Procurement riskmanagement to reducesupply disruptions : A qualitative study of Swedishapparel brands during COVID-19

Sammanfattning: The COVID-19 outbreak has brought disturbances to a large number business as well as whole industries disrupting their supply chains, proving that most of today's companies don't have sufficient systems or strategies to evade or reduce major supply chain disruptions. One industry that was affected heavily is the fashion industry who is characterized by short lead times, globalized supply chains and volatile customer demand. Production stops and lockdowns in the asian region and difficulties with shipping and transportation have led to devastating consequences for a large number of apparel companies. Creating a need for different strategies to enforce the resilience of the supply chains. The procurement process plays a crucial part in this as it refers to the obtaining of materials, products or services and sourcing suppliers, creating a strong link between the resilience of the supply chain and the company's procurement sector.In this paper we aim to explore and provide insight on which procurement risk management strategies brand owning apparel companies in Sweden have utilized in order to reduce the supply disruptions caused by the pandemic, the purpose with our thesis is to provide insight on how these companies have adapted their PRM strategies to be formidable in the more risk-prone environment that COVID-19 has created. Ultimately the goal is to identify success factors and provide theoretical insight and practical recommendations for practitioners in the industry.   We have conducted qualitative research using an inductive approach and explanatory research design. The data derives from interviewing several different swedish brand owning apparel companies and was analyzed using grounded theory. Our findings suggest that supplier diversification has become more usual practice due to the supply disruptions. Mainly nearshoring has become more prevalent than before COVID-19 according to our findings. We also found that apparel companies have increased the usage of agile tools to reduce supply disruptions, referring to more flexible ordering and agile inventory management. We also found that collaborative partnerships were used as a successful strategy to reduce supply disruptions. Lastly we also found several apparel companies digitalizing their procurement process following the restrictions caused by the pandemic. Even though our theoretical frameworks suggest using demand management tools to reduce the impact of supply disruption, our empirical findings did not support such PRM-activity. Our study contributes to the literature by contextualizing various procurement risk management strategies that apparel brands used to reduce the supply disruption, furthermore we also found new trends regarding nearshoring, inventory management and the usage of new technologies to present samples, thus providing new insights to the research area. Our paper also provides practical recommendations to sourcing managers within the apparel industry who are seeking to engage in procurement risk management strategies to reduce supply disruptions, as our findings can be used as a basis for decision making. Furthermore we recommend managers to firstly identify the root of the disruptions to find the proper responsive action using our proposed model to implement both proactive and reactive strategies to reduce the impact of the supply disruptions. Finally, we recommend companies to start the process to digitalize their procurement process. This has been a necessity for most apparel companies during COVID-19 and we believe that it can have a positive effect in the post-covid world as well.