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

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.     

The disruption of the international supply chain: Firm resilience and knowledge preparedness to tackle the COVID-19 outbreak

The lockdowns of several countries due to COVID-19 outbreak resulted in severe economic consequences, among which was the immediate general disruption of the international supply chain, with few exceptions. This article aims to investigate whether some supply chains were resilient or not and why, using a knowledge-based approach and specifically focusing on the role played by supply chain innovation in building resilience to disruptions, thanks to knowledge preparedness. The study is motivated by two main rationales: the unique situation of a global pandemic and the absence of studies providing grounded evidences of supply chain resilience in a worst-case scenario.The research is based on the assumption that knowledge preparedness introduces logistics/supply chain innovations and enables companies to prevent, detect, and respond to unpredictable negative events.By using a large-scale sample of European firms' data from the Eurostat and a multivariate regression analysis, the authors cross-study the effects of supply chain knowledge preparedness – based on innovation type and expenditures – on the international trade of goods from January to June 2020. The results confirm that the most resilient supply chains were those that had previously introduced innovations, a factor that strengthens the knowledge preparedness of firms when faced with unforeseeable supply chain disruptions.     

Scrutinising the interplay between governance and resilience in supply chain management: A systems thinking framework

Supply chain disruptions recurrently challenge end-to-end operations owing to the ambiguous understanding of the role of governance in impacting supply network resilience. This paper scrutinises the relevant literature to understand the plethora of interpretations in supply chain governance and resilience while further providing a new perspective on the representation of the interplay between governance and resilience in supply chains. In this regard, the Systems Thinking lens is adopted to pull together the typologies and constructs of supply chain governance and resilience from the literature. Methodologically, System Dynamics modelling principles are leveraged to capture the underpinning structural interdependencies in a causal loop diagram. The study reveals that endogenous and exogenous supply chain governance processes and mechanisms support the intrinsic and extrinsic resilience in networks. Overall, this research contributes to the supply chain risk management domain by synthesising the interplay between governance and resilience, identifying pertinent typologies, and articulating research propositions that can inform decision-making at policy and management levels.     

An interdependent layered network model for a resilient supply chain

This paper addresses the problem of designing supply chains that are resilient to natural or human-induced extreme events. It focuses on the development of efficient restoration strategies that aid the supply chain in recovering from a disruption, thereby limiting the impact on its customers. The proposed restoration model takes into account possible disruptions to infrastructures, e.g., transportation and communications, by explicitly formulating their logical relationships with supply chains. A problem solving process is proposed that provides for cooperation between the managers of the infrastructures and the managers of the supply chains disrupted by an extreme event. Both the model and the problem solving process are exercised with a realistic industry problem.     

Disruptions in tightly coupled supply chain networks: the case of the US offshore oil industry

Managers have paid increasing attention to the exposure of their supply chains to disruptions and seek ways to mitigate supply chain vulnerability. The interconnectedness of tightly coupled supply chain networks makes this a challenging task, because interconnectedness and tight coupling of nodes in the network lead to an amplification of the actual risk exposure. This phenomenon can be attributed to the propagation of losses through the network, which exhibits certain dynamics. In order to investigate this mechanism, we studied the complex supply chain network of the oil industry in the Gulf of Mexico. Our results provide an estimate of the economic impact of eventual random and hurricane-related disruptions and can be used as a decision support tool for risk management of supply disruptions in interconnected supply chain networks.     

Strategic and operational management of organizational resilience: Current state of research and future directions

This article uses both a systematic literature search and co-citation analysis to investigate the specific research domains of organizational resilience and its strategic and operational management to understand the current state of development and future research directions.The research stream on the organizational and operational management of resilience is distant from its infancy, but it can still be considered to be in a developing phase. We found evidence that the academic literature has reached a shared consensus on the definition of resilience, foundations, and characteristics and that in recent years, the main subfield of research has been supply chain resilience. Nevertheless, the literature is still far from reaching consensus on the implementation of resilience, i.e., how to reach operational resilience and how to create and maintain resilient processes. Finally, based on the results of in-depth co-citation and literature analysis, we found seven fruitful future research directions on strategic, organizational and operational resilience.     

