Enhancing Resilience of Oil Supply Chains in Context of Developing Countries

Abstract

Oil supply chains play a vital role in the day-to-day functioning of national economies and obstruction in its services can lead to dire consequences. For this purpose, it is imperative for oil supply chains to be on guard against all probable vulnerabilities and develop adequate protection mechanisms. This research study aims to identify the most important vulnerabilities for oil supply chains in the context of Pakistan, a developing country. Subsequently, these identified vulnerabilities were used to design a protection framework, embodying different supply chain capabilities. For this purpose, this study employs a hybrid Multi-Criteria Decision Making approach. Full Consistency Method (FUCOM) has been used to prioritise vulnerabilities and Fuzzy Quality Function Deployment (QFD) has been used to identify those capabilities that can ensure protection against these vulnerabilities. Results indicate that crude oil price instability, fuel price shocks, unpredictable demand, and information and communication disruptions are the most important and catastrophic vulnerabilities in the context of Pakistan’s oil industry. For mitigation of these vulnerabilities, oil supply chains need to incorporate real-time information sharing, visibility, e-procurement, traceability, and transparency as resilience measures. These recommendations are of considerable importance to Pakistan’s oil industry and policy-making authorities. Moreover, this study fulfils the research gap by focusing on enhancing the resilience of Pakistan’s oil supply chains, with the aid of MCDM techniques.