A decision framework for assessment of risk associated with global supply chain

Abstract

Purpose

Risk management has always been an area of concern for every global firm. The firm's supply chain management (SCM) practices are also affected by the degree of risk involved in almost all decisions. The purpose of this paper is to address the issue of assessment of risk associated with global supply chain.

Design/methodology/approach

The suggested methodology consists of two phases. The aim of the first phase is to select the location of a global facility with least risk and in the second phase, least risky configuration of supply chain is selected. The methodology adopted in the paper is demonstrated using the hypothetical case of an industrial valve manufacturing global firm.

Findings

The paper presents a tool for strategic and planning level. It supports a supply chain manager at strategic level to find the least risky location for manufacturing facility; while at the same time, the methodology supports a supply chain planning manager when selecting the least risky configuration of suppliers and distributors.

Originality/value

There are many models in the literature that addressed the issue of risk minimization in supply chain, but after an exhaustive literature review, it was noticed that there is no model that minimizes risk in locating a global facility and resulting supply chain simultaneously. The paper thus accomplishes this task by using PROMETHEE‐II and goal programming tools to suggest a decision framework for assessment of risk associated with global supply chain.

Citation

Soni, G. and Kodali, R. (2013), "A decision framework for assessment of risk associated with global supply chain", Journal of Modelling in Management, Vol. 8 No. 1, pp. 25-53. https://doi.org/10.1108/17465661311311969