Abstract
Background:
A comprehensive understanding of risk management capabilities within supply chains in manufacturing organisations is crucial for minimising delays and fostering resilience within the supply chain departments. Despite an increase in academic research focusing on supply chain disruptions, there remains a significant gap in studies addressing the specific supply chain risks faced by manufacturing companies in the South African market and their capabilities. This qualitative study aims to outline the most significant supply chain risks in manufacturing and to identify corresponding risk mitigation strategies.
Objectives:
This study identified and assessed the primary potential risks within the supply chain that impact manufacturing companies. Moreover, the study determined the effects of supply chain risks on the operational performance of manufacturing firms. Finally, the effective risk mitigation strategies that can be employed by manufacturing companies and assess their current risk management capabilities were investigated.
Methods:
In-depth interviews were conducted with expert professionals in supply chain management and related fields. The interviews were subsequently transcribed and analysed using thematic qualitative analysis to address the objectives of the study. Purposive sampling was used to select participants; the study includes ten participants who are industry experts. The final sample size consisted to ten participants.
Results:
The study identified several significant supply chain risks, including critical raw material shortages, prolonged lead times, inadequate infrastructure, and political factors. The study delineated the crucial impact of supply chain disruptions on organisations and explored diverse risk strategies, some of which are susceptible to mitigation. The findings indicate that many organisations lack the necessary resources to effectively mitigate these risks. Some organisations also do not have comprehensive business continuity plans, as existing contracts often bind them to specific suppliers; this, in turn, affects business continuity should that particular supplier be unable to fulfil its obligations.
In terms of the first objective, the results suggest that raw material shortages are the main potential risks, this mainly due to the fact that when there is no availability, production can come to a standstill, and that directly affects business continuity. Objective two reveals that supply chain risks primarily impact financial implications and the management of supplier-customer relationships. Specifically, supply failures lead to
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escalated business expenses, a reduction in revenue and/or profitability, and erode customer trust in the supplier, potentially harming future business opportunities. In addressing the third objective, the results suggest that implementing new modern technology and providing proper training for employees could be effective strategies for risk mitigation.
Main recommendations:
The study concludes that it is imperative for organisations to develop and implement effective risk mitigation strategies at every critical stage of their supply chain. A rigorous approach to risk management, such as structured processes that involve risk identification, risk assessment, risk prioritisation, and potential risk mitigation strategies, is essential for ensuring that an organisation's supply chain can absorb risks without compromising business continuity. The study identified the following three major general recommendations for organisations facing supply chain challenges: (i) this study recommends that manufacturing companies consider having a diversified supplier base, given the severity of raw material shortages. (ii)the study recommended that organisations should implement continuous learning for their employees, citing internal employees' competence as a contributing factor to some shortages or quality defects.