2018; Patrashkov & Suresh, 2020). Some of the strategies risk managers utilize include maintaining multiple transportation modes, multiple sources, supplier certification, contingency plans, assortment planning, dynamic pricing, and disruption task forces (Gouda & Saranga, 2018). These strategies are categorized into buffering actions classification where activities and processes that measure and minimize risks occurring from suppliers are planned. These are reactive and preventative risk mitigation strategies aimed to reduce the negative effects of disruption and reduce the probability of the risk event reoccurring (Gouda & Saranga, 2018). Nevertheless, preventative risk mitigation strategies provide benefits before a risk event occurs while reactive strategies benefit the organization after the risk event has impacted the supply chain. Therefore, organizations have been encouraged to develop mitigation for each type of risk identified before a risk event occurs.
Risk Monitoring and Control
There has been limited literature regarding monitoring and control, especially in supply chain risk management in comparison to risk assessment and risk mitigation techniques. This indicates that there exists a need to conduct further research on risk monitoring and control in supply chains (Bak, 2018; Kusi-Sarpong et al., 2019; Patrashkov & Suresh, 2020). Developing a framework that would help organizations identify warning signs that indicate a change in product quality remains critical to avoid the risk of not meeting the customer requirements.
Business Requirements for Supply Chain Risk Management
In the global economy, SCRM allows organizations to expand to different international locations while reducing their vulnerability and risk dimensions. According to Dias et al. (2020), some of the advantages of going global include access to cheap labor and access to new sources for raw materials, resulting in high revenues. Also, in the international market, global organizations are strategically aligned to have access to other markets that would be challenging if in their native countries. However, research has indicated that additional risks accompany these benefits (Dias et al., 2020). Such challenges include interruption of flows, exchange rates, and export/import regulations.
According to Adeseun et al. (2018), supply chain risks face endogenous risks, which originate from the business activities associated with the supply chain operations. Other risks are exogenous, referring to the external risks resulting from the environment in which the business operates. Conversely, additional research indicates that SCRM is affected by about four main components including risk drivers, sources of risk, consequences resulting from risk, and risk mitigation. The risk drivers ensure organizations increase competitive pressure in the markets to either decrease or increase the vulnerability of the supply chain (Adeseun et al., 2018). Another risk is the vulnerability of the supply chain resulting from the inability to control all variables. According to existing literature, sources of risk can be any variable that can disrupt the supply chain resulting in negative consequences. According to Gurtu and Jonny (2021), the scale and rate of risk recurring in the business environment continue to increase requiring organizations to be more robust. Due to the unlimited number of variables, there are different categories of risk (Adeseun et al., 2018). The result includes uncertainty that originates from the inability to coordinate different activities and partners (Le-roy et al., 2020). However, all these risks have to be mitigated depending on the different manifestations of risk in the businesses’ supply chains.
Son (2018) suggests about three methods of managing SCRM risk. These include either sharing or transferring risk to insurance companies, reducing or avoiding risk, and accepting the risk together with its consequences. In this case, risk can be defined as the potential to have varied outcomes that could decrease the value of the supply chain (Le-roy et al., 2020). To achieve risk acceptance, all stakeholders must be involved so that the best decision can be made concerning risk-taking and stakeholder interests (Son, 2018). However, the organization would further be required to determine whether the risks should be addressed in the short term or the long term. For instance, in the short term, the organization adopts solutions that reduce the risk or its impact enough to make room for a better intervention to be developed. The second strategy is to adopt strategies that ensure the company would be able to recover from the risks better in the future (Son, 2018). This indicates that risk management follows four main paths including identification, assessment, mitigation, and monitoring.
Further, Le-roy et al. (2020) examine risk management as a process that ensures businesses manage the risks or face a downward spiral of their share prices. Failure to effectively manage risk can result in the organization’s stock market price reducing by approximately 10 percent leading to firms associated with the disruption lowering their stock returns by up to 40 percent compared to their competition in the respective industries (Le-roy et al., 2020). As a result, companies can collapse leading to the need to develop effective SCRM strategies that protect businesses and their operations. These are tools strategies and methods utilized to minimize risk and achieve the organization’s goals. When businesses implement SCRM strategies, they can create competitive advantage because the risks are known, controlled, and managed (Le-roy et al., 2020). Additionally, significant cost savings are realized from the implementation of SCRM strategies regarding the businesses’ reputation, brand, market share, and sales loss.
