Identifying Risks in the Supply Chain of Materials at Volvo Cars A Concept Modelling of Environmental, Social, and Technical Risks

Abstract

A few commercial companies in different industries have developed tools for identifying and assessing both environmental and social material impacts throughout the supply chain. Facing the contemporary climate and environmental crisis, companies need to advance their sustainable development and acknowledge sustainability risks. Volvo Cars is a global Swedish premium car company that wants to develop their own tool for managing sustainability risks. To achieve their sustainability goals, the risks related to the materials used in their products need to be understood. Therefore, this thesis was conducted on behalf of Volvo Cars to lay the foundation for a conceptual model for identification of environmental, social, and technical risks. The model aims to function as a guide in research & development and procurement of materials. Collective understanding of terminology is crucial for a model’s utility. Through literature research, interviews and workshops, the terminology used in this conceptual model was polished while compiling issues important to both external and internal stakeholders. The model is based on A Relational Theory of Risk by Boholm & Corvellec (2011), which defines risk as a combination of three elements i.e., object at risk, risk object, and the relationship of risk connecting the two. By first determining what is important to protect, cause-effect chains can be mapped, identifying the threatening objects that could potentially cause harm. The final model includes 15 objects at risk divided into three systems: the Nature system, the Social system, and the Technical system. Additionally, the model includes suggested indicators each object at risk to enable quantification and comparison between different material options. It has become clear that having a shared understanding of the meaning of different concepts is crucial for developing a model like this. It is therefore important to have a clearly defined terminology before introducing any kind of management tool, especially regarding sustainability risks. The model is not operational at its current state, and the next step for Volvo Cars would be to investigate in further developments such as finding suitable datasets and introducing a weighting system. This would help with prioritisation, highlighting the most critical issues.