Responsive contingency planning in supply risk management by considering congestion effects

Contingency rerouting is known as a cost-effective risk management strategy for major disruptions such as earthquakes and natural disasters. The objective of this paper is to develop a decision-making tool to determine the appropriate response speed of a volume-flexible backup supplier to improve the supply chain responsiveness. We propose a mixed integer programming (MIP)-based capacity planning tool which generates the contingency plan of the supply chain subject to random disruptions. In order to make an accurate decision, the impact of critical operational characteristics such as response time and congestion are considered in a disruption scenario. The appropriate response speed is selected through a decision tree analysis by minimizing the expected supply chain costs. The selection is made with respect to three different attitudes of the decision maker towards risk. In order to evaluate the impact of the different failure and recovery probabilities over the selection process, a sensitivity analysis is presented. The results show that considering congestion is especially critical for risk-neutral decision makers in mitigating against disruptions.     

Managing Disruption Risks in Supply Chains

There are two broad categories of risk affecting supply chain design and management: (1) risks arising from the problems of coordinating supply and demand, and (2) risks arising from disruptions to normal activities. This paper is concerned with the second category of risks, which may arise from natural disasters, from strikes and economic disruptions, and from acts of purposeful agents, including terrorists. The paper provides a conceptual framework that reflects the joint activities of risk assessment and risk mitigation that are fundamental to disruption risk management in supply chains. We then consider empirical results from a rich data set covering the period 1995–2000 on accidents in the U. S. Chemical Industry. Based on these results and other literature, we discuss the implications for the design of management systems intended to cope with supply chain disruption risks.     

供应链韧性：适应复杂性——基于复杂系统管理视角

构建富有韧性的供应链已从企业层面关注的问题上升到行业、地区和国家层面战略，成为应对当前社会经济发展复杂局面和提升国家安全与竞争力水平的重要举措。本文在阐述了供应链是一个社会型多中心共享共治的复杂适应性系统基础上，指出供应链韧性是供应链系统行为与功能整体适应环境复杂性变动的一种能力标志；供应链韧性的复杂整体性属性特征需要通过复杂系统思维范式转移形成新的研究范式与方法论；供应链韧性理论的学术价值主要不是针对常规问题，而要看它应对供应链失稳、风险、应急、功能退化等韧性危机是否有效和效能如何；供应链韧性有着具体特定的真实世界；解释、分析和揭示供应链韧性复杂现象和客观规律需要充分关注供应链的独特性与话语语境，没有两个现实的供应链韧性机理是完全一样的；供应链韧性是当今供应链研究领域中的一个大问题、难问题，具有重要的学术前沿性、现实性与挑战性，应扎根在我国供应链管理的丰富实践土壤中，从基础性的学术体系、理论体系与话语体系夯实研究基础，而不宜过于被供应链韧性初始定义中的“断”与“不断”捆住手脚。     

Integrating performance and risk aspects of supply chain design processes

Abstract

Supply chain design is a complex and relatively poorly structured process, involving choosing many decisional parameters and it usually requires consideration of numerous sources of uncertainty. Many conventional processes of supply chain design involve taking a deterministic approach, using point estimates, on important measures of supply chain effectiveness such as cost, quality, delivery reliability and service levels. Supply chain disruptions are often separately considered as risks, both in the research literature and in practice, meaning that a purely traditional risk management and risk minimization approach is taken. We have developed and applied an approach that combines the intellect and experience of the supply chain designer with the power of evaluation provided by a Monte Carlo simulation model, which uses decision analysis techniques to explicitly incorporate the full spectrum of uncertain quantities across the set of alternative supply chain designs being considered. After defining and setting out the general decision variables and uncertainty factors for 16 distinct supply chain design decision categories, we then apply that approach to combine the decision-makers’ heuristics with the probabilistic modeling approach, iteratively, to achieve the best of both elements of such an approach. This novel approach to fully integrating performance and risk elements of supply chain designs is then illustrated with a case study. Finally, we call for further developmental research and field work to refine this approach.     

