Supplier Risk Tower: The Vigilant Eye on Supply Chains

ABSTRACT

The disruptions in international supply chains caused by the COVID-19 pandemic highlight the importance of considering risk in supply chain management. Using an action research approach, we examine supply chain risk management at a tier-1 automotive supplier. We focus on the inbound supply risk of this supplier and introduce the new Supplier Risk Tower risk assessment. The Supplier Risk Tower combines vulnerability indices specific to the supply chain, supplier feedback on the current risk situation, and impact assessment from the tier-1's perspective. What is novel about this approach is that risk is calculated as an absolute number which provides guidance, especially for rare but severe disruptions. This approach also expands the understanding of lean management regarding the raison d'être of buffer stocks in supply chains. Because risks materialize. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.