Collaborate or not? A system dynamics study on disruption recovery

Abstract

Purpose -The purpose of this paper is to investigate different combinations of collaboration strategies to deal with different types of supply chain disruptions, find the best combination, and provide targeting suggestions for investments. Design/methodology/approach -A system dynamics simulation is applied to study a supply chain with three tiers: a producer, a logistics service provider (LSP), and a retailer. There are three types of disruptions to simulate: a producer capacity disruption, an LSP capacity disruption, and a demand disruption. As each tier has the option to choose whether or not to collaborate with the other two tiers, eight (2 × 2 × 2) scenarios are generated to represent different combinations of collaboration strategies. Findings -For a producer capacity disruption, both the producer and the LSP should collaborate by providing their surge capacities, while the retailer does not have to collaborate. For an LSP capacity disruption, the producer should not provide its surge capacity, while the LSP should do so; the retailer does not have to collaborate. For a demand disruption, both the producer and the LSP should not provide their surge capacities, while the retailer should not collaborate but play shortage gaming. Targeting suggestions for investments are provided. Originality/value -Through system dynamics modeling, this study allows the discussion of surge capacity to help supply chain partners and the discussion of shortage gaming when products are oversupplied, in a disruption recovery system over time.

Twin-objective supply chain collaboration to cope with rare but high impact disruptions whilst improving performance

“…For example, in 2000, a fire destroyed the entire production capacity of a chip plant of Philips Electronics in Albuquerque, a sub-supplier of the Scandinavian cell phone maker Nokia and Ericsson, for several weeks (Latour, 2001). Nokia collaborated with Philips to switch its chip orders to other Philips' plants to use their surge capacity (Zhu et al, 2016), while Ericsson, with limited actions, incurred a loss of $400 million (Sheffi, 2005). Therefore, we argue that the adjustment of the focal firm's strategy can be drawn from SCC, as SCC facilitates information sharing (Sahin and Robinson, 2005), joint decision making (Simatupang and Sridharan, 2004), and resource sharing (Lavie, 2006).…”

A conceptual framework for improving effectiveness of risk management in supply networks

“…Future research should also take into account other contingent factors which can explain the impact of SCI on risk management effectiveness; e.g., the type of product, product architecture, supplier characteristics (Trkman and Chaudhuri, A., Ghadge, A., Gaudenzi, B. and Dani, S. (2020), "A conceptual framework for improving effectiveness of risk management in supply networks", International Journal of Logistics Management, (10.1108/IJLM-11-2018-0289), Accepted. McCormack, 2009) and type of disruptions (Zhu et al, 2016). Other opportunities exist to develop and validate collaborative risk management processes and governance mechanisms in supply networks, with different characteristics to improve the effectiveness of risk management and performances of the network.…”

“…This study only considered network characteristics as a single contingent factor impacting the relationship between SCI and the effectiveness of risk management. Future research should also take into account other contingent factors which can explain the impact of SCI on risk management effectiveness; e.g., the type of product, product architecture, supplier characteristics (Trkman and McCormack, 2009), and type of disruptions (Zhu et al , 2016). Other opportunities exist to develop and validate collaborative risk management processes and governance mechanisms in supply networks, with different characteristics to improve the effectiveness of risk management and performances of the network.…”

Collaborative services provision for solar power plants

“…As it is well known in other sectors (e.g. manufacturing and services), the formation of alliances can provide SMEs with a larger (apparent) size (through sharing of resources) and agility (through combination of competencies) that let them more easily adapt to different market conditions (Camarinha-Matos, 2009;Romero et al, 2013;Zhu et al, 2016). Furthermore, the need to involve in solar projects both the customer and other local stakeholders close to the customer also re-enforces the need to create alliances.…”