A model for inbound supply risk analysis

Managing risk has become a critical component of supply chain management. The implications of supply chain failures can be costly and lead to significant customer delivery delays. Though, different types of supply chain vulnerability management methodologies have been proposed for managing supply risk, most offer only point-based solutions that deal with a limited set of risks. This research aims to reinforce inbound supply chain risk management by proposing an integrated methodology to classify, manage and assess inbound supply risks. The contributions of this paper are four-fold: (1) inbound supply risk factors are identified through both an extensive academic literature review on supply risk literature review as well as a series of industry interviews; (2) from these factors, a hierarchical risk factor classification structure is created; (3) an analytical hierarchy processing (AHP) method with enhanced consistency to rank risk factor for suppliers is created; and (4) a prototype computer implementation system is developed and tested on an industry example. (c) 2006 Elsevier B.V. All rights reserved.