Supply chain risk management (SCRM)

InsightfromindustrySupplychainriskmanagement(SCRM):acasestudyontheautomotiveandelectronicindustriesinBrazilMauricioF.BlosDepartmentofManagementandInformationSystemsScience,NagaokaUniversityofTechnology,Nagaoka,JapanMohammedQuaddusandH.M.WeeGraduateSchoolofBusiness,CurtinUniversityofTechnology,Perth,Australia,andKenjiWatanabeDepartmentofManagementandInformationSystemsScience,NagaokaUniversityofTechnology,Nagaoka,JapanAbstractPurpose–Thepurposeofthispaperistwofold:toidentifythesupplychainrisksintheautomotiveandelectronicindustriesinBrazil,andtohighlighttheurgencyofsupplychainriskmanagement(SCRM)implementation.Design/methodology/approach–Itusesexploratorystudymethodologyintheautomotiveandelectronicindustries,takinginconsiderationofthe(SCRM)phaseofinitiation.Findings–TherearesignificantpracticestoimplementSCRM:bettersupplychaincommunication,SCRMandbusinesscontinuityplanningtrainingprogram,andthecreationofachiefriskofficerpositiontomanagethesupplychainrisks.Researchlimitations/implications–Thelimitationofthisstudycomesfromitssmallsamplesize.Therearetwosimplereasons:manycompaniesdidnotknowSCRMandthusmisinterpretedtheinformationaboutSCRM.Practicalimplications–Thiscasestudypromotesmorepreparednessforthetwoindustriestomanagetherisksofsupplychain.Originality/value–ThisstudyshowstherisksthatsurroundthesupplychainintheautomotiveandelectronicindustriesinBrazilandhowtheseindustriescanimplementSCRMinasuccessfulway.KeywordsSupplychainmanagement,Riskmanagement,Businesscontinuity,Automotiveindustry,Electronicsindustry,BrazilPapertypeCasestudyIntroductionSupplychainriskmanagement(SCRM)isanewandnovelmethodologythatcapturesboththeoperationsaswellasthefinancialaspectsofdecision-making.Supplychainmanagement,ingeneral,isstillarelativelynewconceptinmostdevelopingcountries;andmanycompanieshavenotevenbeguntoconsidertheformalmanagementoftheirsupplychain.Someconsiderthecauseastheorganizationalbehavior:departmentalstructureandbadcommunications.However,supplychainmanagementgrowsrapidlyeachday,andmanyseniorsupplychainprofessionalsfromtheinvestigatedindustrieshaveexpresseditsbroaderfuturerole.Supplychainmanagementis“themanagementofmaterial,informationandfinancethroughanetworkoforganizations(i.e.suppliers,manufacturers,logisticsproviders,wholesales/distributorsandretailers)thataimstoproduceanddeliverproductsorservicesfortheconsumers.Itincludesthecoordinationandcollaborationofprocessesandactivitiesacrossdifferentfunctionssuchasmarketing,sales,production,productdesign,procurement,logistics,finance,andinformationtechnologywithinthenetworkoforganizations.”Supplychainriskmanagement(SCRM)is“themanagementofsupplychainrisksthroughcoordinationorcollaborationamongthesupplychainpartnerssoastoensureprofitabilityandcontinuity”(Brindley,2004)(Figure1).Theriskinsupplychainmanagementoriginatesfromtwokeyareas:supplyanddemand.Thenextlevelofequalimportanceisenvironmental,political,processandsecurityrisks.Politicalandenvironmentalrisksmayalwaysremainamorphousandrefractorytoadequatequantification.Securityrisksareevenmorevolatilebutonafarhigherprioritylevel.BasedonthedefinitionsofsupplychainThecurrentissueandfulltextarchiveofthisjournalisavailableatwww.emeraldinsight.com/1359-8546.htmSupplyChainManagement:AnInternationalJournal14/4(2009)247–252qEmeraldGroupPublishingLimited[ISSN1359-8546][DOI10.1108/13598540910970072]247managementandSCRM,itappearsthatonecanaddresstheissueofSCRMalongtwodimensions:1Supplychainrisk.Operationalrisksordisruptionrisks.2Mitigationapproach.Supplymanagement,demandmanagement,productmanagement,orinformationmanagement.Manysupplychainscholarsbelievedthatcompaniescouldonlymitigatesupplychainriskbutlossanddamagecouldnotbeavoidedwhenaccidenthappens.However,supplychainriskmanagement(SCRM)hasbecomeeffectivelytoreducelossanddamage.ThispaperpresentsanempiricalstudyofSCRMinautomotiveandelectronicindustriesinBrazil.Thescopeisformedbyresearchmethodologyandresults.Asupplychainvulnerabilitymapwithconclusionsandfuturedirectionsaregiveninthefinalsection.ResearchmethodologySinceonlylimitedempiricalresearchonhowcompaniesdealwithSCRMhasbeenfound,anexplorativeinvestigationbasedonasupplychainvulnerabilitymap(SCVM)isconductedinthisstudy.ThemainobjectiveistodefinethenecessityofapplyingSCRM.ThisSCVMbasedonSheffi(2005)isdividedinfourquadrantsasdiscussedinthenextsection.Thefocusofthisstudyismanufactureranddyadicsupplier-manufacturer(automotiveandelectronicindustry)relationshipforbigandmedium-sizeenterprises.Therefore,theunitsofanalysisinthisresearcharepurchasing,production,andsupplychainmanagers.Atotalof72questionnairesweredeveloped,testedanddistributedtotheautomotiverelatedindustriesinSaoPaulo,RiodeJaneiroandRioGrandedoSul,Brazil.Atotalof30questionnairesweredistributedtotheelectronicrelatedindustriesinManausFreeTradeZone.Positiveandnegativestatementisusedtosimplifythevalidationofquestionnairetobuildthesupplychainvulnerabilitymap.Thesurveysentthequestionnairesviae-mailtothetargetedrespondentsandsomeofthemincludedface-to-faceinterview.Thereturned/repliedquestionnaires,32fromth