SMEs in the Face of Crisis: The Supply Chain Risk Management Perspective

SMEs in the Face of Crisis: The Supply Chain Risk Management Perspective

Susanne Durst, Lidia Davies, Wolfgang Dieter Gerstlberger
Copyright: © 2022 |Pages: 16
DOI: 10.4018/978-1-7998-9715-6.ch010
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COVID-19 has shown how fragile our societies and economies are. Supply chains have particularly been affected. We all had to learn again that the basic supply of some goods is not as crisis-proof as we thought. Moreover, the strong division of labour and the concentration on a few companies in certain areas present considerable weaknesses in the case of a new external crisis such as the pandemic. Small and medium-sized enterprises (SMEs) have been affected by the current pandemic, particularly as they are highly sensitive to external threats. Using data collected between December 2020 and January 2021 through semi-structured interviews conducted with owners and/or managers of SMEs located in six different European countries (i.e., Austria, Estonia, Germany, Greece, Italy, and Portugal), the chapter aims to provide fresh perspectives on how SMEs address supply chain risk management in times of an external and dynamic crisis.
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Recent literature on SMEs' SCRM indicates that the increasing fragility of SMEs’ supply chains and SCRM is one of the dominant topics for research (e.g., Campos, de Andrade Lima, da Silva, & Fernandes, 2019; Fischer-Preßler, Eismann, Pietrowski, Fischbach, & Schoder, 2020; Hoek, 2020; Ivanov & Das, 2020). Factors behind this academic trend include the increased organizational and geographical complexity of supply chains (e.g., increasing number of partners/interactions and locations) as well as intensified inter-organizational sharing of digital data and imbalanced bargaining power for SMEs in (global) supply chains. Furthermore, several scholars note increasing political and economic uncertainty, which in turn influences SCRM in SMEs (e.g., Ferreira De Araújo Lima, Crema, & Verbano, 2020). Chowdhury, Paul, Kaisar, and Moktadir (2021) found that the global pandemic has further exacerbated the otherwise increasing number of supply chain risks, in particular, for SMEs.

Key Terms in this Chapter

Risk Management: A business process, which includes identifying and evaluating different risks, followed by an approach to control and monitor their development.

Risk: In business, any factor that has an adverse impact on profitability.

Supply Chain Risk: Any risk that affects the outcome of a supply chain relative to its target result.

Supply Chain: All the activities associated with converting and delivering a product from raw materials until it reaches the customer.

Small and Medium-Sized Enterprise (SME): This category of company refers to businesses with few than 250 employees and which have an annual revenue less than 50 million euros.

Proactive Risk Management: A systematic, comprehensive, statistically based form of risk management that considers all forms of possible failure within a business and their interrelationship with the aim to foresee and prevent potential risks. Such an approach to risk management presumes that risk awareness is strongly imbedded in an organizational culture.

Supply Chain Management: A coordinated business approach that combines all supply chain activities into a unified business process, linking different departments, carriers, and external partners.

Reactive Risk Management: This approach to risk management involves determining risk thresholds in advance and setting decision guidelines that specify possible outcomes.

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