Supply chain risk management in India – practical insights

This paper reviews the supply chain risk management (SCRM) literature to identify as well as to discuss and elaborate on the impact and origin of major supply chain risk factors in an Indian context. Through a combination of existing literature and a survey instrument, we identify major SCRM issues including underlying supply chain risks and thereafter identify gaps, issues and opportunities for further research. SCRM has become a popular research topic, in part owing to increased globalisation of business. Moreover competitive factors such as shorter product life cycles, technological innovations and changing government policies have brought this topic more sharply into focus. We carried out a survey among Indian supply chain professionals, based on supply chain risk constructs developed from a literature review. Statistical analysis utilised exploratory and confirmatory factor analyses to determine the major risk factors in the Indian supply chain sector. We found a range of supply chain risks prevalent in Indian supply chains, classified here as cultural, operational, infrastructure, economic, forecasting and supplier-related risks. However, for a variety of reasons and as discussed in the paper, the implications can vary considerably. Based on the findings we provide a future SCRM research agenda from an Indian perspective. As international supply chains increasingly have Indian partners and domestic firms within India seek to be globally competitive, the risks need to be better understood. This is the first detailed study on SCRM practices in an Indian context.

[1]  Christopher S. Tang,et al.  Researchers' Perspectives on Supply Chain Risk Management , 2011 .

[2]  Robert E. Spekman,et al.  Risky business: expanding the discussion on risk and the extended enterprise , 2004 .

[3]  V. Tummala,et al.  Assessing supply chain risks with the analytic hierarchy process: Providing decision support for the offshoring decision by a US manufacturing company , 2008 .

[4]  V. Babich Vulnerable options in supply chains: Effects of supplier competition , 2006 .

[5]  A. Sobczak,et al.  Are Codes of Conduct in Global Supply Chains Really Voluntary? From Soft Law Regulation of Labour Relations to Consumer Law , 2004, Business Ethics Quarterly.

[6]  K. A. Goyal Impact of Globalization on Developing Countries (With Special Reference To India) , 2006 .

[7]  Klaas Sijtsma,et al.  Invited discussion of Cronbach (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16, 297-334 (26,889 citations in Google Scholar as of 1/1/2016) , 2016 .

[8]  F. Cucchiella,et al.  Risk management in supply chain: a real option approach , 2006 .

[9]  J. Hallikas,et al.  Risk management processes in supplier networks , 2004 .

[10]  Clare Brindley,et al.  Supply chain risk , 2004 .

[11]  Teresa M. McCarthy,et al.  Implementing collaborative forecasting to improve supply chain performance , 2002 .

[12]  George M. Giaglis,et al.  Minimizing logistics risk through real‐time vehicle routing and mobile technologies: Research to date and future trends , 2004 .

[13]  H. Correa,et al.  Tax-related aspects of logistics network planning: a case study in the Brazilian petrochemical industry , 2014 .

[14]  Richard Welford,et al.  Corporate social responsibility in Asian supply chains , 2006 .

[15]  Youhua Chen,et al.  Improving Supply Chain Performance and Managing Risk Under Weather-Related Demand Uncertainty , 2010, Manag. Sci..

[16]  E. Hartmann,et al.  Perspectives on Supply Chain Resilience: Where have we been and where are we going? , 2014 .

[17]  Zillur Rahman,et al.  Sources of first mover advantages in emerging markets – an Indian perspective , 2003 .

[18]  Volodymyr Babich,et al.  Competition and Diversification Effects in Supply Chains with Supplier Default Risk , 2006, Manuf. Serv. Oper. Manag..

[19]  W. Arrindell,et al.  An Empirical Test of the Utility of the Observations-To-Variables Ratio in Factor and Components Analysis , 1985 .

[20]  H. Peck Reconciling supply chain vulnerability, risk and supply chain management , 2006 .

[21]  Martha C. Wilson,et al.  The impact of transportation disruptions on supply chain performance , 2007 .

[22]  Kevin McCormack,et al.  Supply Chain Risk in Turbulent Environments – A Conceptual Model for Managing Supply Chain Network Risk , 2009 .

[23]  Roderick P. McDonald,et al.  The dimensionality of tests and items , 1981 .

[24]  Alexander E. Ellinger,et al.  Transforming supply chain operations in response to economic reform: the case of a motorcycle manufacturer in India , 2004 .

