Keep Your Friends Close? Supply Chain Design and Disruption Risk

The effects of tie strength and data integration with supply base on supply disruption ambiguity and its impact on inventory turnover

Purpose

In this paper, the authors introduce supply disruption ambiguity as the inability of a sourcing firm to attach probability point estimates to the occurrence of and to the magnitude of loss from supply disruptions. The authors drew on the “ambiguity in decision-making” literature to define this concept formally, connected it to relevant supply disruption information deficit, positioned it relative to supply chain risk assessment and hypothesized and tested its negative associations with both supply base ties and inventory turnover.

Design/methodology/approach

The authors analysed survey data from 171 North American manufacturers and archival data for a subset (88 publicly listed) of these manufacturers via Ordinary Least Squares (OLS) estimation after ensuring that methodological concerns with survey research have been addressed. They used appropriate controls and employed the heteroskedasticity-based instrumental variable (HBIV) approach to ensure that inferences from our results are not unduly influenced by endogeneity.

Findings

Strong supply base ties decrease supply disruption ambiguity, which, in turn, increases inventory turnover. Moreover, strong supply base ties and data integration with the supply base have indirect and positive effects on inventory turnover. As sourcing firms strengthen ties and integrate data exchange with their supply base, their inventory turnover improves from access to information relevant to detect and diagnose supply disruptions effectively.

Originality/value

Research on supply disruption management has paid more attention to the “disruption recovery” stage than to the “disruption discovery” stage. In this paper, the authors add novel insights regarding the recognition and diagnosis aspects of the “disruption discovery” stage. These novel insights reveal how and why sourcing firms reduce their overall ambiguity associated with detecting and assessing losses from supply disruptions through establishing strong ties with their supply base and how and why reducing such ambiguity improves inventory turnover performance.

Assessing risk of supply chain disruption due to COVID-19 with fuzzy VIKORSort

The rapid spread of the COVID-19 pandemic has disrupted many economic activities around the world. The complete and partial lockdown policies, as well as the closure of borders by many countries has halted trade, consequently disrupting domestic and international supply chain networks. Like many other countries, various economic sectors in Pakistan also bore high economic losses due to these disruptions. Multiple studies have analyzed on the impact of the COVID-19 pandemic on different economic sectors in Pakistan, i.e. construction, accommodation and food, manufacturing, wholesale and retail goods, energy, and the information and communication sectors. However, no study has examined sorting these economic sectors based on supply chain disruptions due to the pandemic. Therefore, this study aims to observe the resilience of these economic sectors and perform sorting using three predefined classes, i.e. severe, moderate, and low disruptions. For this purpose, we propose using the novel methodology fuzzy VIKORSort, which is the major contribution of this paper. This methodology evaluates the aforementioned economic sectors based on 10 criteria. The results of the study revealed that the accommodation and food sector, along with the construction sector, experienced the most severe disruption, followed by manufacturing, wholesale and retail goods, and energy, with moderate disruption, whereas the information and communication sector bore the least disruption. The proposed methodology will help the researchers and authorities deal with sorting and decision problems to prioritize the preventive measures of such undesirable events.

The impact of operational disruptions on performance in surgical settings: moderating roles of risk management infrastructure and information exchange

Purpose

Drawing on normal accident and high-reliability organizational theories, this study examines the impact of magnitude and likelihood of disruptions on surgical procedure performance. More importantly, the authors investigate the moderating role played by information exchange and risk management infrastructure in mitigating the negative effect of disruption on performance.

Design/methodology/approach

A nationwide multi-respondent survey was administered to operating room personnel to collect information on their experiences with disruptions experienced in surgeries. The survey data are analyzed to examine the relationship between operational disruptions and procedure performance. Additionally, the moderating roles of risk management infrastructure and information exchange on the relationship between disruptions and performance are investigated. The results obtained from the empirical analysis are validated using data from an ethnographic investigation of surgeries at a major hospital.

Findings

The results show that both the magnitude and the likelihood of a disruption adversely impact procedure performance. Interestingly, the authors find that risk management infrastructure and information exchange play different roles in mitigating the effect of disruptions on performance. The authors find that while risk management infrastructure helps mitigate the effect of magnitude of service disruptions, information exchange helps reduce the effects of likelihood of disruptions. The findings lend strong support to the theoretical assertions. By means of the participant–observer data collected from over 100 surgeries as part of the ethnographic investigation, the authors validate the key findings. The findings suggest that disruptions are common occurrences in surgical settings, but their performance impact may be lessened or altogether avoided with the proper information and risk management mechanisms in place.