The changing customer needs and preferences have led to additional demands such as higher quality products, a high level of services, and reduced prices. According to Gurtu and Jonny (2021), such demands can lead to additional problems resulting from inefficient communication among the supply chain partners. As a result, inefficiencies are realized especially where there arise fluctuations in demand, changes in technology advancements, changing regulations, and a reduction in the supplier base (Gurtu & Jonny, 2021). The effect on the performance of businesses is mainly the inability to achieve the organization’s strategic goals. To address the problem, it is expected that SCR managers should work on improving efficiency and effectiveness through the development of a solid business understanding of the various drivers of performance especially improvement in the exchange of information among critical stakeholders.
Supply Chain Robust Strategies
To accurately measure the probability of disruptions, the organizational strategies must have two main properties namely efficiency and resilience. Efficiency refers to the ability to manage operational risks despite disruptions (Calvo et al., 2020; Schluter & Hetterscheid, 2017). On the other hand, resiliency allows the organizational strategies to manage risk to sustain the crucial operations even when a major disruption occurs while enabling the supply chain to recover faster after (Dias et al., 2021; El Baz & Ruel, 2021; Golicic et al., 2019; Sudusinghe & Seuring, 2020; Woong & Goh, 2021). As a result, robust supply chain strategies allow multinational organizations to reduce risk while enabling the organizations to cope with disruptions. With the growing pressure, supply chains have displayed a need to have sustainable strategies to identify, assess, mitigate and monitor risks. According to a vast body of research, focusing on economic, social, and environmental performance requires sustainable operations in supply chain designs, inventory management, technology selection, and reverse supply chains (El Baz & Ruel, 2021; Gouda & Saranga, 2018; Sudusinghe & Seuring, 2020; Woong & Goh, 2021). According to Gouda & Saranga (2018), there exists a relationship between supply chain risk and supply chains in a sustainable business environment. The researchers suggest that the firm’s ability to manage and understand its social, environmental, and economic risks within the supply chain is referred to as supply chain risk management
Sustainability of Global Supply Chains
In the supply chain, sustainability refers to the process of making decisions and planning to integrate social, environmental, and economic factors to improve the supply chain operations. It has also been observed that when the aspects of transparency, stakeholder engagement, and risk management are integrated into the supply chains, sustainability is achieved (Kusi-Sarpong et al., 2019). As a result, sustainable supply chains require high levels of social responsibility, transparency, and improved working conditions to ensure efficiency in business operations. To achieve this, the existing practices, products, techniques, processes, and systems would have to be modified or replaced to ensure social or environmental harm is reduced. Such strategies could include better waste management techniques such as recycling, developing green designs, or energy-efficient processes that have a reduced impact on the environment and social structures.
In recent years, there has been a need to adapt the supply chains to the current Covid-19 pandemic. In this case, organizations are expected to make changes to their environmental sustainability, social innovation, and technological strategies to achieve sustainability now and in the future. When facing environmental risks, organizations are presented with opportunities and risks (Sarkis, 2020). For instance, organizations can develop strategies to ensure the problems of today are met while ensuring that the future generations would be in a position to meet their own. An example is reducing gas emissions during production. Such an effort would be achievable with the support of technologies such as the internet of things (IoT), cyber-physical systems (CPS), cloud computing, and cognitive computing. According to Sarkis (2020), such technologies also help supplement human decisions to improve accuracy. Therefore, integrating technology into SCRM practices leads to the sustainable development of businesses in the global sector.
Implementing innovative strategies to the supply chains allows for the organizations to prevent the issues causing negative operations impact on SCRM. According to Gupta et al. (2020), sustainable supply chain management (SSCM) allows for the identification and ranking of existing barriers that inhibit the company’s ability to innovate, adapt, and upscale its supply chains to the current markets. SSCM achieves this by reducing the impacts caused by the barriers to achieving positive outcomes through the improvement of efficiency in all social, environmental, and economic processes. Integrating sustainability into the supply chains improves how organizations adhere to government sanctions, market pressures, customer demands, and social activism. Additionally, public awareness concerns are addressed through identification, evaluation, and ranking of innovative strategies that allow a better understanding of the problem. Such strategies could include investment in emerging technologies or improving employee motivation to support green practices.