[25]  Uta Jüttner Supply chain risk management: Understanding the business requirements from a practitioner perspective , 2005 .

[26]  Charles G. Petersen,et al.  Improving order‐picking performance through the implementation of class‐based storage , 2004 .

[27]  Alan C. McKinnon,et al.  Starry‐eyed: journal rankings and the future of logistics research , 2013 .

[28]  T. A. Stewart,et al.  Liderar el cambio a partir de las ventas: Entrevista a Fred Hassan , 2006 .

[29]  Michael J. Maloni,et al.  Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry , 2006 .

[30]  Ravi Shankar,et al.  Supply chain management: some sectoral dissimilarities in the Indian manufacturing industry , 2006 .

[31]  Gregory V. Frazier,et al.  An analysis of job dissatisfaction and turnover to reduce global supply chain risk: Evidence from China , 2009 .

[32]  John T. Mentzer,et al.  LOGISTICS PERFORMANCE: EFFICIENCY, EFFECTIVENESS, AND DIFFERENTIATION , 2010 .

[33]  John Hattie,et al.  Methodology Review: Assessing Unidimensionality of Tests and ltenls , 1985 .

[34]  Andreas Norrman,et al.  Ericsson’s Proactive Supply Chain Risk Management-approach After a Serious Supplier Accident , 2004 .

[35]  David Blanchard,et al.  Supply Chain Management Best Practices , 2006 .

[36]  Narendar Sumukadas,et al.  Coping with customs clearance uncertainties in global sourcing , 2005 .

[37]  Hau L. Lee,et al.  Information distortion in a supply chain: the bullwhip effect , 1997 .

[38]  M. Christopher,et al.  Supply chain risk management: outlining an agenda for future research , 2003 .

[39]  R. Narasimhan,et al.  Perspectives on risk management in supply chains , 2009 .

[40]  Richard Crowe The Union Budget , 2018, Specialized Administrative Law of the European Union.

[41]  Stephan M. Wagner,et al.  AN EMPIRICAL EXAMINATION OF SUPPLY CHAIN PERFORMANCE ALONG SEVERAL DIMENSIONS OF RISK , 2008 .

[42]  Bhanu S. Ragu-Nathan,et al.  The impact of supply chain management practices on competitive advantage and organizational performance , 2006 .

[43]  O. Tang,et al.  Identifying risk issues and research advancements in supply chain risk management , 2011 .

[44]  D. Tranfield,et al.  Towards a Methodology for Developing Evidence-Informed Management Knowledge by Means of Systematic Review , 2003 .

[45]  V. Mitchell Organizational Risk Perception and Reduction: A Literature Review , 1995 .

[46]  Jatinder N. D. Gupta,et al.  Managing supply chains for competitiveness: the Indian scenario , 2006 .

[47]  Samir Dani,et al.  Resilience: the concept, a literature review and future directions , 2011 .

[48]  B Bunschoten From the back room to the board room. , 1996, Health data management.

[49]  R. Shankar,et al.  SUPPLY CHAIN MANAGEMENT: SOME INSIGHTS FROM INDIAN MANUFACTURING COMPANIES , 2004 .

[50]  Mei-Shiang Chang,et al.  A scenario planning approach for the flood emergency logistics preparation problem under uncertainty , 2007 .

[51]  Vineet Padmanabhan,et al.  Comments on "Information Distortion in a Supply Chain: The Bullwhip Effect" , 1997, Manag. Sci..

[52]  Kevin B. Hendricks,et al.  The Effect of Demand–Supply Mismatches on Firm Risk , 2014 .

[53]  Ravi Shankar,et al.  Supply chain risk mitigation: modeling the enablers , 2006, Bus. Process. Manag. J..

[54]  R. MacCallum,et al.  Power analysis and determination of sample size for covariance structure modeling. , 1996 .

[55]  Hau L. Lee,et al.  Mitigating supply chain risk through improved confidence , 2004 .

[56]  R. Klassen,et al.  Social issues in supply chains: Capabilities link responsibility, risk (opportunity), and performance , 2012 .

[57]  S. Chopra,et al.  Managing Risk To Avoid Supply-Chain Breakdown , 2004 .

[58]  Kim Hua Tan,et al.  Managing product quality risk and visibility in multi-layer supply chain , 2012 .

[59]  Zillur Rahman Use of Internet in supply chain management: a study of Indian companies , 2004, Ind. Manag. Data Syst..