Originality/value

This survey research extends the understanding of risk management by considering a context that is highly prone to disruptions. The authors adopt existing constructs pertaining to supply chain disruptions within this context and find new insights. The findings of the study show differential roles played by information exchange and risk management infrastructure in mitigating disruptions. This nuanced understanding provides directions for aligning efforts towards risk mitigation in surgical settings in a more focused way. This study supplements findings from survey data analysis with an examination of data collected by means of ethnographic investigation.

An Evaluation of Critical Capabilities and Improvement Areas for Competitive Manufacturing in a Developed-Country Environment

This research evaluates the critical capabilities and improvement areas for competitive manufacturing in a developed-country environment. A multiple-case-study approach is applied, consisting of three manufacturing firms located in Sweden. The case study combines both quantitative and qualitative evaluations of the critical capabilities found in the extant literature. The research reveals fifteen critical capabilities and sixteen improvement areas for competitive manufacturing in a developed-country environment. The results show that the firms develop capabilities in a cumulative manner, starting with cost and quality, continuing with time and flexibility, and finally trying to improve innovation and sustainability. To develop competitive manufacturing operations in developed counties, it is therefore vital to improve capabilities related to time, flexibility, innovation, or sustainability. Irrespective of the targeted capabilities, they must contribute to cost-efficient operations and high quality must always be maintained. The efforts to develop capabilities related to innovation and sustainability may be expensive in the short term, however they can provide better cumulative results and competitiveness in the long term.

Insights from systematic literature review of supply chain resilience and disruption

Purpose

The study of supply chain disruption (SCD) and supply chain resilience (SCR) remains to be studied deeply in the field of business management. The purpose of this paper is to showcase a framework of SCR strategies to reduce the adverse effects of SCD using systematic literature review and data visualization.

Design/methodology/approach

Using a systematic literature review approach, the paper explores the concepts of supply chain disruption and supply chain resilience. Through rigorous systematic screening, authors studied papers on both the concepts and have proposed a framework for the same. The authors also have used data visualization and network diagram approaches for better understanding of the topic.

Findings

The systematic literature review of both the concepts brings out some exciting results which give a new direction to supply chain field. The outcome of this research also outlines numerous future research direction, which will be useful for the research community.

Practical implications

The numerous strategies of SCR should be implemented by manufacturing as well as a service organization. The framework reported in this research help academician and practitioners to understand SCR and to easily overcome any level of disruption. Supply chain managers must also formulate strategies accordingly and make plans to continually expand the system.

Originality/value

This research is the first such attempt to showcase a formal systematic framework and co-occurrence networks as well as overlay networks of SCR and SCD.

COVID-19 operational disruption and SMEs' performance: the moderating role of disruption orientation and government support

Purpose

Despite the growing unforeseen and catastrophic events that disrupt business operations, empirical studies on the impact of operational disruption (OD) on small and medium enterprises' (SMEs) performance dimensions are limited. The study aims to investigate the moderating effect of disruption orientation (DO) and government support (GS) on the relationship between coronavirus disease (COVID-19) OD and SMEs' performance.

Design/methodology/approach

Quantitative survey method was used to collect data from 170 SMEs in Nigeria, through hand-delivery questionnaires. Partial least square (PLS) structural equation modeling (SEM) was employed to analyze the data.

Findings

The result shows no significant relationship between COVID-19 OD, DO and GS with SMEs' financial performance (FP). However, the relationship between COVID-19 OD and non-financial performance (NFP) is negatively significant. The relationship between DO and NFP is positively significant. DO and GS have insignificant relationship with FP. Finally, DO and GS does not moderate any of the relationships between COVID-19 OD and the dimensions of SMEs' performance.

Practical implications

The result implies that health-related disruptions such as COVID-19 affect only the NFP of SMEs. However, supply chain managers and SMEs are encouraged to adopt DO to enhance NFP of firms.

Originality/value

The current study is the first to evaluate the impact of health-related disruptions on the two major dimensions of SMEs' performance (FP and NFP) by incorporating the moderating role of internal (DO) and external (GS) factors in to a single framework. However, the paper revealed new theoretical and practical knowledge by illuminating the absence of significant relationship between COVID-19 OD and SMEs' FP, implying that COVID-19 disruption does not significantly affect SMEs' FP.

