Supply Network Risk Analysis from Social and Bayesian Network Perspectives

Abstract

As firms are exposed to various risks, supply network risk management has become important. Previous studies have conducted supply network risk research from various perspectives, particularly due to the severity of supply disruption to buying firms. While the existing studies have identified those suppliers based on centrality measures of their positions in the supply network mostly from the social network perspective, there was also a limitation in quantitatively assessing the suppliers’ disruption risk in the network. Therefore, this study intended to theoretically expand and develop the study on the supply network risk from the existing social network perspective by applying the Bayesian network analysis. So we used the Bayesian network analysis to quantitatively assess the suppliers’ disruption risk in the supply network and measure their risk impact on the focal firm. Through it, we identified the network properties of the critical suppliers that the focal firm should pay attention to for its effective supply network risk management and suggested related insights.