[60]  Germaine H. Saad,et al.  Managing Disruption Risks in Supply Chains , 2005 .

[61]  R. Altekar Managing Supply Chain in Indian Manufacturing Sector: A Critical Study with Special Reference to Supplier Partnership , 2004 .

[62]  David E. Booth,et al.  Applied Multivariate Analysis , 2003, Technometrics.

[63]  T.C.E. Cheng,et al.  Supply risk management via guanxi in the Chinese business context: The buyer's perspective , 2012 .

[64]  O. Khan,et al.  Risk and supply chain management: creating a research agenda , 2007 .

[65]  Monideepa Tarafdar,et al.  Lean and agile supply chain strategies and supply chain responsiveness: The role of strategic supplier partnership and postponement , 2013 .

[66]  Preetam Basu,et al.  Challenges of supply chain finance: A detailed study and a hierarchical model based on the experiences of an Indian firm , 2013, Bus. Process. Manag. J..

[67]  Nynke Faber,et al.  Organizing warehouse management , 2013 .

[68]  Bin Hu,et al.  Managing Supply Disruptions when Sourcing from Reliable and Unreliable Suppliers , 2015 .

[69]  C. Carter,et al.  Social responsibility and supply chain relationships , 2002 .

[70]  J. R. Carter,et al.  An analysis of supply risk assessment techniques , 2004 .

[71]  Chung-lun Li,et al.  Flexible and Risk-Sharing Supply Contracts Under Price Uncertainty , 1999 .

[72]  V. Tummala,et al.  Assessing and Managing Risks Using the Supply Chain Risk Management Process (SCRMP) , 2011 .

[73]  Stephan M. Wagner,et al.  DO PERCEPTIONS BECOME REALITY? THE MODERATING ROLE OF SUPPLY CHAIN RESILIENCY ON DISRUPTION OCCURRENCE , 2010 .

[74]  D. Simchi-Levi Operations Rules: Delivering Customer Value through Flexible Operations , 2010 .

[75]  L. LeeHau,et al.  Information Distortion in a Supply Chain , 1997 .

[76]  Rahul C. Basole,et al.  Supply Network Structure, Visibility, and Risk Diffusion: A Computational Approach , 2014, Decis. Sci..

[77]  Hokey Min,et al.  Application of a decision support system to strategic warehousing decisions , 2009 .

[78]  B Ritchie,et al.  An emergent framework for supply chain risk management and performance measurement , 2007, J. Oper. Res. Soc..

[79]  Péter Gáspár,et al.  Driver behaviour, truck motion and dangerous road locations: unfolding from emergency braking data , 2014 .

[80]  H.L. Lee,et al.  Aligning Supply Chain Strategies with Product Uncertainties , 2002, IEEE Engineering Management Review.

[81]  Edieal J. Pinker,et al.  Contingent Labor Contracting Under Demand and Supply Uncertainty , 2001, Manag. Sci..

[82]  Rajesh K. Pillania,et al.  Strategic sourcing for supply chain agility and firms' performance , 2008 .

[83]  Christopher S. Tang Robust strategies for mitigating supply chain disruptions , 2006 .

[84]  Ashutosh Sarkar,et al.  Evaluation of supplier capability and performance: A method for supply base reduction , 2006 .

[85]  Pedro M. Reyes,et al.  RFID in the contemporary supply chain: multiple perspectives on its benefits and risks , 2008 .

[86]  Enrico Cagno,et al.  Supply risk management vs supplier selection to manage the supply risk in the EPC supply chain , 2008 .

[87]  M. Christopher,et al.  Building the Resilient Supply Chain , 2004 .

[88]  M. Saad,et al.  An investigation of supply chain performance measurement in the Indian automotive sector , 2006 .

[89]  S. Deshmukh,et al.  Supply chain issues in Indian manufacturing SMEs: insights from six case studies , 2012 .

[90]  R. Levary Ranking foreign suppliers based on supply risk , 2007 .

[91]  K. M. Mital,et al.  Indian supply chain architecture , 2008 .

[92]  Martin Christopher,et al.  “Supply Chain 2.0”: managing supply chains in the era of turbulence , 2011 .

[93]  Sanchoy K. Das,et al.  Modeling the flexibility of order quantities and lead-times in supply chains , 2003 .

[94]  J. Mentzer,et al.  Global supply chain risk management strategies , 2008 .

