Mohammad Nishat Faisal

ABSTRACT

Today’s uncertain business environment requires supply chain managers to assess the degree of risk across the whole gamut of activities in a supply chain and develop suitable strategies to mitigate them. Supply chain risk management (SCRM) is the process of risk mitigation in supply chains achieved through collaboration, coordination and application of risk management tools among the partners, to ensure continuity coupled with long-term profitability of the supply chain. Supply chain risks emanate from multiple sources like market volatility, delays, terrorist attacks, natural disasters etc. In this research supply chain risks  have been classified under physical, financial, informational, and relational categories. This classification is based on the risks to the sub-chains existing in every supply chain network.  Risk mitigation in supply chains is dependent on several variables like information sharing, supply chain agility, aligning incentives, strategic risk planning, risk sharing, trust among supply chain partners, collaborative relationships, information security, corporate social responsibility, knowledge about risks, continual risk assessment and analysis, loss assessment metrics for a supply chain, and benchmarking risk mitigation practices. The most difficult part of supply chain risk management is prioritizing risks and an understanding of the relationships among various types of risks and risk mitigation variables. Also as risk mitigation variables are interdependent it is also necessary to understand their relative interdependencies.

Over the years, Quality Function Deployment (QFD) is a used as a structured approach to integrate the customer requirements with products and service design specifications. The benefits are that design is focused on customer requirements, it prioritizes design activities and it reduces the design cycle.  This is accomplished by using the HOQ, a matrix that relates customer requirements into quality characteristics.  Lately, it is being used to serve as a decision-making methodology that helps to master the difficult and complex decisions during complex processes. QFD can be adapted in supply chain risk management, with a modified perception of the fundamental concepts. The customers’ requirements can be interpreted as the supply chain requirements. They are internal customers rather than external customers. Drawing from the standard framework, in this research a modified HOQ concept is developed to understand the relationships between various risks and risk mitigation variables. It helps to prioritize various risks and understand the current status of the supply chain and the deficient areas with regard to risk mitigation capabilities. The structured QFD process provides the supply chain managers  a conceptual map that enables the improvement of planning and control of various risks that could impact a supply chain.