Development of a Supply Chain Risk Mangement maturity model

Dao My Linh

Agenda
1. Introduction 2. Conceptual framework 3. Methodology 4. Development of SCRM maturity model

5. Discussion and Conclusion

1. Introduction
Globalization era of supply chain: Supply Chains are larger, more complex, leaner, widespread around the world Competitions now are between Supply Chains

1. Introduction
Businesses focus on cost reduction, shorter lead-time are most at risk

Businesses need an effective Supply Chain Risk Management (SCRM)

1. Introduction
Maturity model represent theories of capabilities evolve step-by-step To gauge the capability to managing risks effectively
Level 2 Level 1 Structure of a maturity model An example Level 3 Level 4

1. Introduction
1. What are dimensions of a SCRM maturity model? Foundation for developing a maturity model. These dimesions are primary factors that determines an effective SCRM

1. Introduction
2. In what sequence should these attributes be addressed in order to increase the level of maturity in a logical manner?

As a maturity model structure is step-bystep, it is important to understand any sequential dependency between the relevant dimensions and how these dimesions evolve after each level

2. Conceptual framework
SUPPLY CHAIN RISK MANAGEMENT
Risk Management Process, SCRM Tools and Practices

Environmental risks

Supply Chain
Suppliers Manufacturers Customers

Network risks
Organizational risk

Supply Chain Vulnerability

Supply chain disruptions Negative impact

Supply Chain Resilience

2. Conceptual framework
SUPPLY CHAIN RISK MANAGEMENT
Maturity model
Level 2 Level 3 Level 4 Level 5

Level 1

Qualities

Developing Process

Components

3. Methodology
Qualitative approach

Secondary Data: Extensive Literature Review

Primary data : Thematic interviews with experts
Scholars
Practitioners

4. Development of SCRM maturity model

Maturity model

Level 1

Level 2

Level 3

Level 4

Level 5

Qualities

Developing Process

Components

4. Development of SCRM maturity model

Components:
Architectural Structure Dimensions Descriptions

Qualities
Understandable Adaptable Generalization

4. Development of SCRM maturity model

Development process

Scope

Design

Populate

Test

Maturity Model Development Framework. Adopted from Bruin et al (2005)

4. Development of SCRM maturity model

Stage 1 : Scope
Criterion Characteristics

The purpose of use

Descriptive describe the as-is situation A diagnostic tool

Application domain Development Stakeholders

Supply Chain Risk Management Student, Academia and Practitioners

4. Development of SCRM maturity model

Stage 2 : Design
Criterion Characteristics _Researchers _Practitioners: From CEO to staff Self-assessment/ Third party assisted _Internal: Companies want to assess their SCRM capability and improve them. _External: Assessing partners/suppliers SCRM capability Managers, Business Partners, Employees, Researchers Multiple entities/regions

Target Audience Assessment Method

Purpose of application Respondents Application

4. Development of SCRM maturity model

Stage 2 : Design
A linear five-stage model

Simplicity and Generalization

Include a general description for each

level, and detail descriptions for each

components

4. Development of SCRM maturity model

Stage 2 : Design

Resiliency
Level 1 Level 2 Level 3 Level 4 Level 5

Uncertain

Beginner

Adaptable

Managed

Optimizing

Vulnerability

4. Development of SCRM maturity model

Stage 3 : Populate
5 dimensions: 1. Leadership 2. Supply Chain Integration 3. Business Relationship Management 4. Operation Management 5. Risk Management Process

4. Development of SCRM maturity No particular strategies Establishment of SCRM model Employees are lack of SCRM strategies throughout supply
Leadership
skills and abilities. No risk culture chain Employees are empowered and attain sufficient skills Risk-aware culture Highly integrated. Effective Information and knowledge sharing. Fast reaction to problem. Many points of contact between organizations Extensive auditing of business partners. Effective communication. Mutual respects. Adaptable and flexible.

Level 1 Ad hoc

Level 5 Optimizing

Supply Chain Integration

Low level of integration, slow interaction Information security is low No conformity

Business Relationship Management

Irregular and ineffective communication Disregards of maintaining relationships

Level 1 Ad hoc Disruptions occur frequently. Bad quality control, low schedule compliane. Lack of / No regular maintainance

Level 5 Optimizing Production is under control. Reilable equipment. High schedule compliance. Excellent quality control

Operation Management

Risk Management Process

No specific processes or implemented badly. Inconsistency between different function. Reactive

Standard Risk Management processes ared fully implemented. Proactive

4. Development of SCRM maturity model

Stage 4 : Test
Three quality criteria
1. Understandable

2. Adaptable
3. Generalization

5. Discussion and Conclusion

Highest level is not always optimistic Dependent on the size of the company

5. Finding and discussion

Limitations of the model
Possible bias Lack of quatitative data Theoritical-based to construct a practical tool