Water resource and risk management in supply chains

Critical management of natural resources such as water has become a topic of significant interest within the research community and indeed, more widely. The need for business engagement in water resource management has become a serious consideration for achieving both sustainable development goals and business sustainability. Whilst considerable research exists on the nature of water resources from the ecological perspective, there lacks a comprehensive understanding of how organisations engage with and manage their supply chain water resources. Furthermore, the existing research lacks framework, methodology and tools for managing water risk in the supply chain, thus limiting the ability of organisations to implement appropriate supply chain water resource management practices. The proposed research, through a systematic literature review in the domain of resource efficiency in the supply chain management context, identifies the trends in natural resource efficiency research, focusing on the firstly the key resources and secondly the tools and methods utilised by researchers to address the challenge of natural resource efficiency. The findings of the literature review show that the amongst natural resources, water remained a critical opportunity to achieve resource efficiency within the supply chain. The research on managing water resource and water risk has received limited attention in the operations and supply chain management domain. Exploring this research opportunity, the proposed research identifies water resource management practises, drivers, and barriers to engagement in these practises across the supply chain through applying an institutional theory lens. In addition, interview findings identified water risk management as a critical activity within water resource management. A set of text mining techniques were employed to identify supply chain water risks and reveal strategies employed by organisations to mitigate and manage the supply chain water risks. These findings led to the development of a novel supply chain water risk management framework, which could be used in organisations to identify, manage and mitigate supply chain water risk. Through consolidation of the research findings and using the supply chain water risk management framework, a novel supply chain water risk exposure indicator (SCWRI) was constructed considering three key components of supply chain water risk: water resources, organisational and supply chain partner risks. Using the Analytical Hierarchy Process (AHP) for weighting determination, the indicator proposes a novel way to assess the exposure of a firm to supply chain water risks. A hypothetical supply chain scenario was used to demonstrate the use of the indicator as a data driven tool for evaluating supply chain water risk exposure. Overall, the proposed research provides a strategic approach to supply chain water resource management with a specific focus on supply chain water risk management. The framework for supply chain water risk management presents an opportunity for SCM to strategically act to further the agenda of resource efficiency. Finally, the proposed indicator can act as a guiding tool to support strategic water resource management within organisations.