An attention-based view of supply disruption risk management: balancing biased attentional processing for improved resilience in the COVID-19 context

Purpose

In the context of the COVID-19 pandemic, this study investigates a variety of approaches to supply disruption risk management for achieving effective responses for resilience at the supply management subunit level (e.g. category of items). Drawing on the attention-based view of the firm, the authors model the attentional antecedents of supply resilience as (1) attentional perspectives and (2) attentional selection. Attentional perspectives focus on either supply risk sources or supply network recoverability, and both are hypothesised to have a direct positive association with supply resilience. Attentional selection is top down or bottom up when it comes to disruption detection, and these are hypothesised to moderate the association between disruption risk management perspectives and resilience.

Design/methodology/approach

Conducted at the early phases of the COVID-19 pandemic, this study employs a hierarchical regression analysis on a multicountry survey of 190 procurement professionals, each responding from the perspective of their own subunit area of supply responsibility.

Findings

Both attentional disruption risk management perspectives are needed to achieve supply resilience, and neither is superior in terms of achieving supply resilience. Both the efficiency of the top down and exposure to the unexpected with the bottom up are needed – to a balanced degree – for improved supply resilience.

Practical implications

The results encourage firms to purposefully develop their supply risk management practices, first, to include both perspectives and, second, to avoid biases in attentional selection for disruption detection. Ensuring a more balanced approach may allow firms to improve their supply resilience.

Originality/value

The results contribute to the understanding of the microfoundations that underpin firms' operational capabilities for supply risk and disruption management and possible attentional biases.

Strategic supplier relationships and supply chain resilience: Is digital transformation that precludes trust beneficial?

Purpose

The purpose of this study is to investigate the role that communication, trust and digital transformation can play in the relationship between joint problem-solving and supply chain resilience. More specifically, the authors try to examine the possibility of digital transformation as a replacement for trust within a joint problem-solving context.

Design/methodology/approach

A survey instrument was developed and administrated to manufacturing firms within the United Kingdom and the United States. Based on data collected from 291 senior managers, multiple linear regressions were conducted through a customized process model to test the proposed hypotheses.

Findings

The results point to the actual impact of digital transformation being far more complicated than the initial benefits that it appears to bring within a supply chain. Thus, technology is only effective when applied within the right context. The authors showcase that the trio of digital transformation, trust and joint problem-solving can be highly valuable to establish supply chain resilience and that further investigation on the interrelationships between these concepts is warranted.

Practical implications

Manufacturing firms that aim to adopt new technologies should not consider advanced digital technologies as an alternative to trust. While digital transformation can improve resource sharing and integration, governance mechanisms–such as trust–will remain the cornerstones of strategic supplier relationships. Therefore, supply chain partners must strive to achieve a balance between trust and the right type of digital technology.

Originality/value

This study contributes to the growing literature focusing on the role that digital transformation can play in developing supply chain capabilities. It adds an early empirical insight on the role of technology and governance in joint problem-solving and supply chain resilience.

Introducing Risk Considerations into the Supply Chain Network Design

Supply chains (SC) aim to provide products to the final customer at a certain service level. However, unforeseen events occur that impede supply chain objectives. SC Risk has been studied in the literature, providing frameworks and methodologies to manage SC failures. Nevertheless, more efforts are needed to prevent hazardous and disruptive risks and their consequences. These risks must be considered during the process of designing a supply chain. Some methodological contributions concerning risk in the supply chain network design (SCND) are conceptual frameworks for mitigating SC disruptions, which suggest strategies and measures for designing robust and resilient SCs. Although such contributions are valuable, they do not indicate how to cope with risk when designing a SC. The main objective of this research is to describe a methodology aimed at including risk considerations into the SCND. Our proposal aims to be, on the one hand, a comprehensive approach that includes a risk identification and assessment procedure in each of the stages of the SCND process and, on the other hand, a tool for decision-making in SC design or redesign processes when SC risks need to be considered. The methodology proposed is an extension of a SCND methodology including risk considerations in order to improve the performance of the supply chains. A case study illustrates how the proposed methodological works, achieving the identification of SC risks already observed in previous works.

