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Managing risks in the supply chain using the AHP method

Managing risks in the supply chain using the AHP method Purpose – The aim of the research is to provide a method to evaluate supply chain risks that stand in the way of the supply chain objectives. Design/methodology/approach – An analytical hierarchy process model is proposed to identify supply chain risk factors with a view to improving the objective of customer value. The two phases of the method are the prioritization of supply chain objectives; and the selection of risk indicators. A case study is also presented. Findings – The appreciation of the most critical supply chain risks comes from careful evaluations of the impacts and a consideration of the cause‐effect relationships. The involvement of key managers is essential. In the case study the two most divergent evaluations were from the logistics manager and the sales manager. Research limitations/implications – Further application in various companies and industry sectors would be helpful to compare different cases and findings. Practical implications – The model allows for flexibility in using (and the frequent monitoring of) a panel of indicators by management. The dashboard is composed of only a few indicators and helps in ensuring a synthesis among different perspectives. For these reasons it gives an useful contribution to practitioners. Originality/value – The model seems helpful in creating awareness of supply chain risk. The involvement of managers from different areas is essential in establishing a thorough consideration of critical issues and interdependencies in determining a complete risk analysis. The method can support managers in setting up a priority hierarchy for risk treatment. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The International Journal of Logistics Management Emerald Publishing

Managing risks in the supply chain using the AHP method

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References (54)

Publisher
Emerald Publishing
Copyright
Copyright © 2006 Emerald Group Publishing Limited. All rights reserved.
ISSN
0957-4093
DOI
10.1108/09574090610663464
Publisher site
See Article on Publisher Site

Abstract

Purpose – The aim of the research is to provide a method to evaluate supply chain risks that stand in the way of the supply chain objectives. Design/methodology/approach – An analytical hierarchy process model is proposed to identify supply chain risk factors with a view to improving the objective of customer value. The two phases of the method are the prioritization of supply chain objectives; and the selection of risk indicators. A case study is also presented. Findings – The appreciation of the most critical supply chain risks comes from careful evaluations of the impacts and a consideration of the cause‐effect relationships. The involvement of key managers is essential. In the case study the two most divergent evaluations were from the logistics manager and the sales manager. Research limitations/implications – Further application in various companies and industry sectors would be helpful to compare different cases and findings. Practical implications – The model allows for flexibility in using (and the frequent monitoring of) a panel of indicators by management. The dashboard is composed of only a few indicators and helps in ensuring a synthesis among different perspectives. For these reasons it gives an useful contribution to practitioners. Originality/value – The model seems helpful in creating awareness of supply chain risk. The involvement of managers from different areas is essential in establishing a thorough consideration of critical issues and interdependencies in determining a complete risk analysis. The method can support managers in setting up a priority hierarchy for risk treatment.

Journal

The International Journal of Logistics ManagementEmerald Publishing

Published: Jan 1, 2006

Keywords: Supply chain management; Risk management; Analytical hierarchy process

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