Small and medium-sized enterprises (SMEs) are widely recognised as the backbone of developing economies, driving employment, innovation, and local growth. Despite their importance, they remain especially vulnerable when supply chains are disrupted. In India, past supply chain shocks have affected a vast majority of small firms, with manufacturing businesses bearing the brunt of the impact. Many of these enterprises continue to face lingering challenges, struggling to stabilise operations and regain their footing in an increasingly uncertain environment.

A recent study published in the Risk Sciences journal by KeAi introduces a novel quantitative framework aimed at helping SMEs better understand and manage supply chain risks. Developed by a team of researchers, the framework provides a structured way for small firms to assess vulnerabilities and take proactive measures to strengthen resilience. By offering a practical and systematic approach, the study seeks to bridge a long-standing gap in risk management tools available to resource-constrained businesses.

According to the corresponding author, Sudipta Ghosh from the Indian Institute of Packaging, most traditional risk assessment methods are tailored to large corporations that have access to extensive historical data and dedicated risk management teams. SMEs in developing economies rarely have such advantages. As a result, the research team focused on designing a framework that could rely primarily on expert knowledge while still producing meaningful and actionable insights for decision-makers.

To build this framework, the researchers integrated two well-established methodologies: the Analytic Hierarchy Process (AHP), which prioritises risks based on expert judgement, and Hazard Identification and Risk Assessment (HIRA), which evaluates risks according to their likelihood and severity. This combined approach was tested through a real-world case study involving a manufacturing SME in India that experienced a complete supply chain breakdown during the COVID-19 pandemic. The case study provided a practical context to validate the framework’s effectiveness.

Through an extensive literature review and consultation with a panel of 30 experts from both industry and academia, the study identified 11 critical hazards affecting supply chains. These ranged from shortages of raw materials and inventory stockouts to disruptions in distribution networks and fluctuations in demand. The findings revealed that the enterprise under study fell within a high-risk category overall. Notably, internal operational risks—particularly those related to procurement and production—were found to pose a greater threat than external disruptions. Co-author Deeya Bandyopadhyay from the Durgapur Institute of Advanced Technology and Management highlighted that improving internal processes such as procurement strategies and inventory management could significantly enhance resilience.

Importantly, the study did not stop at identifying risks; it also proposed targeted mitigation strategies for each major hazard. These included diversifying suppliers, maintaining buffer stock, and synchronising multiple distribution channels. When these measures were applied, residual risk levels dropped to acceptable thresholds, demonstrating the tangible benefits of proactive risk management. The framework is intentionally designed to be accessible, requiring neither costly software nor advanced technical expertise. This makes it especially valuable for SMEs operating in emerging economies, where resources are often limited but the need for resilience is critical.

More information: Sudipta Ghosh et al, Reinforcing small- and medium-sized enterprises’ resilience to future disruptions: A novel decision-making framework for supply chain risk quantification, Risk Sciences. DOI: 10.1016/j.risk.2026.100052

Journal information: Risk Sciences Provided by KeAi Communications Co., Ltd.