Research On How Perception Of Disruption Risk Affect Procurement Decision And Performance

As the environment becomes increasingly complex and uncertain, supply disruption is more and more possible to occur, bringing devastating loss to both companies and supply chains. Thus, it is important and urgent to research more on perception of disruption risk and related procurement decisions. This field has already attracted much attention from scholars abroad; however, related research is scarce in China. Based on such situation, subjects in this field are explored in this paper so that they can help companies better know and perceive risk, make procurement decisions more scientifically, and finally improve the performance of both companies and supply chains.Base on analysis of factors which influence the perception of disruption risk from four angles (including the procurement environment, procurement company, supplier company and materials purchased), three kind of measurement models of disruption risk are discussed:two-factor model, multi-facet model and comprehensive perception model. Then how perception of disruption risk affects related procurement decision is studied, and also a structural equation model is built to quantitatively analysis the impact of perception on the decision of search for alternative supplier. The result shows that the decision of searching for alternative supplier is positively related with the perception of disruption risk. That is, as the perception of disruption risk is larger and larger, there is more and more possibility that alternative supplier will be searched. Finally, a conceptual procurement model is raised, embracing three kinds of risk-reduced procurement strategies. And on basis of this framework, a specific decision which is formulated by perception of disruption risk is realized and simulated by system dynamics, and also performance analysis is conducted on such specific decision. The result shows a complex non-linear relationship between perception of disruption risk and the performance. This provides theoretical support for indicating the intrinsic element which influences the performance, and helps managers manage the procurement decision-making process from the root of risk perception, and finally improve the performance of both companies and supply chains.