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Procurement risk management under uncertainty: a review

Zhen Hong (School of Mechanical Aerospace Engineering, Nanyang Technological University , Singapore)
C.K.M. Lee (Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University , Hunghom, Hong Kong)
Linda Zhang (IESEG School of Management, Lille, France)

Industrial Management & Data Systems

ISSN: 0263-5577

Article publication date: 6 September 2018

Issue publication date: 28 September 2018

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3441

Abstract

Purpose

The purpose of this paper is twofold, first providing researchers with an overview about the uncertainties occurred in procurement including applicable approaches for analyzing different uncertain scenarios, and second proposing directions to inspire future research by identifying research gaps.

Design/methodology/approach

Papers related to supply chain risk management and procurement risk management (PRM) from 1995–2017 in several major databases are extracted by keywords and then further filtered based on the relevance to the topic, number of citations and publication year. A total of over 156 papers are selected. Definitions and current approaches related to procurement risks management are reviewed.

Findings

Five main risks in procurement process are identified. Apart from summarizing current strategies, suggestions are provided to facilitate strategy selection to handle procurement risks. Seven major future challenges and implications related PRM and different uncertainties are also indicated in this paper.

Research limitations/implications

Procurement decisions making under uncertainty has attracted considerable attention from researchers and practitioners. Despite the increasing awareness for risk management for supply chain, no detail and holistic review paper studied on procurement uncertainty. Managing procurement risk not only need to mitigate the risk of price and lead time, but also need to have sophisticated analysis techniques in supply and demand uncertainty.

Originality/value

The contribution of this review paper is to discuss the implications of the research findings and provides insight about future research. A novel research framework is introduced as reference guide for researchers to apply innovative approach of operations research to resolve the procurements uncertainty problems.

Keywords

Citation

Hong, Z., Lee, C.K.M. and Zhang, L. (2018), "Procurement risk management under uncertainty: a review", Industrial Management & Data Systems, Vol. 118 No. 7, pp. 1547-1574. https://doi.org/10.1108/IMDS-10-2017-0469

Publisher

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Emerald Publishing Limited

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