Configuring Supply Chain Dyads for Regulatory Disruptions: A Behavioral Study of Scenarios

Abstract

This study examines the use of scenario planning—a strategic planning tool used for making decisions of long‐term nature—to adapt a buyer–supplier dyad for disruptions in their supply chain resulting from abrupt changes in regulations. We posit that dyadic scenarios, that is, those created jointly by a buyer and a supplier, alter the scope of supply chain design in relation to a regulatory disruption. We offer four hypotheses distinguishing dyadic scenario creation from the traditional single‐firm scenario creation and two additional hypotheses related specifically to scenarios of regulatory disruptions. Five of the six hypotheses are supported in a behavioral study of a regulatory context. We integrate these findings to propose a Supply Chain Regulation Preparedness (SRP) framework for assessing the effects of dyadic scenario creation in six regimens of regulatory disruptions. We discuss the implications of this framework for the theory and practice of organizational learning associated with supply chain configurations in the face of emergent public policies and highlight collaborative scenario planning as an emergent strategic‐level mechanism that supply chain partners can deploy jointly to address just‐in‐case uncertainties.

Pouring cement down one of your oil wells: Relationship between the supply chain disruption orientation and performance

“…A supply chain disruption orientation adopted by a firm does not prevent a possible disruption beyond the direct supplier (Phadnis & Joglekar, 2021). Even though Volkswagen has addressed supply chain disruption orientation by diversifying its battery suppliers in China and Europe, the company has been forced to reduce the production of electric cars during the pandemic (Transport & Environment, 2020).…”

Interplay between Competing and Coexisting Policy Regimens within Supply Chain Configurations

“…Of particular concern to policy makers are implications on equity (Bertsimas et al., 2012 ) and shifts in the bargaining power of supply chain actors (Crook and Combs, 2007 ), which are particularly difficult to assess within a CACP context. Examples that typify underlying CACP tensions include: (i) the U.S. Federal Power Act that exposed tensions regarding participation in interstate electricity and natural gas markets, exemplified in the case of Texas (Klump, 2017 ); (ii) the Brexit Referendum outcome that resulted in contentious and intensive policy development over common jurisdictional areas, such as fishing rights, food standards, and N. Ireland cross‐border protocols, requiring extensive scenario planning on various supply network reconfiguration responses (Phadnis and Joglekar, 2021 ) to regulatory changes and new trade protocols; and (iii) the decriminalization of the personal use of marijuana for recreation purposes in several US states such as Washington and Colorado, as opposed to federal‐based legal prohibitions which also create financial ripple effects as marijuana businesses are not allowed to access many standard banking and financial services (Carnevale et al., 2017 ).…”

Blurred lines: the timeline of supply chain resilience strategies in the grocery industry in the time of Covid-19

“…They represented a quick response to lessen the impact of the disruption or to change its effect (Ali et al 2017 ). In many cases, companies do not need to rely on a background structure and can resort to them according to the principle of facing “Just in Case” uncertainties (Phadnis and Joglekar 2021 ). For example, some companies interpreted multiple sourcing as the activation of a supplier for the first time during the pandemic with the intention to stop the contract after the emergency.…”