Supply chain operational risk mitigation: a collaborative approach

Abstract

Along with increasing supply chain risks due to economic and environmental changes, it is imperative to answer the question of how to reduce supply chain risks. This study examines supply chain collaboration as a risk mitigation strategy. The study examines three types of risks, namely supply risk, demand risk and process risk in relation to three types of collaboration, namely supplier collaboration, customer collaboration and internal collaboration, as a mechanism to mitigate those risks. The proposed relationship model is tested with data collected from 203 manufacturing companies in Australia. The results show that each area of collaboration effectively reduces its respective supply chain risk, but only the mitigation of process risk and demand risk has a direct effect on supply chain performance. In addition, both supply risk and demand risk increase process risk. We offer theoretical and practical implications of the findings.

Keywords:

• supply chain collaboration
• risk
• supply chain risk