5 Case study
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To test the above theoretical findings and ISM's applicability for practical use, two case studies with a German industry and a trade company, respectively, were conducted. The conclusions in the previous chapter were drawn from results of group discussions between fellow researchers in the field of logistics and supply chain management. The two case studies aimed to show the methodology's ability to structure supply chain risks that originate within a real company or from one of this company's suppliers. On this account, a questionnaire with preselected process, control, supply and environmental risks was handed to executives and senior managers with the two companies to collect their assessment of the risks' dependencies.
In the first case study (company A), the ISM evaluation was conducted in a well‐guided process, i.e. the participants had the opportunity to clarify the meaning of every risk during the assessment process and they were reminded by the moderator to concentrate on the direct linkages between each pair of risks. As a result of the case study A, the analysis gave the participants a hierarchy as well as a digraph that showed the risk paths and their interdependencies. To conclude whether the ascertained results showed practical use and were representative for company A's risk situation, the digraph was discussed with the participants in a second round during which the supply chain experts were asked to interpret the linkages and importance of all risks from the questionnaire and draw a risk map based on their experience. The results of the second discussion with the supply chain experts (A) were positive and showed great similarity between the risk map of the total risk situation based on expert judgement and the outcome of the ISM algorithm.
The second case study (company B) was less guided with the participants answering the questionnaire after a brief instruction without any further support. Thus, the outcome of this second case study was less positive and showed several cycles in risk linkages. Also the comparison with risk maps based on the experts experience showed far less similarities than in case study A. A subsequent analysis of this result with the participants showed two reasons why the risk map and the digraph had less in common than in the first case:
1. the assessment of the dependencies between the risks did not focus solely on bidirectional linkages but also included knowledge of transitive connections; and
2. the risks were described less specifically in their definitions without the possibility to clarify the exact meanings during the evaluation process.
Hence, the findings of the case studies' can be summarised as described below:
• First, ISM was proven as a useful methodology to structure supply chain risks in an easy and distributed approach that can also be carried out in a step‐by‐step process on several manufacturing stages.
• Second, the input to the algorithm (risks) has to be well‐defined to give the participants an exact understanding of all risks that have to be assessed, i.e. the better the input to ISM is prepared the better the outcome and representation will be.
• Third, the participating experts have to be instructed to focus solely on bidirectional linkages between two risks. There must not be any transitive dependencies considered when the linkage between two risks is assessed. Otherwise, the algorithm will produce too many cycles and therefore will not derive a hierarchy based on the input.
• In addition, a moderated process proved to be more reliable than an assessment based on paper questionnaires only. Thus, a possibility for all participants to post questions and clarify their understanding of the risks has to be considered in any application.