Supply chain risks: development of model and empirical evidence

Abstract

The purpose of this paper is to understand the relationship between supply chain sources and supply chain risk exposure. The relationship of supply chain risk sources viz. demand risk, supply risk, process/control risk, environmental risk, logistical and catastrophic risks with supply chain risk exposure was tested empirically in Indian automobile industry. An extensive literature review of supply chain risk sources was conducted and hypotheses derived. The data was collected from 79 automotive firms operating in India. Using exploratory factor analysis supply chain risks were condensed into six risk sources constructs. Further, multiple regression analysis was used to characterise the relationship between various risk sources and supply chain risk exposure. Three risk sources viz. demand, supply and catastrophic were found to be most critical in Indian automobile supply chain. Other risk sources viz. environmental, process/control and logistical risk were not found statistically significant. Keywords