Supply Chain Risk Factors’ Assessment in the Nigerian Pharmaceutical Industry

Abstract

The study assessed supply chain risk factors (SCRF) in the Nigerian pharmaceutical industry. Primary data were sourced for this study through a thematic questionnaire served on 300 randomly selected registered pharmacies. By means of bipolar semantic differential scales, respondents were assessed on semantic spaces, the probability of occurrence as well as projected impact of upstream, internal, and downstream supply chain risk factors. Data collected were analysed using probability-impact matrix, and other appropriate descriptive statistics. The results identified 18 risk factors in the Nigerian pharmaceutical supply chain. The risk factors with the greatest probability of occurrence was “excess stocking of products” (probability of 0.583, industry internal sector risk average probability was 0.492), followed by “increase in product prices by suppliers” (0.577, industry upstream sector average was 0.491). Risk factor with the greatest impact assessment was from the downstream; it was “failure to deliver products to customers” (4.453, industry downstream average was 4.112). The next was an upstream factor – “supplier product quality problem” (4.411, industry upstream average was 3.341). “Product expiration on the shelf” had the highest criticality rating (2.318), followed by “increase in product price by suppliers” (2.165), while “poor merchandising” (1.239) had the lowest criticality rating. With these findings, pharmaceutical firms in Nigeria are better equipped to manage and perhaps mitigate risk factors in their supply chain.

Keywords: Supply chain risk management, supply chain, probability, risk-impact matrix