A Systems Approach for Modelling Supply Chain Risks

Ghadge, A., Dani, S., Chester, M., & Kalawsky, R. (2013). A systems approach for modelling supply chain risks. Supply Chain Management: An International Journal, 18(5), 523-538.

16 Pages Posted: 6 Apr 2013 Last revised: 10 Mar 2017

See all articles by Abhijeet Ghadge

Abhijeet Ghadge

Cranfield University - School of Management

Samir Dani

Loughborough University - Business School

Michael Chester

Independent

Roy Kalawsky

Loughborough University - Research School of Systems Engineering

Date Written: February 5, 2012

Abstract

Purpose - With increasing exposure to disruptions, it is vital for supply chains to manage the risks proactively. Prediction of potential failure points and overall impact of these risks is challenging. In this paper, systems thinking concepts are applied for modelling supply chain risks. The aim of this research is to develop a holistic, systematic and quantitative risk assessment process for measuring the overall risk behaviour.

Design/Methodology/Approach - A framework for Supply Chain Risk Management (SCRM) is developed and tested using an industrial case study. A systematically developed research design is employed to capture the dynamic behaviour of risks. Additionally, a system based supply chain risk model is conceptualized for risk modelling. Sensitivity modelling results are combined for validating the supply chain risk model. Findings - The systems approach for modelling supply chain risks predicts the failure points along with their overall risk impact in the supply chain network. System based risk modelling provides a holistic picture of risk behavioural performance which is difficult to realise through other research methodologies commonly preferred in the SCRM research.

Practical Implications - The developed framework for SCRM is tested in an industry setting for its viability. The framework for SCRM along with the supply chain risk model is expected to benefit practitioners in understanding the intricacies of supply chain risks. The system model for risk assessment is a working tool which could provide a perspective of future disruptive events.

Originality - A holistic, systematic and quantitative risk modelling mechanism for capturing overall behaviour of risks is a valuable contribution of this research. The paper presents a new perspective towards using systems thinking for modelling supply chain risks.

Keywords: Supply Chain Risk Management, Systems Thinking, Risk Modelling

Suggested Citation

Ghadge, Abhijeet and Dani, Samir and Chester, Michael and Kalawsky, Roy, A Systems Approach for Modelling Supply Chain Risks (February 5, 2012). Ghadge, A., Dani, S., Chester, M., & Kalawsky, R. (2013). A systems approach for modelling supply chain risks. Supply Chain Management: An International Journal, 18(5), 523-538., Available at SSRN: https://ssrn.com/abstract=2240340

Abhijeet Ghadge (Contact Author)

Cranfield University - School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom

Samir Dani

Loughborough University - Business School ( email )

Ashby Road
Loughborough
Nottingham NG1 4BU, LE11 3TU
Great Britain

Michael Chester

Independent ( email )

Roy Kalawsky

Loughborough University - Research School of Systems Engineering ( email )

Ashby Road
Loughborough
Loughborough, LE11 3TU
Great Britain

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