[95]  H. Peck Drivers of supply chain vulnerability: an integrated framework , 2005 .

[96]  Andrew Popp,et al.  Information flow in automotive supply chains - identifying and learning to overcome barriers to change , 2003, Ind. Manag. Data Syst..

[97]  J. March,et al.  Managerial perspectives on risk and risk taking , 1987 .

[98]  B. S. Sahay,et al.  Supply chain management practices in Indian industry , 2003 .

[99]  F. Strozzi,et al.  Supply chain risk management: a new methodology for a systematic literature review , 2012 .

[100]  E. Claver,et al.  Doing business in India: a review of research in leading international journals , 2011 .

[101]  J. Mentzer,et al.  GLOBAL SUPPLY CHAIN RISK MANAGEMENT , 2008 .

[102]  Matti Kaulio,et al.  Disentangling core functions of Operational Resilience: A critical review of extant literature , 2014 .

[103]  Keely L. Croxton,et al.  ENSURING SUPPLY CHAIN RESILIENCE: DEVELOPMENT OF A CONCEPTUAL FRAMEWORK , 2010 .

[104]  Sarada Prasad Sarmah,et al.  Multiple sourcing under supplier failure risk and quantity discount: A genetic algorithm approach , 2013 .

[105]  Jörn-Henrik Thun,et al.  An empirical analysis of supply chain risk management in the German automotive industry , 2011 .

[106]  Joe B. Hanna,et al.  An analysis of the value of supply chain management periodicals , 2009 .

[107]  Brian Tomlin,et al.  To wait or not to wait: Optimal ordering under lead time uncertainty and forecast updating , 2009 .

[108]  Ivanka. Mamic,et al.  Managing Global Supply Chain: The Sports Footwear, Apparel and Retail Sectors , 2005 .

[109]  P. Bentler,et al.  Cutoff criteria for fit indexes in covariance structure analysis : Conventional criteria versus new alternatives , 1999 .

[110]  Fei Qin,et al.  Role of Random Capacity Risk and the Retailer in Decentralized Supply Chains with Competing Suppliers , 2014, Decis. Sci..

[111]  Gilbert A. Churchill A Paradigm for Developing Better Measures of Marketing Constructs , 1979 .

[112]  Jason W. Osborne,et al.  Best practices in exploratory factor analysis: four recommendations for getting the most from your analysis. , 2005 .

[113]  Thomas J. Kull,et al.  Supplier Selection Behavior Under Uncertainty: Contextual and Cognitive Effects on Risk Perception and Choice , 2014, Decis. Sci..

[114]  H. Walker,et al.  Risk in supply networks , 2003 .

[115]  Kevin P. Scheibe,et al.  Supplier Risk Assessment and Monitoring for the Automotive Industry , 2008 .

[116]  Kevin B. Hendricks,et al.  The effect of supply chain glitches on shareholder wealth , 2003 .

[117]  Marshall L. Fisher,et al.  Supply Chain Inventory Management and the Value of Shared Information , 2000 .

[118]  Sabine Matook,et al.  Supplier development with benchmarking as part of a comprehensive supplier risk management framework , 2009 .

[119]  G. Prakash Service quality in supply chain: empirical evidence from Indian automotive industry , 2011 .

[120]  Kevin B. Hendricks,et al.  Association Between Supply Chain Glitches and Operating Performance , 2005, Manag. Sci..

[121]  Mousumi Modak,et al.  Analyzing the Risk Factors of Supply Chain Management in Indian Manufacturing Organizations , 2011 .

[122]  L. Cronbach Coefficient alpha and the internal structure of tests , 1951 .

[123]  G. Zsidisin Managerial Perceptions of Supply Risk , 2003 .

[124]  Dawn Iacobucci,et al.  Structural Equations Modeling: Fit Indices, Sample Size, and Advanced Topics , 2010 .

[125]  E. Hartmann,et al.  Managing supplier sustainability risks in a dynamically changing environment—Sustainable supplier management in the chemical industry , 2010 .

[126]  K. Pawar,et al.  Contextualising the holistic cost of uncertainty in outsourcing manufacturing supply chains , 2013 .

[127]  Jack Barry,et al.  Supply chain risk in an uncertain global supply chain environment , 2004 .

[128]  Jennifer Blackhurst,et al.  A model for inbound supply risk analysis , 2006, Comput. Ind..