Assessment of supply chain risks susceptibility in SMEs using digraph and matrix methods

Risk management in a supply chain context has emerged as a big challenge for the organisations. Supply chain risks are so varied in nature that it is impossible to completely eliminate them. Further, these risks are interrelated and thus any effort to reduce one may increase the probability of other risks. This paper tries to model supply chain risk susceptibility using digraph and matrix methods. It proposes a risk index, which is a single numerical value to aid in analysing and benchmarking supply chains on risk susceptibility dimension. The present research also expands the understanding of supply chain risk by modelling the interdependencies of various variables and sub-variables of risks in a supply chain. It provides a useful tool to continuously monitor the risk susceptibility of a supply chain and therefore assist in the development of new strategies to counter supply chain risks effectively. © 2016 Inderscience Enterprises Ltd .