需求和零售商购买成本同时扰动的供应链应急协调

供应链的契约协调机制是供应链管理的重要内容,突发事件下的供应链协调机制是近年来的研究热点。 研究了在单制造商单零售商组成的供应链中,假设生产成本是其生产数量的凸函数下,当市场需求为零售价格的非线性函数,突发事件造成需求和零售商购买成本同时发生扰动时,集权、分权供应链应对突发事件的最优策略。 首先证明了稳定环境下的数量折扣契约可以实现该供应链的协调,在集权式决策下,供应链的原有生产计划对突发事件具有一定的鲁棒性,但是当突发事件造成的扰动超过一定幅度时,供应链的协调将会被打破,供应链系统必须改变生产计划才能实现其利润最大化。 在分权式决策下,供应链的原数量折扣契约不能使扰动后的供应链达到协调,因此,设计了新的数量折扣契约来使扰动后的供应链达到协调。最后给出一个算例验证了相关结论。     

供应中断风险下OEM供应链弹性运作与提升策略

供应中断是OEM供应链中企业面临的主要风险。本文基于供应链弹性分析的角度，将OEM供应链弹性运作问题描述为多变量耦合控制模型，构建了可变结构的弹性控制系统，研究了在供应中断风险冲击下OEM供应链弹性交互影响机制。在此基础上，提出了一种有针对性的提升供应链弹性的深度学习机制，此算法比传统的BP神经网络更加能够提高供应链绩效，并结合案例进行验证。研究结果表明：当供应中断发生时，深度学习算法可有效提升OEM供应链弹性，最大程度减轻企业损失。     

Stochastic Measures of Network Resilience: Applications to Waterway Commodity Flows

Given the ubiquitous nature of infrastructure networks in today's society, there is a global need to understand, quantify, and plan for the resilience of these networks to disruptions. This work defines network resilience along dimensions of reliability, vulnerability, survivability, and recoverability, and quantifies network resilience as a function of component and network performance. The treatment of vulnerability and recoverability as random variables leads to stochastic measures of resilience, including time to total system restoration, time to full system service resilience, and time to a specific α% resilience. Ultimately, a means to optimize network resilience strategies is discussed, primarily through an adaption of the Copeland Score for nonparametric stochastic ranking. The measures of resilience and optimization techniques are applied to inland waterway networks, an important mode in the larger multimodal transportation network upon which we rely for the flow of commodities. We provide a case study analyzing and planning for the resilience of commodity flows along the Mississippi River Navigation System to illustrate the usefulness of the proposed metrics.     

Traceability and Risk Analysis Strategies for Addressing Counterfeit Electronics in Supply Chains for Complex Systems

Within the microelectronics industry, there is a growing concern regarding the introduction of counterfeit electronic parts into the supply chain. Even though this problem is widespread, there have been limited attempts to implement risk‐based approaches for testing and supply chain management. Supply chain risk management tends to focus on the highly visible disruptions of the supply chain instead of the covert entrance of counterfeits; thus counterfeit risk is difficult to mitigate. This article provides an overview of the complexities of the electronics supply chain, and highlights some gaps in risk assessment practices. In particular, this article calls for enhanced traceability capabilities to track and trace parts at risk through various stages of the supply chain. Placing the focus on risk‐informed decision making through the following strategies is needed, including prioritization of high‐risk parts, moving beyond certificates of conformance, incentivizing best supply chain management practices, adoption of industry standards, and design and management for supply chain resilience.     

Taxonomy of ERP integrations and performance outcomes: an exploratory study of manufacturing firms

Building and deploying network capabilities of firms are crucial for sustaining competitive advantage. Enterprise resource planning (ERP) systems are useful to enhance such network capabilities thorough effective information flows. Their intended goals are measured in terms of production costs, operational flexibility and supply chain performance outcomes. However, the impact of ERP system implementation on firm performance has been reported as somewhat inconclusive. This study contends that a missing link in the story is the scope and extent of ERP system implementation after investigating how the extent of ERP integration is associated with the performance outcomes of manufacturing firms. The study also posits that restructuring in the organisation and supply chains are positively associated with manufacturing performance. Since ERP often entails restructuring in an organisation and supply chains, it is anticipated that restructuring plays an important role in inducing positive impact of ERP implementation to the firm. Using a global sample of 641 manufacturers, this research identifies four distinct ERP systems integration patterns, epitomised by different extents and directions of integration, and finds a significant association among the broadest degree of ERP systems integration, restructuring and plant performance improvement. The empirical results also show that restructuring takes place most actively in a firm that implement ERP with widest scope and scale.     