Since global chain supplies extend far beyond the boundaries of one country, the social, economic, and environmental protection goals should be adapted to suit all geographies and tiers. Such is a result of having to manage multiple suppliers and buyers with different legislative obligations and requirements on how to conduct their operations (Koberg & Longoni, 2019). Instead of having to develop such strategies from nothing, Nath et al. (2019) suggest three isomorphic pressures that should be understood to ensure improvement with little effort. The first is the mimetic pressure that would allow an organization to successfully copy what their competitors have been doing to succeed in the global market. This allows the organizations to seek legitimacy when implementing successful strategies that have been tested by others (Nath et al., 2019). The other is the coercive pressure that allows formal or informal organizations to apply pressure on others depending on their size and dominance in the market. When utilized successfully, an organization can ensure that others depend on it to secure the market share. This could mean that no additional strategies should be developed since the smaller organizations would do the greatest work for the dominant firm. Finally, the normative pressure ensures that common practices that have been normalized by experts and professionals within the industry are legitimized (Nath et al., 2019). These key pressures and mechanisms require organizations to implement the defined sustainability practices that have been established by the dominant figures in the industry to ensure success.
The problem with the aforementioned strategies is that they cannot be generalized. As a result, it is required that the sustainability standards be contextualized. According to Golicic et al. (2019), the definition of social sustainability, for instance, should be flexible enough to allow the establishment and operationalization of SCSS in specific contexts. However, to allow organizations effectively address hotspots of social, economic, and environmental aspects at the sectoral level, the SSCM should be extended along the supply chains to reveal an inclusive picture of the impact sustainability measures to ensure they are not biased (Muñoz-Torres et al., 2020). Further, Wang et al. (2020) state that in the global market, transnational expansion increases complexity that extends to affect performance. To account for this, organizations should use the input-output modeling approaches that are based on both the input-output (MRIO) model and the data envelopment analysis (DEA) techniques. This would allow firms to effectively capture the sustainability activities as well as their impact on multidimensional transnational GSCs, which allows for the firms to account for the complexity.
SCRM and Environmental Sustainability
Supply Chain Risk Management and Environmental Sustainability are interrelated in that various forms of environmental hazards negatively impact supply chain frameworks. Examples include poor waste handling practices, poor end of life commodity disposals, climate changes due to global warming from carbon emissions, and careless sourcing of raw materials. To increase the firm’s competitive advantage, firms have been depending on natural resources. Numerous researchers have identified the relationship between sustainability and the superior market, financial, and cost performance associated with it.
As a result, firms have been investing in sustainability strategies to gain a competitive advantage. Additionally, these firms can reduce risks significantly. For instance, developing supply chains that ensure reduced emissions and life-cycle costs, which allows the firms to excel in other areas f competitiveness, especially since the investment in environmentally sustainable efforts results in the adoption of sustainable production techniques that contribute to the reduced use of hazardous materials, which otherwise would pose a risk of disruption across the supply chain (Gouda & Saranga, 2018; Koberg & Longoni, 2019; Muñoz-Torres et al., 2020; Rostamzadeh et al., 2018). Since sustainability strategies require complex technical knowledge, the efforts result in a workforce that is highly capable of addressing environment-related risks, which in turn saves the company from dealing with disruptions due to bad press. As a result, the organizations that invest in sustainable strategies get to enjoy benefits internally and externally.
SCRM and Social Sustainability
Social sustainability has been determined to have a significant impact on the competitive advantage. Considering that the employees are some of the key resources within an organization, firms should understand that supply chain operations would not be successful without the skill set and expertise of the workforce (Gouda & Saranga, 2018). As a result, it is possible to reduce supply chain disruptions by investing in best practices in human resources management. For instance, providing better work-life balance, health, and safety would ensure that the firm’s workforce improves performance, has reduced turnover rates, and minimal cases of absentees would be reported (Gouda & Saranga, 2018). Because the work environment would be better, the employees would tend to perform better, thus reducing the risk of disruption in the supply chain.
