Supply Chain Risk Management in Automotive Small and Medium Enterprises in Malaysia

Abstract:

The current automotive supply chain is facing more risks than ever due to the heavy dependencies of local automotive component manufacturers with foreign and established global producers. In response, this paper is designed to explore the supply chain risk management (SCRM) practice of automotive industry in Malaysia. In-depth case studies were conducted at two automotive components manufacturers based on three constructs of SCRM framework including the SCRM process, tools used in SCRM and techniques to minimize risk. The case studies revealed that the automotive companies implemented failure mode and effect analysis (FMEA), 5 why analysis, impact-aspect study, and recovery planning to manage their supply chain risks. In addition, brainstorming techniques, experience and expert judgment were mainly used as risk identification and assessment techniques. Most of the risks encountered during operations were dealt by reactive strategies such as back-up suppliers and increasing buffer stocks. Overall, the automotive companies are heading towards more formal and sophisticated SCRM especially with the certification of TS16949 although there are still plenty of rooms for improvements in the risk identification and risk assessment techniques since very limited quantitative techniques were evidenced.

• Periodical: Applied Mechanics and Materials (Volumes 773-774)
• Pages: 799-803
• DOI: https://doi.org/10.4028/www.scientific.net/AMM.773-774.799
• Online since: July 2015
• Authors: Norlaile Salleh Hudin*, Abu Bakar Abdul Hamid
• Keywords: Malaysian Automotive Industry, Risk Management Practices, Risks, Supply Chain

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