Approaches to managing global sourcing risk

Martin Christopher (Cranfield School of Management, Cranfield, UK)
Carlos Mena (Cranfield School of Management, Cranfield, UK)
Omera Khan (Hull University Business School, University of Hull, Hull, UK)
Oznur Yurt (Department of Logistics Management, Izmir University of Economics, Izmir, Turkey)

Supply Chain Management

ISSN: 1359-8546

Publication date: 15 March 2011

Abstract

Purpose

Global sourcing can bring many benefits to organisations, but it can also expose them to a number of risks. The purpose of this study is to understand how managers assess global sourcing risks across the entire supply chain and what actions they take to mitigate those risks.

Design/methodology/approach

A multiple case study approach was used, involving 15 cases in seven different industries. Each case consisted of interviews with managers directly involved in the global sourcing decision, supported by documentary evidence. A cross‐case analysis was conducted to analyse patterns across different industries.

Findings

The study revealed that most companies do not have a structured supply chain risk management and mitigation system. Nevertheless they do use a number of informal approaches to cope with risk. The paper proposes that a multidisciplinary approach is required when dealing with global sourcing risks. It presents a classification of risks covering four categories: supply risk, process and control risks, environmental and sustainability risks, and demand risks.

Originality/value

The paper addresses a research gap concerning managers' approaches to assessing and mitigating supply chain risk in a global context. In this context, this study proposes a new categorisation for global sourcing risks and offers a characterisation of global sourcing risk mitigation strategies applicable to different industries.

Keywords

Citation

Christopher, M., Mena, C., Khan, O. and Yurt, O. (2011), "Approaches to managing global sourcing risk", Supply Chain Management, Vol. 16 No. 2, pp. 67-81. https://doi.org/10.1108/13598541111115338

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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