SCRM and Supplier Sustainability
Investing in supplier sustainability does not only benefit the suppliers, but also the organization itself. Sustainable practices and processes are developed after the identification of various sustainability-related risks. When a firm invests in the identification, assessment, and development of supplier-related practices, it can assist in the improvement of sustainability practices at the supplier’s end. As a result, the supplier would be more likely to implement sustainable practices leading to the supplier’s improved ability to meet all regulatory and quality requirements (Bier et al., 2019; El Baz & Ruel, 2021; Katsaliaki et al., 2021). If the organization fails to support its suppliers, it would be probable that the suppliers would not implement sustainability strategies, thus creating the risk of reputational damage that would likely result in product recalls and operational disruptions (Alazzaz, 2021; Bier et al., 2019; El Baz & Ruel, 2021; Katsaliaki et al., 2021; Parast & Shekarian, 2018; Zhu et al., 2021). Also, the knowledge acquired while improving supplier sustainability can also be adapted to the organization to improve organizational robustness in both internal and external environments.
The review of the literature presents the existing research by clearly analyzing the risks, sources of risk, scopes, and dimensions of SCRM. Sustainable innovation in the supply chains is subject to further research. This is because most of the existing research only sets the initial stages for future investigation and practical application of sustainable innovation (Wieland etl., 2020). For instance, environmental risks have not been investigated thoroughly and need to receive more attention. In this case, there should be a further investigation into the governance mechanisms that are related to the demand/market, supply, and technological risk. Kırılmaz & Erol, 2017). Additionally, evaluation of the outcomes resulting from the collaboration will increase the performance of all supply chain partners and the whole supply chain perspective.
Conclusion
This literature review contributes to the current understanding of SCRM strategies and the processes used to ensure effective management of risks. In the current study, research represented indicate that mapping the supply chain management structures remains paramount in the identification of various aspects that could pose disruption risks in the supply chain. As firms endeavor to manage supply chain risks, it is critical that the firms investigate their definitions of risk and also the relationship between sustainability and supply chain risks. This paper provides some of the definitions that are clearer and more specific than a majority of existing ones. This enables a common understanding between researchers and practitioners. his review would not only help researchers understand the SCRM strategies better, but also help in the identification and measurement of the likelihood and impact of supply chain risks ensuring efficient selection of management methodologies.
Chapter Summary
The literature review examines studies that have studied the concept of SCRM to ensure both the cost and competitive advantages. This chapter presents the review of existing literature and the literature search strategies employed to collect relevant material for the review. In this chapter, the study examines the supply chain management strategies, risk categories, types and definitions of keywords. Further, SCRM strategies, processes, business management requirements, robust strategies, and existing gaps in the literature are described. As a result, within the context of the practitioner, the number of studies analyzed indicate that there should be additional strategies to ensure multinational organizations minimize risks and as a result costs.
The problem is that the volatile business environment increases the risk for supply chains requiring businesses to develop new strategies to increase resilience and agility for supply chains. To address this, there will be a carrying out of a literature review further understand the business requirements of SCRM from a practitioner perspective and how it can improve production leading to an increase in sales in business organizations. A systematic review is needed to fully address the conceptual issues. In this section, a theoretical model will be developed where the research questions will be examined to define the type of studies to be included ad what type of data would be extracted (Karmaker et al., 2021). Afterward, additional empirical evidence will be collected using keywords, duplicates removed from the results, relevant articles selected, coding, and finally analysis of the selected literature for reporting.
There would be the application of a mixture of quantitative and qualitative research methodology. The combined research methodology would incorporate the Total Interpretive Structural Model (TISM) within a fuzzy environmental measure for evaluating the hierarchical association within the drivers of supply chain sustainability. The drivers under focus will be social sustainability measures such as consumer needs, health coupled with safety within the work settings, salaries together with personnel’s compensation, and environmental hazards (Karmaker et al., 2021). As a result, there would an additional classification of the specific drivers per the foundation of influential professional opinions coupled with Pareto analysis.
