Identifying and mitigating the antecedents of supply chain disruptions - 3 essays

Abstract

Globalization facilitated by information technology has changed the nature of work; work in today's economy is increasingly performed in geographically dispersed and loosely connected networks of firms, shifting competitive basis from individual firms to supply chains. Managing supply chains effectively and efficiently is critical to succeed in the current business environment. At the same time, breakdowns in supply chains, frequently referred to as supply chain disruptions, are cited as one of the main threats to firm profitability, both in terms of revenue loss and customer dissatisfaction. In this study, we address three research questions: first, what is supply chain disruption and how can we measure it; second, what are the antecedents associated with supply chain disruptions; and third, how can we mitigate the impact of the antecedents on supply chain disruption. We define disruptions as "an unplanned stoppage of the material flow within the supply chain" and identify frequency, duration, spread and impact as four key dimensions to represent the disruption construct. Using insights from Normal Accident Theory, we identify system complexity as a key antecedent that impacts supply chain disruption. Finally, we identify information processing capability as the key characteristic that helps mitigate the impact of complexity on disruption. We use primary data from 189 respondents and employ multivariate analysis to examine our research questions. Results from data analysis show a significant positive relationship between supply chain complexity and disruptions, indicating that more complex supply chains are more susceptible to disruptions. Our results also show that increasing information process capability mitigates the impact of complexity on disruption. This is one of the first studies to empirically examine the causes and effects of supply chain disruption.