Stochastic Optimization of Supply Chain Resilience under Ripple Effect: A COVID-19 Pandemic Related Study

PurposeRecent studies have argued that companies may actively implement practices to mitigate disruptions in their supply chain and reduce the extent of damage on performance. Other studies have shown that disruptions may propagate in supply chains, leading to consequences that are more negative and raising doubts on the effectiveness of mitigation strategies implemented downstream. This study investigates the influence of supply chain complexity on the two phenomena and their interplay, taking a focal company's perspective.Design/methodology/approachA systematic procedure for data collection, encoding and aggregation based on incident data mainly from secondary sources was used. Multiple regression models were run to analyse direct and moderation effects involving resilience, distance of impact location from trigger point, and supply chain complexity on weighted performance change.FindingsSupply chain complexity is found to have positive moderation on the ripple effect of disruption. Resilience capability remains to have dominating direct positive effect in mitigating disruptions when supply chain complexity is taken into account.Research limitations/implicationsThis study extends the research discourse on supply chain resilience and disruption management with focus on the supply side. It demonstrates that, along with the severity of the disruption scenario, the ripple effect must also be considered when analyzing the benefits of resilience practices implemented by the focal company.Practical implicationsComplexity in the supply chain can only help to smooth-out the rippling effects of a disruption, which go largely beyond supply-demand unbalances and lead time fluctuations. To mitigate it better, the focal company has to act proactively with adequate resilience practices, which also connects to the importance of better visibility across multiple supply chain tiers.Originality/valueTo the best of the authors' knowledge, this is the first study that empirically tests the benefits of resilience practices and the ripple effect of disruptions under the moderation role of supply chain complexity.

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An empirical examination of firm financial performance along dimensions of supply chain resilience

Management Research Review ◽

10.1108/mrr-02-2016-0030 ◽

2017 ◽

Vol 40 (3) ◽

pp. 254-269 ◽

Cited By ~ 24

Author(s):

Xun Li ◽

Qun Wu ◽

Clyde W. Holsapple ◽

Thomas Goldsby

Keyword(s):

Supply Chain ◽

Financial Performance ◽

Three Dimensions ◽

Empirical Examination ◽

Content Type ◽

Supply Chain Resilience ◽

Critical Dimensions ◽

Firm Financial Performance ◽

Supply Chain Agility ◽

The Impact

Purpose This paper aims to investigate the impact of three critical dimensions of supply chain resilience, supply chain preparedness, supply chain alertness and supply chain agility, all aimed at increasing a firm’s financial outcomes. In a turbulent environment, firms require resilience in their supply chains to prepare for potential changes, detect changes and respond to actual changes, thus providing superior value. Design/methodology/approach Using survey data from 77 firms, this study develops scales for preparedness, alertness and agility. It then tests their hypothesized relationships with a firm’s financial performance. Findings The results reveal that the three dimensions of supply chain resilience (i.e. preparedness, alertness and agility) significantly impact a firm’s financial performance. It is also found that supply chain preparedness, as a proactive resilience capability, has a greater influence on a firm’s financial performance than the reactive capabilities including alertness and agility, suggesting that firms should pay more attention to proactive approaches for building supply chain resilience. Originality/value First, this study develops a comparatively comprehensive definition for supply chain resilience and explores its dimensionality. Second, this study provides empirically validated instruments for the dimensions of supply chain resilience. Third, this study is one of the first to provide empirical evidence for direct impact of supply chain resilience dimensions on a firm’s financial performance.

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