The automobile sector in India is one of the key segments of Indian economy as it contributes to 4% of India’s gross domestic product (GDP) and 5% of India’s Industrial production. Through this study, the effect of risk and frangibility in the Indian automobile supply chains were observed.
A Failure Mode and Effects Analysis (FMEA) technique is used to prioritize the various types of risk into zones, namely high, medium and low risk factors. Also, the best–worst method (BWM) is used to find out the weightings of different risk factors to address frangibility in supply chains.
Various risk factors in the automobile supply chains were observed and prioritized in the study. Using risk priority ranking technique like FMEA, the risk factors under main risk drivers of supply chains were ranked considering their overall effects, into various risk zones like high, medium and low. Further, the BWM was used to weigh and rank these risks.
The results can help organizations to prioritize various risk factors and propose appropriate risk mitigation strategies to upsurge supply chain reliability, efficiency and responsiveness.
By identifying to what risk zone the particular risk factor belongs; managers can come up with a proper risk mitigation strategy. This can help them understand how much resources need to be invested, thereby saving useful production time and cost.
The theoretical implications of the study are based on the Normal Accident Theory perspectives, where it is assumed that complex and tightly coupled systems can inevitably fail. Managers in the automobile industry can consider reducing complex and tight coupling, while designing their supply chain networks.
The risk factor identification and prioritization of the same in the Indian automobile industry is scarcely attempted in literature. A combination of FMEA and BWM methods was used for effectively prioritizing the same.
