Ensuring Supply Chain Resilience: Development and Implementation of an Assessment Tool

Abstract

I n today's tightly connected global economy, traditional management practices that rely on "steady-state" conditions are challenged by chaotic external pressures and turbulent change. Just in the last few years, the world has experienced a string of catastrophic events, including a global economic meltdown, a volcanic eruption in Iceland, an oil spill in the Gulf of Mexico, a disastrous tsunami and power blackout in Japan, and political upheavals in Africa and the Middle East. Managing the risk of an uncertain future is a challenge that requires resilience-the ability to survive, adapt, and grow in the face of turbulent change. This research develops a measurement tool titled the Supply Chain Resilience Assessment and Management (SCRAM TM ). Data gathered from seven global manufacturing and service firms are used to validate SCRAM TM , using qualitative methodology with 1,369 empirical items from focus groups reviewing 14 recent disruptions. Critical linkages are uncovered between the inherent vulnerability factors and controllable capability factors. Through mixed-method triangulation, this research identified 311 specific linkages that can be used to guide a resilience improvement process. Pilot testing suggests a correlation between increased resilience and improved supply chain performance.

Managing Capabilities for Supply Chain Resilience Through it Integration

“…However, this research did not consider the combination of flexibility and redundancy practices influence on supply chain resilience. Croxton et al (2013) analysed supply chain resilience relationship with supply chain performance. The research developed a measurement tool titled the "Supply Chain Resilience Assessment and Management" (SCRAM).…”

“…Ambulkar et al (2015) indicate the necessity to have flexibility and agility to effectively manage the infrastructure of the collaboration. The empirical evidence of Croxton et al (2013) revealed that low collaboration, lack of excess capacity, and minimal flexibility are the major causes of ineffective supply chain resilience. Park's (2011) empirical evidence identified that resilience and redundancy practices positively affect supply chain resilience.…”

Coping with uncertainties via resilient supply chain framework

“…Two Japanese plants accounting for 25% of the world's supply of silicon wafers for computer chips were closed (Cooper et al, 2011). The physical destruction and nuclear power shut-downs caused Toyota production to drop by 40,000 vehicles, costing $72 million in profits daily (Kachi and Takahashi, 2011;Pettit et al, 2013). This is analogous with the observation by Christopher and Holweg (2011) that managers consistently recognise their business environment as inherently unstable and find supply chains to experience the 'age of turbulence' (Wieland and Wallenburg, 2013).…”

“…An improved consideration of design for resilient, coupled and complex systems must be featured (Park et al, 2011). The predominant approach to enterprise risk management requires risk identification and quantification, which are not always possible in the absence of empirical data (Pettit et al, 2013).…”

Communicating supply chain risks and mitigation strategies: a comprehensive framework

“…For instance, the global automotive and electronics supply chains experienced severe disruptions after the earthquake, tsunami and the subsequent nuclear crisis in Japan in 2011. It is reported that the disaster caused supply chain disruptions which costed Toyota $72 million in profits per day (Pettit et al 2013). The supply chains of Japanese automotive companies with plants in Thailand were disrupted by the catastrophic flooding in 2011, and the same flooding also severely affected the supply chains of computer manufacturers that rely on the supply of hard discs from the region (Chopra and Sodhi 2014).…”