Minimizing supply chain disruption risk through enhanced flexibility

Abstract

PurposeThe purpose of this paper is to examine the use of a strategic approach (contingency planning) to minimize risk exposure to a supply chain disruption. Specifically, the relationship between several attributes of a contingency planning process and flexibility are examined.Design/methodology/approachThis effort develops a model that will provide both researchers and practitioners a means of determining the attributes with the highest relationship to flexibility. The model is then tested using multiple regression techniques.FindingsBased on the sample used in this survey, top management support, resource alignment, information technology usage, and external collaboration provide the largest contributions to flexibility. Flexibility has been shown to enhance the ability to minimize risk exposure in the event of a supply chain disruption.Research limitations/implicationsIn this research effort, the multiple regression results produced an R2 of 0.45, indicating that additional variables of interest may need to be identified and investigated. Furthermore, a wider range of respondents could make the results more generalizable.Practical implicationsThis effort will help to allow managers at multiple levels to understand the primary planning attributes to use to increase flexibility.Originality/valueThe paper develops a model that can be used to identify the specific areas that can lead to improved flexibility. Based on the model, managers, and planners can develop appropriate strategies for minimizing risk exposure in the event of a supply chain disruption.

Supply chain disruption propagation: a systemic risk and normal accident theory perspective

“…This is emphasized by Basole and Bellamy (2014, page 777) who state "risks originating in seemingly unrelated and distant parts of the entire network can quickly propagate, disrupting and potentially crippling the entire network". Supply chains are highly interconnected (Skipper and Hanna 2009), and no single firm can see all the interconnections through which it can be affected. For example, the Appliances firm described a situation where their product used a specific color in their electronics that is also used in certain televisions, and when the television market demand increased, the specific supply required for their product was no longer available.…”

A control engineering approach to the assessment of supply chain resilience

“…Most existing studies have provided more qualitative insights to the problem and focus more on identifying sources of risks and on determining mitigation and contingency strategies. Quantitative researchers have focused on reducing the likelihood of the occurrence of disruptive events and/or developing means of overcoming disruptions if such events occur (Tomlin, 2006;Lodree Jr. and Taskin, 2007;Wilson, 2007;Tang and Tomlin, 2008;Mitra et al, 2009;Skipper and Hanna, 2009;Wagner and Neshat, 2010). They do not explicitly state that supply chain resilience is achieved or measured at any point in their work.…”

“…Tang and Tomlin (2008) and Skipper and Hanna (2009) Figure 1 summarises what has been found in the literature regarding sources of risk and strategies to anticipate, mitigate and overcome disruptions. Moreover, the figure also lists the criteria that were used to evaluate supply chain resilience and/or disruptions' likelihood and characteristics (these measures are listed followed by an asterisk).…”

Integration of ISO 31000:2009 and Supply Chain Risk Management

“…Risk treatments might include dual-sourcing [24], credit analysis [25], use of capable suppliers [19], building structural flexibility into supply chain designs [26], supply chain modeling [27], inventory buffers [23], trust development [27], or contingency planning [28,29], for example.…”