Supply chain risk assessment in the fashion retail industry: An analytic network process approach

In today’s global markets, characterized by extremely fast changes in technology and customer’s demand, and by product life cycle getting shorter and shorter, a single firm has not the ability to be competitive if it is not included in a network that, operating as a single entity, is able to react to demand dynamism and volatility. Therefore, existing supply chains, structured in a global sourcing view, are highly vulnerable to perturbations resulting from a strong dependence on other network’s players, such as suppliers or logistics providers. In this complex and competitive context, properly assessing and managing risks connected to the different stages of the value chain, as well as external and not directly controllable risks, means being able to ensure continuity in supply. This paper focuses on the particular field of the fashion retail industry since its highly unpredictable demand and extremely short life cycle make it very important to analyse risks connected to the supply chain. The particular case we are referring to is represented by a fashion company that manages an extended network of wholesalers, direct operated stores, franchising mono-brand stores and factory outlet stores main aim of the presented work is to prioritise the list of identified risk factors by adopting the Analytic Network Process approach. This method is, in fact, more suitable for real complex problems that cannot be completely represented through a simple hierarchical structure. The obtained results show that supply chain efficiency, in terms of correct management of both material and informative flows, is considered the most crucial part also for a demand-driven supply chain as the fashion industry one which, in addition, is constantly seeking for customer tastes and always changing trends.