Analyzing Supply Chain Risks Through Multi-Tier Supplier Networks

Abstract: As firms establish their global supply chains, the risks increase dramatically due to increased complexity of the supply chains, which could result in lowering their market and financial performances. Natural disasters become major threats and often create significant negative impacts to supply chains. In this paper, an in-depth interview with a supply chain executive of an auto manufacturer reveals that when a natural disaster occurred, single sourcing at a tier-3 supplier and lack of location diversification for suppliers were weaknesses of the automaker´s supply chain. To assess supply chain risks we propose to build a supplier information system and construct multi-tier supplier networks to analyze them from different risk perspectives. This study offers the unique value of establishing a supplier database which not only includes tier-1 supplier, but also includes tier-2 and tier-3 suppliers which often have more hidden risks.

Full-Text Available: PDF

Authors: Kun Liao, Zhongming Ma, Ozden Bayazit