Redesigning global supply chains during compounding geopolitical disruptions: the role of supply chain logics

Abstract

PurposeWhy do managers redesign global supply chains in a particular manner when faced with compounding geopolitical disruptions? In answering this research question, this study identifies a constrained system of reasoning (decision-making logic) employed by managers when they redesign their supply chains in situations of heightened uncertainty.Design/methodology/approachThe authors conducted 40 elite interviews with senior supply chain executives in 28 companies across nine industries from November 2019 to June 2020, when the UK was preparing to leave the European Union, the US–China trade war was escalating, and Covid-19 was spreading rapidly around the globe.FindingsWhen redesigning global supply chains, the authors find that managerial decision-making logic is constrained by three distinct environmental ecosystem conditions: (1) the perceived intensity of institutional pressures; (2) the relative mobility of suppliers and supply chain assets; and (3) the perceived severity of the potential disruption risk. Intense government pressure and persistent geopolitical risk tend to impact firms in the same industry, resulting in similar approaches to decision-making regarding supply chain design. However, where suppliers are relatively immobile and supply chain assets are relatively fixed, a dominant logic is consistently present.Originality/valueBuilding on an institutional logics perspective, this study finds that managerial decision-making under heightened uncertainty is not solely guided by institutional pressures but also by perceptions of the severity of risk related to potential supply chain disruption and the immobility of supply chain assets. These findings support the theoretical development of a novel construct that the authors term ‘supply chain logics’. Finally, this study provides a decision-making framework for Senior Executives competing in an increasingly complex and unstable business environment.

From supply chain risk to system-wide disruptions: research opportunities in forecasting, risk management and product design

“…More research is required to focus on resilience against internal and external (e.g. cyber-attack) disturbances. Design and geographical span : Finally, geopolitical tensions not only exacerbate uncertainties but also directly impact supply chain design (Roscoe et al ., 2022; Sodhi and Tang, 2022)—e.g. cobalt mining or microchips could also be connected to DFA with alternative materials for such products as car batteries or electronic chips.…”

“…8. Design and geographical span: Finally, geopolitical tensions not only exacerbate uncertainties but also directly impact supply chain design (Roscoe et al, 2022;Sodhi and Tang, 2022)-e.g., cobalt mining or microchips could also be connected to DFA with alternative materials for such products as car batteries or electronic chips. We need to revisit supply chain network design in light of such tensions and uncertainty on the one hand and adaptability on the other.…”

Supply networks for extreme uncertainty: a resource orchestration perspective

“…Even if suppliers might be relatively immobile and supply chain assets relatively fixed, when the perceived intensity of institutional pressure and the perceived severity of the potential disruption risks are high, supply chain executives need to adopt a new logic in their design and management of the supply network (Roscoe et al ., 2022). Large firms might have to radically rethink their way of operating, building up ad-hoc project supply chains and embedding an entrepreneurial approach in their supply chain design and practices (Ketchen and Craighead, 2021).…”

Impact pathways: a home for insights from relevant and impactful operations and supply chain management research

“…The area of geopolitical risks upon supply chains is still under-developed and we seek pathways breaking new frontiers and boundaries on policy making and its links with and impact on supply chains (Moradlou et al ., 2021; Roscoe et al ., 2022). For instance, reshoring supply chains and rejuvenating post-industrial areas to create new capacity in the EU, to reduce the strategic dependence from oversea, is a new challenge that requires high consideration.…”