Supply chain risk identification and assessment by probability and impact matrix

Abstract

The purpose of this paper is to identify the risk factors involved in the process of supply chain management by small medium enterprises (SMEs) especially the companies engaged in the production of auto components as well as assessing those risks by 'probability-impact analysis'. Researchers conducted a survey of about 72 auto component manufacturing companies in the Manchester of South (Coimbatore District) by using a well-structured questionnaire. Based on the survey of literature as well as discussion with the domain experts, we identified the 17 risk factors in the context of SMEs' supply chain. The identified risk factors are further categorised into four dimensions viz. supply-side risks, operation side risks, demand side risks and external side risks. The major findings of this study point out towards the crucial supply chain risk factors such as lack of financial support, breakdown of machineries, demand fluctuations, up gradation of technology and unable to reduce the raw material cost by the key suppliers. It is expected that the outcome of this study will assist SCM professionals in decision making for better mitigating of risks and to excel in the supply chain performance.