An Empirical Procurement Risk Management Framework in Supply Chain Networks: A Hybrid Approach

The review of the related literature pointed to a significant gap in procurement risk management area, and this paper tried to identify and fill this gap in order to develop a new risk model, and improve the literature review. A hybrid procurement risk management model based on four main stages namely pre-identification, identification, assessment and mitigation is proposed. For pre-identification stage, the literature was deeply reviewed to categorize it into supply-side, buyer-supplier side and demand-side risks as well as to collect and categorize the identified risks in procurement literature. Delphi method and a comprehensive literature review were employed for the identification stage. The explanatory and confirmatory factor analyses were used to build and rank the risk factors and its multi-dimensional consequences for the assessment stage. Delphi and ANP-fuzzy TOPSIS method were used to gather and prioritize the sets of solutions for the mitigation strategy. An effective model for the procurement risks in supply chain was developed in order to help gathering more comprehensive risks as well, to better understand and analyze the cause and consequences of the procurement risks to drive better mitigation solutions. This paper has proposed a supply chain network context as a holistic view for the procurement risk management. Therefore, a hybrid procurement risk management model was proposed. By the comprehensive literature review a pre-identification step was proposed to improve risk identification stage and a multi-dimensional risk assessment model, considering risk intricacies, circumstances of the case and causes and consequences of the risks.