Supply Risk Management of Automotive Suppliers : Development in a Fluctuating Environment

Abstract: Background: The implementation of procurement concepts such as JIT or singlesourcing have resulted in the emergence of new supply risks forautomotive suppliers. The economic crisis in 2008 and volatiledemand in recent years had enormous impact on the sector.Consequently, in association with lean purchasing models, newdimensions of supply risks have emerged. This creates the need forautomotive suppliers to adapt and improve their supply riskmanagement in response to the increased risk potential. There hasbeen no research on how automotive suppliers have furtherdeveloped their supply risk management recently. Purpose: The purpose is to examine how automotive suppliers have adaptedtheir supply risk management in response to the fluctuatingeconomy since 2008. Frame of reference: In this section the Kraljic matrix and the risk management processare presented. The theories lead to a synthesis including the researchquestions for fulfilling the purpose. Method: This research is based on a qualitative multiple case study. In orderto gather the necessary in-depth data, four automotive suppliersfrom Germany and Northern Europe were interviewed by theauthors. Conclusions: Automotive suppliers have clearly reacted on increasedconsequences of supply risks. The general grown awareness andsensitivity have lead to the implementation of new managementtools. Particularly the cooperation between supply chain membershas considerably intensified and contributed to a better riskreduction. Moreover, the financial stability of vendors has risen inimportance and is considered more thoroughly. All the instrumentsand methods may, however, be more powerful and efficient ifautomotive suppliers had standardized and linked them into aconsecutive process.