A Review of the Existing and Emerging Topics in the Supply Chain Risk Management Literature

This review examines supply chain risk publications across nine prestigious management, operations, and supply chain journals with respect to exploring trends and emerging topics. Using a refined set of keywords, we extract and filter the most relevant supply chain risk management (SCRM) articles from Scopus between 2001 and 2019. Unlike previous reviews of the SCRM literature, our methodology utilizes both bibliometric and cocitation analyses of publications in selective management and operations and supply chain management journals. In addition to analyzing the current state of the SCRM literature via bibliometric analysis, we delve deeply into the clusters of literature informing SCRM studies through a cocitation analysis. By conducting a text analysis on these clusters, we identify the main themes and provide insights regarding article relevance, theoretical frameworks, and methodologies for each cluster. In addition, we categorize the themes within each cluster into three main groups of matured, developing, and emerging. Based on the identified categories, we provide detailed discussions on the promising avenues for research and practice in three main areas of sustainable SCRM, behavioral SCRM, and nascent methodologies and theories in SCRM studies. Finally, we dedicate a section in our review to discussing the direction of SCRM research during and after the coronavirus disease 2019 era.

Risk management integration and supply chain performance in ISO 9001-certified and non-certified firms

Purpose

The purpose of this paper is to explore the mediating effect of supply chain risk management integration (RMI) on the relationship between supply chain logistics performance (LP) and supply chain cost performance (CP), as well as on the relationship between LP and supply chain service performance (SP). The impact of CP and SP on overall firm performance (FP) is also explored. ISO 9001-certified firms and non-certified firms are assessed to determine whether superior risk-based thinking, as required in the latest ISO 9001 standard, has a positive impact on the different relationships.

Design/methodology/approach

A theoretical model is developed and tested based on the participation of 140 supply chain managers. The proposed structural equation model positively relates LP, RMI, CP and SP. RMI is positively linked to CP and SP, while CP and SP are positively related to overall FP. Two subsamples (a group of 63 ISO 9001-certified firms and a group of 77 non-certified firms) are used to evaluate the model.

Findings

For certified and non-certified firms, LP is positively related to RMI, CP and SP, and SP and CP are positively related to FP. However, for certified firms, RMI partially mediates the relationship of LP with both CP and SP, while for non-certified firms, RMI does not mediate these relationships. The findings suggest that ISO 9001-certified firms are able to leverage RMI efforts to impact positively on supply chain performance, whereas non-certified firms are not.

Research limitations/implications

The study findings are based on the perceptions of managers. Even though the majority of the 63 certified firms included in this study were ISO 9001:2015 certified, the model results do not differentiate between companies certified to the 2008 version of the standard and the 2015 version (which specifically requires demonstration of risk-based thinking).

Practical implications

This study suggests that ISO 9001 provides a framework for risk management processes and collaboration with supply chain partners to positively impact the relationship of LP with cost and SP.

Originality/value

This is one of the first studies to characterize the benefits of using a structured approach for risk-based thinking that is associated with ISO 9001.

Identification and prioritization of factors influencing organization risk tolerance level

Purpose

Identifying and prioritizing the risks are considered as critical issues in risk management; otherwise, non-considering the risks will lead to the problems such as delays in project implementation, increased costs, loss of reputation, loss of clients, reduced revenue and liquidity and even bankruptcy. The paper aims to discuss these issues.

Design/methodology/approach

In this paper, the factors influencing the organization risk tolerance level were identified. Then, the factors increasing and decreasing the risk tolerance level were determined by a decision-making model. Finally, a comprehensive model was considered for risk measuring and preparing a risk failure structure chart, in order to determine the factors influencing it as well as the measurement criteria and then they were ranked using the taxonomy method. In this study, the size of the statistical population was 130 (six small and medium manufacturer and service provider companies). Based on Cochran’s sample size formula, 97 questionnaires containing 30 questions were randomly distributed among the population. Validity and reliability of the questionnaire were confirmed. The data were analyzed by SPSS 22.

Findings

Given the hypotheses of this study, the first hypothesis was rejected and the other hypotheses were accepted. The final ranking was done using the taxonomy method; the personality of the project manager was ranked at first; income, credit and capital were ranked second and the number of personnel was ranked third. Moreover, the TOPSIS method was used for ranking to compare the results.

Originality/value

In this research, the identification and ranking of these factors have taken place in several small- and medium-sized organizations; in addition, the rankings are conducted using the taxonomy decision-making method.