Assessing the current state of supply chain volatility: development of a benchmarking instrument

Abstract

Paper aims: The study proposes a benchmarking instrument that enables managers to critically assess the volatility management performance of a product's supply chain to identify areas on which to focus when managing supply chain volatility (SCV). Originality: To the best of the authors' knowledge, the paper is the first to develop an instrument to assess the current state of SCV management of a product's supply chain. Research method: The benchmarking instrument is based on volatility performance data from 87 manufacturing firms. Additionally, a confirmatory case study in the automotive industry is performed to demonstrate the applicability of the instrument. Main findings: An industry benchmark is conducted that provides valuable information for practitioners about the current state of volatility management performance in the manufacturing sector. This is of high importance since performance data generated by the focal firm itself are more valuable if they can be put into context with the performance data of competitors. Implications for theory and practice: Since SCV can originate from multiple sources, a case-based evaluation of of SCV of a product's supply chain is necessary. By applying the instrument, managers will be enables to initiate purposeful strategies that focus on the most pressing sources of SCV.

Sources of Supply Chain Volatility: A Literature Review

“…It is recognized that managing volatility is an antecedent of a firm's sustainability, and hence contribution to the United Nations Sustainable Development Goals. Even though, managing volatility remains a frugal challenge of modern supply chains in the current century (Nitsche, Straube & Verhoeven, 2019). The research in SCV has changed drastically among scholarly works, from explaining the sources of volatilities among chains (Nitsche & Durach, 2018), to developing frameworks and strategies for managing volatilities (Nitsche et al, 2019).…”

“…Even though, managing volatility remains a frugal challenge of modern supply chains in the current century (Nitsche, Straube & Verhoeven, 2019). The research in SCV has changed drastically among scholarly works, from explaining the sources of volatilities among chains (Nitsche & Durach, 2018), to developing frameworks and strategies for managing volatilities (Nitsche et al, 2019). Many scholars have therefore suggested different approaches in underpinning the source of volatilities in supply chains.…”

“…Lastly, a paltry 26.67% of all the studies were exploratory studies. Nitsche, 2019) who also adopted price uncertainty as the source of volatility.…”

“…Demand variability was however used by majority of the studies in different contexts (Nitsche & Durach, 2018;Holweg, 2017, Humair et al, 2013Taskin et al, 2015;Abolghasemi et al 2020;Pellegrino et al, 2018;Nitsche et al, 2019;Nitsche, 2019) implying that it was the major source of supply chain volatility having been adopted by majority of the studies (9) based on the systematic review of the literature over the past decade between 2013 to 2023.…”