Conceptual analysis of Risk Aspects within an InboundSupply Chain

Abstract: The global supply chain is fundamentally changing to become more complex as the world gets more connected. This causes high pressure on the supply chain to become resilient to a surrounding environment with more risks that affect financial aspects. In order to better understand what measurements and actions that need to be in place when strategizing on inbound supply chain theoretical frameworks needs to be built. To further understand how different risk factors are interlinked within the supply chain, it was decided to make use semi-structured interviews and the methodology called Total Interpretive Structural Modeling (TISM). The method chosen in this work is in accordance with the TISM methodology and is performed as follows: First, an extensive literature and interview process is carried out to identify important risks and how they drive cost. Secondly, utilizing experts knowledge by comparing logical statements against each other to create a hierarchical relationship between risks and cost drivers within the incoming supply chain. Third, Cross-Impact Analysis was utilized to better understand dependency and power and every variable. Finally, a self-explanatory model was developed based on the theoretical relationship between variables. At the same time, a qualitative study was executed. Based on semi-structured interviews with experts in the reas of Logistics & Supply Chain Management. The methodology for analyzing these semi-structured interviews is conducted in accordance with theories on the interpretation of qualitative data: transcribe, encode and index each interview to gain an understanding of the importance of data obtained. This qualitative study is conducted as a check to ensure that the result from the interpretation structure model (TISM) is consistent with reality. All done from a general and conceptual level applicable to the inbound supply chain of a manufacturing organization. The thesis found, by the use of above methodology, that there were 11 different risk factors that directly or indirectly relate to a financial cost driven in the supply chain. The hierarchy of these factors was established through TISM and cross-referenced with the expert opinions within the field of Supply Chain Management and logistics through semistructured interviews. Findings from the thesis conclude that important aspects of an inbound supply chain are (i) the importance of having a conceptual view of the market, strategy and organizational goal; (ii) implement an accurate accounting for materials and products to support transparency; (iii) logistics network and inventory is fairly unimportant in the whole picture; (iv) supplier relations needs to be kept up to standard, even in a seller’s market.