Centralization versus decentralization: Risk pooling,risk diversification,and supply chain disruptions

We investigate optimal system design in a multi-location system in which supply is subject to disruptions. We examine the expected costs and cost variances of the system in both a centralized and a decentralized inventory system. We show that, when demand is deterministic and supply may be disrupted, using a decentralized inventory design reduces cost variance through the risk diversification effect, and therefore a decentralized inventory system is optimal. This is in contrast to the classical result that when supply is deterministic and demand is stochastic, centralization is optimal due to the risk-pooling effect. When both supply may be disrupted and demand is stochastic, we demonstrate that a risk-averse firm should typically choose a decentralized inventory system design.     

Leveraging Supply Chain Integration through Planning Comprehensiveness: An Organizational Information Processing Theory Perspective

This study extends prior research on supply chain planning and integration by examining the underlying capabilities by which firms exploit the information they gain from integration activities. We use organizational information processing theory (OIPT) to develop hypotheses that identify the comprehensiveness of an organization's supply chain planning capabilities as an important mediator in the relationship between its supply chain integration activities and its operational performance. Further, our interpretation of OIPT suggests that an organization's usage of technology‐enabled supply chain management systems (SCMS) moderates these effects. Using survey data from 445 global firms, we estimate the corresponding moderated‐mediation structural model. The results indicate that usage of SCMS enables organizations to better utilize the information they gain from external integration efforts (relationships with customers and suppliers), thus improving the comprehensiveness of their supply chain planning capabilities. In contrast, the use of SCMS appears to be a partial substitute for internal integration as a driver of planning comprehensiveness. Most importantly, the results suggest that planning comprehensiveness is a significant generative means by which integration and technology investments produce superior operational performance. These findings provide a richer and more theoretically grounded explanation of relationships between supply chain integration, supply chain planning, and operational performance.     

Decision‐Making Analytics Using Plural Resilience Parameters for Adaptive Management of Complex Systems

It is critical for complex systems to effectively recover, adapt, and reorganize after system disruptions. Common approaches for evaluating system resilience typically study single measures of performance at one time, such as with a single resilience curve. However, multiple measures of performance are needed for complex systems that involve many components, functions, and noncommensurate valuations of performance. Hence, this article presents a framework for: (1) modeling resilience for complex systems with competing measures of performance, and (2) modeling decision making for investing in these systems using multiple stakeholder perspectives and multicriteria decision analysis. This resilience framework, which is described and demonstrated in this article via a real‐world case study, will be of interest to managers of complex systems, such as supply chains and large‐scale infrastructure networks.     

Information models: a precursor to software interoperability

This paper aims at investigating a new methodology to evaluate supply chain integration by applying the fuzzy sets theory. Fuzzy sets proved successful in environments similar to supply chain management in that they help to formalise human reasoning patterns and to develop high-performance expert systems in contexts where data are affected by uncertainty and/or vagueness: e.g. fuzzy sets have been already used in inventory planning, to improve organisational effectiveness, to perform suppliers’ evaluation etc. In particular, the study presented here deals with the ways to measure and achieve supply chain integration and it mainly focuses on the external integration (i.e. on the ability to leverage partnerships within the chain), clustered in two areas, i.e. the network design and the management policies. The new methodology has been applied to a case study which consists of a 3-stage supply chain belonging to the beauty and personal care industry. Results of the case-study indicate that the companies still have important edges for improvement towards a complete integration of their supply processes. In particular, the considered supply chain should prioritise the integration of technology-driven investments and in the distribution area.     

基于线性分段恢复函数的基础设施韧性分析模型——以C县电力系统网络为例

针对近年来一系列突发事件冲击和破坏着城市关键基础设施系统的正常运行,并造成了较为严重的社会后果的现实问题,提出了如何保护关键基础设施系统的研究问题,以使基础设施系统能够对灾害情景做出迅速的响应,并迅速地处理以恢复到常态。本研究基于三种典型的恢复函数提出了线性分段恢复函数,构建了关键基础设施系统韧性分析模型,并用蒙特卡洛模拟的方法应用到C县的电力系统网络加以验证,得到了该韧性分析模型不仅可以帮助决策者在灾害情境下权衡预算成本和韧性的关系,也可以识别关键基础设施系统网络中需要保护的关键节点,从而实现对关键基础设施系统的针对性保护的结论。本研究构建的韧性分析模型有为灾害情境下对电力系统采取针对性保护的现实价值,和开拓了对基础设施系统进行保护研究的分析模型的理论价值。