A quantitative risk assessment methodology and evaluation of food supply chain

DOIhttps://doi.org/10.1108/IJLM-08-2016-0198
Published date13 November 2017
Date13 November 2017
Pages1272-1293
AuthorRishabh Rathore,Jitesh J. Thakkar,Jitendra Kumar Jha
Subject MatterManagement science & operations,Logistics
A quantitative risk assessment
methodology and evaluation of
food supply chain
Rishabh Rathore, Jitesh J. Thakkar and Jitendra Kumar Jha
Department of Industrial and Systems Engineering,
Indian Institute of Technology Kharagpur, Kharagpur, India
Abstract
Purpose The food supply chain is exposed to severe environmental and social issues with serious
economic consequences. The identification and assessment of risk involved in the food supply chain can help
to overcome these challenges. In response, the purpose of this paper is to develop a risk assessment
framework for a typical food supply chain.
Design/methodology/approach An integrated methodology of grey analytical hierarchy process and
grey technique for order preference by similarity to the ideal solution is proposed for developing a
comprehensive risk index. The opinion of the experts is used to illustrate an application of the proposed
methodology for the risk assessment of the food supply chain in India.
Findings Valuable insights and recommendations are drawn from the results, which are helpful to the
practitioners working at strategic and tactical levels in the food supply chain for minimising the supply
chain disruptions.
Research limitations/implications The risk quantification for the case organisation is primarily based
on inputs collected from the experts working for Indian food supply chain, and so the generalisation of the
results is limited to the context of developing countries. However, the generalisability of the proposed risk
quantification methodology and key insights developed in the food supply chain will assist practitioners in
policy making.
Practical implications The risk priorities established by this research would enable an implementation
of systematic risk mitigation strategies and deployment of necessaryresources for leveraging the efficiency of
food supply chain.
Originality/value Specifically, this research has delivered a risk quantification framework and
strengthened the inquiry of risk management for the food supply chain.
Keywords Analytic hierarchy process (AHP), Risk management, Food supply chain,
Technique for order preference and similarity to ideal solution (TOPSIS)
Paper type Research paper
1. Introduction
Risk is involved in every business, and the Indian food supply chain is not an exception.
The food supply chain in India is highly complex because of its diversity and involvement of
large number of stages and nodes in the distribution network. This leads to shortage
of storage space, rise in labour cost, etc. Moreover, natural calamities, inadequate
transportation facility and other infrastructures make the operations of food supply chain
inefficient. To minimise the loss in food supply chain, risk prioritisation and efficient risk
management are essential.
According to Food and Agriculture Organization (2012) report, the number of
undernourished and hungry people in India and China accounts for 43 per cent of the world
population. This is mainly due to corruption, unavailability of food, and food insecurity.
Other Asian countries like Pakistan and Bangladesh also face the similar kind of situation.
Most countries in Southern Asia, for example Afghanistan, India, Pakistan and Sri Lanka,
The International Journal of
Logistics Management
Vol. 28 No. 4, 2017
pp. 1272-1293
© Emerald PublishingLimited
0957-4093
DOI 10.1108/IJLM-08-2016-0198
Received 6 September 2016
Revised 7 November 2016
29 December 2016
Accepted 1 January 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
This research is conducted in the context of project titled, Transportation management to implement
NFSA (TMI)sponsored by the Ministry of Human Resource and Development (MHRD), Department
of Higher Education, Government of India (Sanction Letter No. F. NO. 4-25/2013-TS-I).
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IJLM
28,4
have made progress towards the international hunger targets, even though the pace has
been considerably slow for them to reach either the World Food Summit target or the
Millennium Development Goal target.
Risk management in food supply chain is an emerging concern as it inadequately
handles the rising risk level. This in turn multiplies supplier ( farmer) disruptions, logistics
delay, food preservation, and safety issues. The stated goal of Food Corporation of India
(FCI) is to transport the foodgrains from procuring states to consuming states at the lowest
possible cost with the highest quality, safety and efficacy.
The food supply chain is exposed to severe environmental and social issues with serious
economic consequences. The emphasis should be put on minimising and mitigating risk in
every step of the food supply chain. This demands an identification and assessment of the
relevant risks associated with the various processes of food supply chain. In response, this
research sets the following motivations. It attempts to develop a risk assessment framework
for a typical food supply chain. However, the analysis of risk requires subjective inputs from
the various stakeholders, which make the risk assessment difficult. For dealing with
subjectivity, this paper proposes an integrated risk quantification approach based on grey
analytical hierarchy process (AHP) and grey technique for order preference by similarity to
the ideal solution (TOPSIS) for the food supply chain. The research extends critical insights
and recommendation which will enable the food supply chain practitioners to minimise
supply chain disruptions by adopting suitable measures at strategic and tactical levels.
In view of the motivations narrated above, the research reported in this paper intends to
address the following research questions:
RQ1. How an integrated approach of grey-AHP and grey-TOPSIS is effective in
evaluating and quantifying risk for the food supply chain?
RQ2. What are the priorities of risks and sub-risks for the food supply chain in the
developing country, especially India?
RQ3. How to determine risk index using the priorities of various risks and sub-risks for
formulating an appropriate risk mitigation strategies for the food supply chain in
the context of developing country?
This research makes few contributions to the present body of knowledge. First, the issue of
risk quantification in food supply chain has received limited attention in the literature. This
research strengthens the contribution in this domain. Second, this work can be seen as the
first contribution in the domain of risk quantification for the Indian food supply chain.
Third, the focus on the Indian food supply chain represents the context of a developing
country, an area which has not received much attention in the present state-of-the-art.
Fourth, this paper makes the first-time attempt for proposing an integrated multi-criteria
decision-making (MCDM) risk quantification methodology based on grey-AHP and grey-
TOPSIS with an objective to accommodate subjective opinions of the experts to enhance
computational efficiency. This has a key contribution in the domain of decision making.
The remainder of the paper is structured as follows. Section 2 analyses the associated
theoretical background on risk management, food supply chain risk, grey-AHP, and grey-TOPSIS.
Section 3 develops a detailed categorisation of risk in the food supply chain. Section 4 describes
the proposed risk quantification methodology. Section 5 checks the robustness of the proposed
methodology. Section 6 outlines the managerial implications of the research. Finally, the paper
ends with Section 7 which gives a summary of the paper along with conclusions.
2. Theoretical background
In the past few years, focus on supply chain risk has increased enormously considering its
influence on the global economy. Gaudenzi and Borghesi (2006) proposed an AHP-based
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methodology

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