Building a case for collaborative risk management with visibility of risks across supply networks: investigating the effect of supply network characteristics

Purpose of this paper:
The purpose of this paper is to analyse the need for collaborative risk management in supply
networks with visibility of risks across firms in the network, to outline the possible benefits
and challenges firms in the network can expect to face from such a collaborative approach
and to understand the characteristics of
supply networks which will make such a collaborative approach appropriate. Thus, the research questions addressed in this research are as follows:
1) Is there a need to ensure visibility of risks across firms in a supply network and to develop
a collaborative process to manage risks in the network?
2) What are the benefits and challenges associated with such a collaborative approach?
3) How do the supply network characteristics influence the need for ensuring visibility of risks and for developing a collaborative process to manage risks in a supply network?
Design/methodology/approach:
The objectives of the research are achieved by conducting review of supply networks, supply
chain risk management, supply chain collaboration and information sharing literature coupled
with secondary data analysis and case studies.
Findings:
This research underscores the need for collaborative risk management for managing risks in a supply network and proposes that the appropriateness of a collaborative approach will
depend on the specific roles of the focal firm and the suppliers, the degree of network dynamics (Harland et al., 2001), the degree of balance in the buyer-supplier and supplier-supplier relationships (Choi and Wu, 2009) and the extent of endogeneous and exogeneous uncertainties faced by network firms (Trkman and McCormack, 2009).
Value:
There are limited studies on assessment, analysis and management of risks at the supply network level. The existing literature do not provide guidance on how companies in a supply network can develop common understanding of the risks and reach a mutual agreement of mitigating those risks. It is also unclear whether visibility of risks across member firms and using a collaborative approach for managing risks in the supply network utilizing the better visibility can help manage risks better in a network. This research addresses the above gaps through an analysis of the literature and secondary cases and develop propositions for further
empirical analysis.
Research limitations/implications (if applicable):
The research is carried out considering specific databases and journals. Further research needs to be done using a systematic literature review and also to validate the propositions through empirical research.
Practical implications (if applicable):
This research underscores the need for collaborative risk management for managing risks in a network. At the same time the research pointed out contextual factors which have an impact on the benefits of a collaborative risk management approach. Thus, firms within a network need to assess the suitability of the approach and should refrain from either following a purely internal risk assessment and mitigation or making it completely collaborative.