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.     

Supply Network Structure,Visibility, and Risk Diffusion: A Computational Approach

Understanding and managing supply chain risks is a critical functional competency for today's global enterprises. A lack of this competency can have significant negative outcomes, including costly production and delivery delays, loss of future sales, and a tarnished corporate image. The ability to identify and mitigate risks, however, is complicated as supply chains are becoming increasingly global, complex, and interconnected. Drawing on the complex systems and epidemiology literature, and using a computational modeling and network analysis approach, we examine the impact of global supply network structure on risk diffusion and supply network health and demonstrate the importance of supply network visibility. Our results show a significant association between network structure and both risk diffusion and supply network health. In particular, our results indicate that small‐world supply network topologies consistently outperform supply networks with scale‐free characteristics. Theoretically, our study contributes to our understanding of risk management and supply networks as complex networked systems using a computational approach. Managerially, our study illustrates how decision makers can benefit from a network analytic approach to develop a more holistic understanding of system‐wide risk diffusion and to guide network governance policies for more favorable health level outcomes. The article concludes by highlighting the main findings and discussing possibilities of future research directions.     

Supply Management Under High Goal Incongruence: An Empirical Examination of Disintermediation in the Aerospace Supply Chain

Aftermarket sales and profits are becoming an increasingly important part of an original equipment manufacturer's (OEM) business model. Because replacement parts often do not require further manufacturing, OEMs act as intermediaries in the aftermarket. As with any intermediary, the OEM must concern itself with suppliers disintermediating its supply chain selling replacement parts directly to the OEM's customers. We frame supply chain disintermediation (SCD) as a principal–agent contracting problem between an OEM buyer and a supplier. Hypotheses relate contract conditions, goal incongruence, supplier capabilities and contract enforcement to SCD. The data are collected from the aerospace industry using a multimethod study, combining an Internet‐based survey with archival data. Causal modeling with structural equation modeling (SEM) shows general support for the hypotheses. Particularly, SCD is positively related to buyer–supplier goal incongruence. The agency model offers insights that differ from previous transaction‐cost‐based models of buyer–supplier relationships. OEM buyers with a lucrative aftermarket should consider aligning goals through incentives rather than relying entirely on economic hostages associated with specific assets.     

Path to “Stardom” in Globally Distributed Hybrid Teams: An Examination of a Knowledge‐Centered Perspective using Social Network Analysis

Although distributed teams have been researched extensively in information systems and decision science disciplines, a review of the literature suggests that the dominant focus has been on understanding the factors affecting performance at the team level. There has however been an increasing recognition that specific individuals within such teams are often critical to the team's performance. Consequently, existing knowledge about such teams may be enhanced by examining the factors that affect the performance of individual team members. This study attempts to address this need by identifying individuals who emerge as “stars” in globally distributed teams involved in knowledge work such as information systems development (ISD). Specifically, the study takes a knowledge‐centered view in explaining which factors lead to “stardom” in such teams. Further, it adopts a social network approach consistent with the core principles of structural/relational analysis in developing and empirically validating the research model. Data from U.S.–Scandinavia self‐managed “hybrid” teams engaged in systems development were used to deductively test the proposed model. The overall study has several implications for group decision making: (i) the study focuses on stars within distributed teams, who play an important role in shaping group decision making, and emerge as a result of a negotiated/consensual decision making within egalitarian teams; (ii) an examination of emergent stars from the team members’ point of view reflects the collective acceptance and support dimension decision‐making contexts identified in prior literature; (iii) finally, the study suggests that the social network analysis technique using relational data can be a tool for a democratic decision‐making technique within groups.     

Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non‐IT Resources*

Drawing on the resource‐based view, we propose a configurational perspective of how information technology (IT) assets and capabilities affect firm performance. Our premise is that IT assets and IT managerial capabilities are components in organizational design, and as such, their impact can only be understood by taking into consideration the interactions between those IT assets and capabilities and other non‐IT components. We develop and test a model that assesses the impact of explicit and tacit IT resources by examining their interactions with two non‐IT resources (open communication and business work practices). Our analysis of data collected from a sample of firms in the third‐party logistics industry supports the proposed configurational perspective, showing that IT resources can either enhance (complement) or suppress (by substituting for) the effects of non‐IT resources on process performance. More specifically, we find evidence of complementarities between shared business–IT knowledge and business work practice and between the scope of IT applications and an open communication culture in affecting the performance of the customer‐service process; but there is evidence of substitutability between shared knowledge and open communications. For decision making, our results reinforce the need to account for all dimensions of possible interaction between IT and non‐IT resources when evaluating IT investments.     

The Decision of the Supply Chain Executive to Support or Impede Supply Chain Integration: A Multidisciplinary Behavioral Agency Perspective*

Applying the behavioral agency model developed by Wiseman and Gomez‐Mejia (1998) , this article analyzes human resource factors that induce supply chain executives (SCEs) to make decisions that foster or hinder supply chain integration. We examine two internal sources (compensation and employment risk) and one external source (environmental volatility) of risk bearing that can make SCEs more reluctant to make the decision to promote supply chain integration. We argue and empirically confirm the notion that an employment and compensation system that increases SCE risk bearing reduces the SCE's willingness to make risky decisions and thus discourages supply chain integration. We also reveal that this negative relationship becomes stronger under conditions of high environmental volatility. In addressing the “so what?” question, we found empirical support for the hypothesis that supply chain integration positively influences operational performance. Even though this decision has a positive value for the firm, we showed that SCEs discourage supply chain integration when they face higher risk bearing. Hypotheses are tested using a combination of primary survey data and archival measures in a sample of 133 Spanish firms.