Prioritizing Supply Chain Risk for Flexibility and Resilience: A House of Risk Approach

Abstract

Indonesia's inorganic chemical industry, a national priority sector, faces mounting supply chain uncertainty driven by its heavy reliance on imported raw materials. However, research combining empirical risk factor validation with measurable risk prioritization in this sector remains scarce. This study aims to identify and validate the risk factors contributing to this uncertainty and determine risk priorities, laying the foundation for mitigation strategies that strengthen Supply Chain Flexibility (SCF) and Resilience (SCRes). Based on judgments from five Supply Chain Management experts, the study uses a descriptive quantitative design that combines the Content Validity Index (CVI) to validate risk factors with House of Risk (HoR) Phase 1 for risk prioritization. Results show nine of 14 initial risk factors were valid, with Strategic, Supply, and Quality risk as the most conceptually relevant. However, ARP results revealed the opposite pattern: rather than these three, Demand risk in the planning process, particularly weak forecasting and limited demand information sharing, emerged as the highest-contributing risk agent, followed by logistics and raw material inventory risk. Eighteen of 34 risk agents contributed to 80,91% of total risk, consistent with the Pareto principle. These findings confirm that a risk's conceptual relevance does not always reflect its quantitative urgency, indicating mitigation should prioritize forecasting systems, information visibility, and supply diversification as a foundation for balanced SCF and SCRes improvement in the inorganic chemical industry.