Contingency plan selection under interdependent risks

Managing supply chain risks (SCRs) has become an increasingly strategic key factor over the last decade, aimed at pursuing and maintaining business success. These types of risks clearly pose an important challenge to managers nowadays, and evaluating uncertainty affecting business scenarios is crucial. Indeed, COVID-19 has been dangerously affecting supply chains of global manufacturers, and is indicated as a main trigger cause of supply chain disruptions for a huge number of enterprises. Major effects derived from epidemic outbreaks on supply chains should be further adequately investigated since enterprises have been adopting poor risk management plans [1] to face them. Many companies, for instance, have been assuming a passive attitude towards the management of pandemic effects, simply waiting for the situation to come back to normality at hopefully short notice. On the other side, those companies that are more proactively reacting to the pandemic have been encountering countless difficulties in implementing risk management plans at operational levels [2]. Given these preliminaries, the present contribution is aimed at proposing a way for managing risks due to COVID-19. The main objectives of the present contribution can be formalised as follows: 1. analysing critical supply chain risks and related interdependence relationships to establish priorities on mitigation/prevention actions and most influential risks; 2. proposing a structured method capable to get the vector of risks’ weights and ease the selection of the most suitable contingency strategy on the basis of companies’ needs. These objectives are herein addressed by means of a Multi-Criteria Decision-Making (MCDM) approach based on the use of the Analytic Network Process (ANP), suggested to analyse and weight risks by taking into account relations of dependence existing among the same risks and effects. Results will be formalised in the field of automotive industry as offering a significant input for the process of contingency strategy selection while simultaneously considering uncertainty affecting evaluations on the basis of the specific business context features.