The applied methodology would further involve and enhanced clustering of the identified drivers into four stages that would then be evaluated through the utilization of the fuzzy MICMAC STRATEGY. The application of the Pareto based fuzzy TISM is because of its ease of differentiating between extraneous alongside critical constituents. Also Pareto fuzzy TISM allows for an ease of facilitation of decision-making competency that allows swift expression of the extent of influence for a specific constituent as compared to another constituent while applying fuzzy numerical units (Karmaker et al., 2021)
The study design selected for this study is non-experimental. This is a descriptive form of research design that describes a situation or phenomenon as it stands without manipulation of the variables. The study would utilize meta-analysis techniques, which involve qualitative analysis of independent primary studieshat focus on the same question and aim to generate a quantitative estimate of the phenomenon under study (Tawfik et al., 2019). An example of such a phenomenon could be the effectiveness of an intervention. In qualitative analysis, meta-analysis attempts to conduct a rigorous secondary qualitative analysis of primary qualitative findings. The purpose is to provide a comprehensive description and an assessment of a specific phenomenon regarding the influence of the method of investigation on findings (Karmaker et al., 2021). The systematic review/meta-analysis would include the development of a research question, its validation, criteria, search strategy, and the importation of all results to a data analysis program for full-text screening. Therefore, the design is suitable for identifying overall trends in studies that have common results.
The target for this study is Chinese organizations from the considered evidence-based journal that have established operations in different countries and geographic regions (Karmaker et al., 2021). The types of literature selected would have to consist of strategies used by organizations in the reduction or avoidance of risk in their supply chains. Industries where strategies such as outsourcing, just-in-time production, supply base reduction, and manufacturing of products with short life cycles are utilized face major risks ()(Karmaker et al., 2021). These organizations and their best practices are the target population for this study since they would be in a position to employ the identified strategies to reduce risk in their supply chain management.
Regarding the sample, the study would include a sample of as many peer-reviewed and grey literature studies as possible. The inclusion and exclusion criteria would involve the fuzzy TISM step approach for increasing the awareness of the association between the considered drivers. The initial phase involved the highlighting of the fuzzy scale that would be significant for revealing the baseline contextual associations (Karmaker et al., 2021). The second phase involved a creation of aggregated structural self-interaction matrix (SSIM) per reactions from professionals.
The third phase involved an analysis of SSIM coupled with development of the eventual reachability matrix. The context was through making conversions of linguistic terms to fuzzy triangular linguistic units. The fourth phase involved carrying out calculations of the baseline driving powers coupled with dependence within MICMAC analysis. The fifth step involved carrying out level partitioning acquired from the reachability matrix (Karmaker et al., 2021). The sixth phase involved the development of the fuzzy-TISM diagrams. The inclusion criteria will be the contextual relationships between the drivers. The exclusion criteria would be the linguistic teams (No Influence (N), Very Low influence (VL), Low Influence (L), High Influence (H), and Very High Influence (VH) The second stage involves the categorization of articles selected into the final sample..
Data Collection Instrumentation and Procedures
The literature will be identified, selected, and analyzed using a systematic literature review method based on Prakash et al. (2017) and Fan and Stevenson (2018). The unit of analysis includes research publications published in English and peer-reviewed journals. Additionally, the process of data collection would be conducted in three stages. The first stage includes the process of locating studies and sampling relevant articles. The studies were searched in major academic databases such as Emerald, Science Direct, Wiley, Google Scholar, Taylor & Francis, and Sage using keywords. The sample would be consolidated manually to eliminate duplicates and unrelated articles. The second stage involves the categorization of articles selected into the final sample. The articles would be categorized per the impact felt for supply chain networks at the height of the COVID-19 pandemic from 2021. Finally, the third stage is the synthesis step. This is where the information in the selected sample is synthesized to extract the relevant information needed to answer the research questions.
This data collection procedure aligns with the systematic literature review method of study. As a result, articles detailing the strategies used by multinational organizations to reduce or avoid supply chain risks would be categorized for easy analysis.
The pool of articles would be analyzed based on the categories developed in previous sections. The process follows seven steps that are categorized into three major stages. The first step includes question formulation. To review the literature, the process would be guided by the two major research questions. This would enable the researcher to determine which articles to include and the type of information to extract. The second step would be searching the literature using keywords, using the research questions as guides, and the methodology would involve an extensive literature search in some of the major databases. The third stage involves the removal of duplicates. The fourth stage would involve the removal of articles that have been published more than five years ago. Also, articles that are less relevant including those that focus mainly on accounting and economics would be removed. This is an approach adopted by Fan and Stevenson (2018).
The fifth and the sixth stages would include capturing other relevant articles such as those found on google scholar. Finally, full-text analysis and coding would follow in the sixth stage. Here, the process would involve coding articles according to context, industry/sector, theory, research methods, research perspectives, and SCRM (Fan & Stevenson, 2018). The research perspective would be broken down into sub-categories. The analysis would allow the use of both deductive and inductive methods. Also, the process would involve the validation of the final set of codes.
