Assessing Supply Chain Resilience to Mitigate Supply Chain Risks : A case study of the inbound logistics @ Volvo CE

Sammanfattning: In recent years, the frequency of disruptive events in supply chains has increased. This is partly due to the fact that supply chains are more globalized and more complex, with deeper tiering among suppliers. This makes the supply chain more vulnerable to risks. Supply chain risks that come with the dependencies of global suppliers have been evident due to unexpected global events such as the Covid-19 pandemic, the obstruction in the Suez Canal, and the Russia-Ukraine war. To mitigate supply chain risks, a company needs to have a resilient supply chain. Volvo Construction Equipment, a world-leading manufacturer of premium construction equipment, has experienced some particularly challenging years due to global occurrences with material shortages, capacity constraints, and supply routes disruption. This has built up stress in the organization, both among processes and employees. To be able to plan for the coming years of high uncertainty, Volvo CE wants to investigate how they can anticipate and mitigate various risks and resist market fluctuations to create a more resilient supply chain. Therefore the purpose of the research was formulated as: The purpose of the research is to suggest how Volvo Construction Equipment AB can mitigate supply chain risks to secure the future supply chain in a volatile market. To facilitate the fulfillment of the research’s purpose, three research questions were developed concerning risk identification, assessing resilience capabilities, and assessing risk mitigation strategies. The first research question, RQ1, identified Volvo CE’s supply chain risks and the vulnerability of the risks. The supply chain risks were identified through focused group discussions with Volvo CE employees and the most vulnerable risks were determined through a survey with responses from the participants in the group discussions. Three risks were considered the most vulnerable in Volvo CE’s supply chain; lack of raw material and component shortage, lack of labor and competence in production at supplier, and shutdown of supplier factory due to unexpected events. The second research question, RQ2, answered which resilience capabilities Volvo CE possesses today and which should be improved. The resilience capabilities were assessed qualitatively through semi-structured interviews. The interview answers were then interpreted into what SCRES elements Volvo CE possess. It was concluded that all resilience capabilities can be improved but two out of five capabilities, ability to anticipate and ability to recover, were considered to have the most improvement potential as they contain a large proportion of SCRES elements that are not fully possessed today. Through semi-structured interviews and a cross-question analysis with RQ1 and RQ2, the third research question, RQ3, regarding the assessment of risk mitigation strategies could be answered. Based on the result of all research questions, five risk mitigation strategies were suggested for Volvo CE. These aimed to improve Volvo CE’s resilience capabilities with the most improvement potential to be able to mitigate the most vulnerable supply chain risks. The suggested risk mitigation strategies were supply chain understanding, SCRM culture, supplier relationship, backup supplier, and scenario planning. By working with these strategies, Volvo CE could significantly increase its resilience and thus create an organization better able to mitigate supply chain risks to secure the future supply in a volatile market.