SOURCING DECISIONS TO MITIGATE SUPPLY CHAIN DISRUPTION RISKS: CASE STUDY OF A LEATHER MANUFACTURER

Modern supply chains are international, complex, dynamic networks that are subject to uncertainty, vulnerability, large time-lags, and variability in delivery. One of the main reasons that have made supply chain networks more vulnerable is the raise of lean or JIT manufacturing practices. Those approaches are to eliminate all the wastes in supply chains and focus greatly on cost reduction by centralising the assets, reducing the supplier base or decreasing the stocks dramatically. However, the benefits must be weighed and balanced against the future risks of disruptions and costs. Furthermore, since sourcing policy is closely relative to supply chain continuity and security, this study examines how sourcing decisions in one large-scale leather manufacturing organisation could help mitigate supply chain disruption risks, focusing on identifying and examining key factors which have great impact on sourcing decision making processes to figure out the most appropriate sourcing policy for organisations to mitigate supply chain disruption risks. It is suggested from this study that organisations should examine external and internal potential risks to build a risk awareness culture across the networks and to introduce flexibility for more resilient supply chain networks. Since disruption risks are unpredictable and inevitable, organisations should embrace them and tackle them properly. Proper preparation before occurrences would mitigate the harm brought along by supply chain disruptions. In addition, from the research and the case study of Prime Asia Group, it is concluded that (i) sourcing policy and sourcing decisions play a significant role in protecting supply chain against disruption risks; (ii) the essential variables derived from the case study are quite different from what literature proposed. (iii) However, the variables identified and analysed do help decision makers ponder on how to find a more appropriate sourcing policy to mitigate disruption risks after the evaluation of trade-offs