In the context of validity and reliability, the systematic literature review process would be able to maintain the validity and objectivity of the study process. However, the researcher would have to adhere to the structured process outlined in previous sections (Fan & Stevenson, 2018). In this study, the research would involve the selection of research articles and their classification using standardized classification schemes. Once the classification scheme would be finalized, all relevant articles would be coded. Any article whose classification would appear to be ambiguous would be removed.
During the research, some of the ethical assurances include the protection of privacy of the individuals and organizations included in the research. Another assurance would be avoiding deception and exaggeration about the objectives and aims of the research study. Other items to include consist of any funding received or any form of affiliations and reporting of any conflicts of interests. Misrepresentation of primary data or any communication should be avoided to increase transparency and honesty. Finally, acknowledgment of the works of other others will be presented in form of the APA referencing system following the dissertation guidelines.
The chapter describes the research method utilized to conduct the study in form of a systematic literature review. The research takes on a naturalistic approach where the variables are examined in their natural environment. Further, the research design used is non-experimental since no variables will be manipulated in the course of the study. The sample and target population for this research include organizations that implement strategies to reduce or avoid supply chain research. However, only secondary sources are used for the study. More than 80 articles are considered for the research study. The data collection procedures include those utilized when conducting systematic literature reviews. This study includes a seven-step process from research question identification to the presentation of results. Also, as long as all the structures are followed, the reliability and validity of the data would be preserved. Finally, the chapter ends with some of the ethical assurances that the research would adhere to provide to ensure to minimize risk to participants.
The introduction to Chapter 4 includes a clear transition into the chapter and the introduction content directly follows the chapter 4 heading with additional heading for the introduction content. The introduction should restate the study purpose and briefly restate the study problem with citation as aligned with Chapter 1.]
Description of the Study Sample
[In this section, restate the target population, sampling method used, and final sample size. Provide an APA formatted and appropriate demographic characteristics for the final sample as relevant using APA-formatted frequency tables. For secondary/archival data studies with no identifying data, provide a summary of the final study sample for the dataset gathered.]
[The results presentation is guided by APA guidelines for the presentation of quantitative findings as well as the conventions and expectations of the method choice and the degree program for the presentation of research findings within scholarship. Present results from data reliability testing, key descriptive statistics, and inferential statistical testing or modeling, as applicable.]
[Present an objective analysis of the study findings in context with the current scholarship and synthesized into a coherent discussion. Include results from hypothesis testing to frame the discussion.]
[Close chapter with a concise summary of the chapter contents.]
Chapter 5: Discussion and Conclusions
[The introduction to Chapter 5 includes a clear transition into the chapter and the introduction content directly follows the chapter 5 heading with additional heading for the introduction content. The introduction should restate the study purpose and briefly restate the study problem with citation as aligned with Chapter 1.]
[Present a description of any limitations of the study findings caused by recruitment or sampling challenges, limitations to generalizability or transferability, limitations of data trustworthiness and/or reliability, or other reasons that may have limited study findings. The discussion will include a justification for the value and/or rigor for the study findings in spite of the limitations noted.]
[Include a summary of the findings presented in Chapter 4. The overview should be concise and aligned with the study research question(s) and associated hypotheses. Include key statistical values, such as p-values, while minimizing other extraneous statistical data.]
Interpretation of Study Findings
[As a continuation to the section above, describe the inferences drawn from the study findings in relation to current scholarship. This discussion includes the contributions of the study findings to the current scholarship and practice. All claims must be well supported by the findings or current scholarship. Explicitly address how study findings add to the body of knowledge.]
Practice Implications of Study Findings
[Present a well-organized and coherent discussion of the inferences for the application of the study findings. The discussion must clearly address the problem in relation to practice and the implications of the study findings related to the study problem from a practice-based perspective.]
Recommendations for Further Research
[Present the recommendations for future research in this section. Present each recommendation as the next step in the research and include a specific method and design for each recommended study. Each recommendation must also be supported by the study findings and current scholarship.]
[Briefly recap key statements to include the study purpose, research question, and methods. Subsequently, present a concise summary of the study findings, the applicability of the study findings to practice, and the recommendations for future research. This section should be approximately 2 pages in length.]
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