Small and medium-sized enterprises (SMEs) form the backbone of developing economies, yet they are disproportionately hit when supply chains break down. In India, past disruptions have harmed the vast majority of small firms, with manufacturers suffering the most — with many still struggling to recover.
In a study published in the KeAi journal Risk Sciences , a team of researchers developed a novel quantitative framework that enables SMEs to systematically assess their supply chain risks and take proactive steps to build resilience.
"Most existing risk assessment methods were designed for large corporations with rich historical data and dedicated risk management teams," explains corresponding author Sudipta Ghosh from the Indian Institute of Packaging. "SMEs in developing economies simply do not have those luxuries. Hence, we need a framework that could work with expert knowledge alone and still deliver actionable results."
To that end, the team combined two established methods — the Analytic Hierarchy Process (AHP) for prioritizing hazards based on expert judgment and Hazard Identification and Risk Assessment (HIRA) for scoring risks by their likelihood and severity — and tested this integrated approach through a real-world case study of a manufacturing SME in India that experienced a complete supply chain disruption during the pandemic.
Through literature review and consultation with a panel of 30 experts from industry and academia, the researchers identified 11 key hazards across the supply chain — from the scarcity of raw materials and inventory stockouts to distribution network breakdowns and demand uncertainty.
The results were striking: the case enterprise's overall supply chain fell within the high-risk zone, with internal risks — particularly in procurement and production — posing a greater threat than external ones. The scarcity of raw materials, inventory stockouts, and distribution network breakdowns emerged as the most severe hazards.
"What surprised us was the extent to which internal operational risks outweighed external ones," notes co-author Deeya Bandyopadhyay from Durgapur Institute of Advanced Technology and Management. "This tells SME managers that strengthening their own procurement strategies and inventory management can make a significant difference."
The study also proposed targeted control measures for each high-risk hazard, including supplier diversification, buffer stock strategies, and multi-channel distribution synchronization. After applying these measures, the residual risk levels dropped to acceptable thresholds — demonstrating that proactive management can dramatically improve resilience.
The framework is designed to be practical and accessible: it does not require expensive software, advanced technical training, or large datasets, making it particularly suited for resource-constrained SMEs in emerging economies.
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Contact the author:
Sudipta Ghosh
Indian Institute of Packaging, Kolkata, West Bengal 700091, India
Email: ra2kol.iip@iip-in.com
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Risk Sciences
Case study
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Reinforcing small- and medium-sized enterprises' resilience to future disruptions: A novel decision-making framework for supply chain risk quantification
The authors certify that they have NO affiliations with or involvement in any organization or entity with any financial interest or non-financial interest in the subject matter or materials discussed in this manuscript.