Assessment and prioritization of Supply Chain Risk: Development of AHP model in Aerospace Industry

Abstract

In 21st century, competition has shifted from companies to supply chain systems of the industry and aero industry is not an exception. As the industries is highly technology intensive, involve huge cost, operate within stringent quality standards and safety norms, managing industry supply chain becomes a tremendous task of supply chain managers. The risk associated with supply chain affects industry performance, hence needs greater attention. This paper presents general risk taxonomy specifically the risks affects the industry supply chain. AHP (Analysis of Hierarchical Process) method is used for analysis of risk factors. It is hoped that this method will help manager, suppliers, auditors, and consultants etc. to manage their systems better. All risks involved in aerospace supply chain are identified, classified, ranked basing on their risk exposure in aero industry eco system. AHP analysis shows that critical risk originate from suppliers risk chain side. The most important risks in aerospace supply chain is found out to. Risk of improving engineering process (RI1) ranked one with weightage 18.87% followed by incident impacting supplier facility, breakdown of IT infrastructure, risk of not retaining talented workforce and supplier quality problem rank second, third, fourth, five respectively with global weights 9.93%,7.57%,5.43 and 4.97%.