The Severity of Supply Chain Disruptions: Design Characteristics and Mitigation Capabilities

Abstract

Supply chain disruptions and the associated operational and financial risks represent the most pressing concern facing firms that compete in today's global marketplace. Extant research has not only confirmed the costly nature of supply chain disruptions but has also contributed relevant insights on such related issues as supply chain risks, vulnerability, resilience, and continuity. In this conceptual note, we focus on a relatively unexplored issue, asking and answering the question of how and why one supply chain disruption would be more severe than another. In doing so, we argue, de facto, that supply chain disruptions are unavoidable and, as a consequence, that all supply chains are inherently risky. Employing a multiple-method, multiple-source empirical research design, we derive novel insights, presented as six propositions that relate the severity of supply chain disruptions (i) to the three supply chain design characteristics of density, complexity, and node criticality and (ii) to the two supply chain mitigation capabilities of recovery and warning. These findings not only augment existing knowledge related to supply chain risk, vulnerability, resilience, and business continuity planning but also call into question the wisdom of pursuing such practices as supply base reduction, global sourcing, and sourcing from supply clusters. † Corresponding author. 132 Severity of Supply Chain Disruptions

Buyer perceptions of supply disruption risk: A behavioral view and empirical assessment

“…For example, Sheffi and Rice (2005) consider several external hazards such as strikes (e.g., US West Coast longshoremen strike), natural disasters, outbreak of disease, and terrorist attacks in their discussion of risk assessment and mitigation. Other research highlights the role of density of the supply network (Craighead et al, 2007), complexity of the supply network (Choi and Krause, 2006), supplier performance (Spekman and Davis, 2004), supplier shutdowns due to strikes, fires, financial distress, or sabotage (Sheffi and Rice, 2005), and shipping distance. Further, factors related to supply network complexity, such as geopolitical, natural, or socio-cultural factors may also contribute to supply disruption risk (e.g., Juttner, 2005).…”

“…Finally, we note that our definition does not incorporate specific forms of loss, like financial, psychological, performance, physical, or social loss (Kaplan et al, 1974) or causes of loss, such as losses due to strikes, fires, natural disasters, or poor performance (Treleven and Schweikhart, 1988). Loss occurs when the target reference (i.e., expectation that supply occurs without failure) is not met; thus, our definition of overall supply disruption risk subsumes the different forms of loss attributable to unforeseen events that interfere with the normal flow of materials and/or goods (Craighead et al, 2007).…”

State-of-the-Art Review on Operational Resilience: Concept, Scope and Gaps

“…Different literature in resilience discuss about resisting influence of (for example disruptive) changes ( [13]) and coping mechanisms or mitigations ( [20]). Building proper capabilities inherently or acquiring them from somewhere depending on vulnerability levels is essential for both of these.…”

“…Building proper capabilities inherently or acquiring them from somewhere depending on vulnerability levels is essential for both of these. [20] X X X X X BC, SC 2007 McManus et al [8] X X X X X X SO 2007 Waters [10] X X X X X SC 2010 Melnyk et al [24] X X X X X X SC 2010 Colicchia et al [25] X X X X SC 2010 Pettit et al [26] X X X X X BC, SC Sustain. The essence of adapting/reconfiguring is sustaining the meeting of business objectives (i.e.…”

Coping with uncertainties via resilient supply chain framework

“…The global supply executives have accomplished several supply chain proposals to enhance profits (e.g., increased product variety, frequent launch of new products) and cut costs (e.g., single sourcing, outsourcing, just-in-time inventory system, vendor-managed inventory (Zsidisin and Smith, 2005;Wagner and Bode, 2006;Tang, 2006;Craighead et al, 2007). Such measures have capability to build lean and efficient supply chains in a stable environment, but these measures make supply chains more prone to disruptions (Hauser, 2003).…”