Cluster Approach to Supply Chain Risk Management and Lean Practices

Over the years, supply chain risk management has received a lot of attention from academia and industry due to the harmful impacts of supply chain disruptions on business operations and competitiveness. Several papers suggest that the cost-reducing part of lean practices tends to supply chain networks more vulnerable to risk factors. There have not been many studies, which test how risk management and lean practices affect performance. In a dataset collected from 198 US companies, this study uses cluster analysis to identify four clusters based on the levels of risk management and lean practices (high to low) and investigate their impact on performance. The analysis concludes that firms achieve the highest financial performance if they implement both risk management and lean practices at a higher level than others do.