A hybrid approach for quantifying supply chain risk and prioritizing the risk drivers: A case of Indian petroleum supply chain
Journal of Manufacturing Technology Management
ISSN: 1741-038X
Article publication date: 5 February 2018
Issue publication date: 28 March 2018
Abstract
Purpose
The purpose of this paper is to identify various risk and sub-risk drivers that affect the supply chain (SC) performance and to propose a framework to quantify the overall SC risk index by considering the importance of each risk and sub-risk drivers and their mutual interactions.
Design/methodology/approach
A hybrid method based on decision-making trial and evaluation laboratory and analytical network process has been proposed to develop the risk quantification framework. A case study of Indian petroleum supply chain (PSC) has been illustrated to explain the proposed method.
Findings
The results of this study found that transportation/logistics (delivery system), quality of the petroleum products, crude supply, customer’s order and legal/political regulations are the most significant risk drivers of a typical PSC. It is also found that the Indian PSC possesses a risk score of 34 percent.
Research limitations/implications
The quantification of risk in operational measure provides an unblemished representation of the overall SC risk. Unlike the existing financial measure, it takes complex subjective operational effectiveness like product quality, customer satisfaction, etc., into consideration. Identifying the high-prioritized risks helps the decision and policy makers to merely focus on the most prominent risk drivers, and reduce the impact of overall SC risk. Planning a risk mitigation strategy at a given level of risk is however beyond the scope of this research.
Originality/value
The paper develops a risk quantification framework in the context of a PSC.
Keywords
Acknowledgements
The authors acknowledge the two anonymous reviewers for their constructive feedback, which helped to enhance the quality of this paper.
Citation
Tarei, P.K., Thakkar, J.J. and Nag, B. (2018), "A hybrid approach for quantifying supply chain risk and prioritizing the risk drivers: A case of Indian petroleum supply chain", Journal of Manufacturing Technology Management, Vol. 29 No. 3, pp. 533-569. https://doi.org/10.1108/JMTM-10-2017-0218
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited