Supply Chain Tsunamis: Research on Low Probability High Impact Disruptions

Akkermans, Hans; Wassenhove, Luk N. Van

doi:10.2139/ssrn.3071668

Cited by 8 publications

(8 citation statements)

References 57 publications

(66 reference statements)

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“…Keil, Depledge and Rai (2007, p. 395) indicated that “cognitive biases are always present in decision making.” Biases are “decision rules, cognitive mechanisms, and subjective opinions people use to assist in making decisions” (Busenitz & Barney, 1997, p. 12). Even in situations when objective data are available, subjective interpretation may result in biased risk assessments (Ellis, Henry, & Shockley, 2010) demonstrating that managers may not act “as classical rational agents” (Akkermans & Van Wassenhove, 2018, p. 67). While there are numerous decision biases (see Carter et al, 2007 for a review), one, in particular, pertains to scarcity.…”

Section: Background and Hypotheses Developmentmentioning

confidence: 99%

Resource Scarcity Perceptions in Supply Chains: The Effect of Buyer Altruism on the Propensity for Collaboration

Wiedmer

Whipple

Griffis

et al. 2020

J Supply Chain Manag

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When faced with potential resource scarcities, purchasing managers have to make decisions regarding how to react to such scarcity threats. This can be challenging as there is often uncertainty surrounding the potential scarcity. Buyers’ mitigation decisions are impacted by their perceptions, which may lead to potentially ineffective mitigation responses. Resource dependence theory as well as supply chain literature emphasize the importance of collaborating with supply chain partners to secure access to scarce resources. However, behavioral research argues that the scarcity mindset causes individuals to behave more competitively, rather than collaboratively. This research examines the extent to which buyers’ perceptions of scarcity threats affect the decision to act altruistically towards the major supplier as well as to choose to collaborate with a major supplier in order to mitigate the scarcity. The research uses a scenario‐based role‐playing experiment with respondents serving as purchasing managers. The research demonstrates the complexity of resource scarcity management and illustrates that when faced with resource scarcity, buyers are actually less prone to collaborate with critical resource suppliers. This effect is robust, regardless of the level of relational capital present in the buyer–supplier relationship and regardless of individual factors, such as work experience and previous purchasing experience.

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Section: Background and Hypotheses Developmentmentioning

confidence: 99%

Resource Scarcity Perceptions in Supply Chains: The Effect of Buyer Altruism on the Propensity for Collaboration

Wiedmer

Whipple

Griffis

et al. 2020

J Supply Chain Manag

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“…Disruption risks (i.e. low-probability-high-impact risks, as opposed to the bullwhip effect) have attracted the attention of researchers in the last decade (Craighead et al 2007;Habermann, Blackhurst, and Metcalf 2015;Simchi-Levi et al 2015;Snyder et al 2016;Sokolov et al 2016;Sawik 2017;Akkermans and van Wassenhove 2018;Sawik 2019). Most of this research focused on low-probability-high-impact events such as natural and man-made catastrophes, strikes or political crises.…”

Section: Introductionmentioning

confidence: 99%

Does the ripple effect influence the bullwhip effect? An integrated analysis of structural and operational dynamics in the supply chain

Dolgui

Ivanov

Rozhkov³

2019

International Journal of Production Research

257

157

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The ripple effect refers to structural dynamics and describes a downstream propagation of the downscaling in demand fulfilment in the supply chain (SC) as a result of a severe disruption. The bullwhip effect refers to operational dynamics and amplifies in the upstream direction as ordering oscillations. Being interested in uncovering if the ripple effect can be a driver of the bullwhip effect, we performed a simulation-based study to investigate the interrelations of the structural and operational dynamics in the SC. The results advance our knowledge about both ripple and bullwhip effects and reveal, for the first time, that the ripple effect can be a bullwhip-effect driver, while the latter can be launched by a severe disruption even in the downstream direction. The findings show that the ripple effect influences the bullwhip effect through backlog accumulation over the disruption time as a consequence of non-coordinated ordering and production planning policies. To cope with this effect, a contingent production-inventory control policy is proposed that provides results in favour of information coordination in SC disruption management to mitigate both ripple and bullwhip effects. The SC managers need to take into account the risk of bullwhip effect during the capacity disruption and recovery periods.

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“…Behavioral economics approaches to decision-making under uncertainty indicate that COVID-19 is unique (grey swan) in comparison to natural calamities (e.g. Akkermans and Van Wassenhove, 2018;. Accordingly, general optimization techniques are bound to fail due to limited information about the pandemic and unpredictable change in purchasing behavior.…”

Section: Introductionmentioning

confidence: 99%

A collaborative approach to maintaining optimal inventory and mitigating stockout risks during a pandemic: capabilities for enabling health-care supply chain resilience

Friday

Savage

Melnyk

et al. 2021

JHLSCM

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PurposeInventory management systems in health-care supply chains (HCSC) have been pushed to breaking point by the COVID-19 pandemic. Unanticipated demand shocks due to stockpiling of medical supplies caused stockouts, and the stockouts triggered systematic supply chain (SC) disruptions inconceivable for risk managers working individually with limited information about the pandemic. The purpose of this paper is to respond to calls from the United Nations (UN) and World Health Organization (WHO) for coordinated global action by proposing a research agenda based on a review of current knowledge and knowledge gaps on the role of collaboration in HCSCs in maintaining optimal stock levels and reinforcing resilience against stockout disruptions during pandemics.Design/methodology/approachA systematic review was conducted, and a total of 752 articles were analyzed.FindingsCollaborative planning, forecasting and replenishment practices are under-researched in the HCSC literature. Similarly, a fragmented application of extant SC collaborative risk management capabilities undermines efforts to enhance resilience against systematic disruptions from medical stockouts. The paucity of HCSC articles in humanitarian logistics and SC journals indicates a need for more research interlinking two interdependent yet critical fields in responding to pandemics.Research limitations/implicationsAlthough based on an exhaustive search of academic articles addressing HCSCs, there is a possibility of having overlooked other studies due to search variations in language controls, differences in publication cycle time and database search engines.Originality/valueThe paper relies on COVID-19's uniqueness to highlight the limitations in optimization and individualistic approaches to managing medical inventory and stockout risks in HCSCs. The paper proposes a shift from a fragmented to holistic application of relevant collaboration practices and capabilities to enhance the resilience of HCSCs against stockout ripple effects during future pandemics. The study propositions and suggestion for an SC learning curve provide an interdisciplinary research agenda to trigger early preparation of a coordinated HCSC and humanitarian logistics response to future pandemics.

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Supply Chain Tsunamis: Research on Low Probability High Impact Disruptions

Cited by 8 publications

References 57 publications

Resource Scarcity Perceptions in Supply Chains: The Effect of Buyer Altruism on the Propensity for Collaboration

Resource Scarcity Perceptions in Supply Chains: The Effect of Buyer Altruism on the Propensity for Collaboration

Does the ripple effect influence the bullwhip effect? An integrated analysis of structural and operational dynamics in the supply chain

A collaborative approach to maintaining optimal inventory and mitigating stockout risks during a pandemic: capabilities for enabling health-care supply chain resilience

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