Managing supply disruption through procurement strategy and price competition

He, Bo; Huang, He; Yuan, Kaifu

doi:10.1080/00207543.2015.1074297

Cited by 33 publications

(17 citation statements)

References 37 publications

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“…Thus, one failure in the supply chain may lead to other entities failing and may even result in an entire supply chain shutting down (Jüttner and Maklan 2011). While it may be possible to manage disruptions affecting a firm by dispersing purchases across different suppliers (Gupta et al 2015;He et al 2016), that management practice may actually increase the propagation of the disruption at an aggregated level. Therefore, disruptions must be contained before they can affect a larger portion of the supply chain (Chopra and Sodhi 2004;Blackhurst et al 2011;Marley et al 2014).…”

Section: Introductionmentioning

confidence: 99%

Supply chain disruption propagation: a systemic risk and normal accident theory perspective

Scheibe

Blackhurst

2017

International Journal of Production Research

291

162

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When a disruption occurs in a firm, its effects are often felt throughout the supply chain. As supply chains expand globally and companies pursue velocity and efficiency, the probability of disruptions propagating throughout a chain grows. In this paper, we employ a qualitative, grounded theory case study approach to help understand what drives supply chain disruption propagation and to provide theoretical insights into this emerging area. For a more complete perspective, we study three interconnected tiers in seven unique supply chains. Each supply chain triad consists of (1) a focal firm (a manufacturer), (2) a supplier to the focal firm and (3) a customer of the focal firm allowing us to gain perspective from three levels in multiple supply chains. Three aggregate dimensions are defined which help explain the propagation of supply chain disruptions: the nature of the disruption, structure and dependence, and managerial decision-making. Within these dimensions, six themes are identified giving an increased level of granularity into disruption propagation: correlation of risk, compounding effects, cyclical linkages, counterparty risk, herding and misaligned incentives. Organisations should consider these themes and their interactions to effectively deal with supply chain disruptions. ABSTRACTWhen a disruption occurs in a firm, its effects are often felt throughout the supply chain. As supply chains expand globally and companies pursue velocity and efficiency, the probability of disruptions propagating throughout a chain grows. In this paper, we employ a qualitative, grounded theory case study approach to help understand what drives supply chain disruption propagation and to provide theoretical insights into this emerging area. For a more complete perspective, we study three interconnected tiers in seven unique supply chains. Each supply chain triad consists of (1) a focal firm (a manufacturer), (2) a supplier to the focal firm and (3) a customer of the focal firm allowing us to gain perspective from three levels in multiple supply chains. Three aggregate dimensions are defined which help explain the propagation of supply chain disruptions: the nature of the disruption, structure and dependence, and managerial decision making. Within these dimensions, six themes are identified giving an increased level of granularity into disruption propagation: correlation of risk, compounding effects, cyclical linkages, counterparty risk, herding, and misaligned incentives. Organizations should consider these themes and their interactions to effectively deal with supply chain disruptions.

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Section: Introductionmentioning

confidence: 99%

Supply chain disruption propagation: a systemic risk and normal accident theory perspective

Scheibe

Blackhurst

2017

International Journal of Production Research

291

162

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“…The results indicate that supply disruption and procurement times jointly impact the firms' buying decisions. The findings in He, Huang, and Yuan (2016) showed that reliability thresholds play a critical role in buyer procurement strategy choices, which are related to sales price, underage cost, and differentials in unit procurement cost. They explored the effects of reliability levels and costs on equilibrium prices, expected profits, and equilibrium strategy profiles.…”

Section: Product and Process Redundancy: Proactive Stagementioning

confidence: 99%

Low-Certainty-Need (LCN) supply chains: a new perspective in managing disruption risks and resilience

Ivanov

Dolgui

2018

International Journal of Production Research

248

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This study suggests a new approach to supply chain (SC) disruption risk management where SC behaviour is less dependent on the certainty of our knowledge about the environment and its changes. The unpredictability of the occurrence of disruption and its magnitude suggests that designing SCs with a low need for 'certainty' may be as important, if not more so, than predetermined disruption control strategies. In this setting, this study calls for the development of a new perspective in SC disruption management, i.e. low-certainty-need (LCN) SCs. A number of principles and concepts is derived in recent, relevant literature to structure the characteristics of the LCN framework and its management. Structural variety, process flexibility, and parametrical redundancy are identified as key LCN SC characteristics that ensure efficient disruption resistance as well as recovery resource allocation. Two efficiency capabilities of the LCN SC are shown, i.e. low need for uncertainty consideration in planning decisions and low need for recovery coordination efforts based on a combination of lean and resilient elements. The results allow the identification of an LCN SC framework, concepts and technologies for its implementation as well as missing themes and new research questions which contribute to a better understanding of SC disruption risks. Special focus is directed on the digital technology usage in the LCN framework implementation.

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“…Hou and Zhao [13] made a backup agreement with a penalty scheme between retailers and backup suppliers to mitigate the impact of supply disruption. In the context of supply chain system under supply disruptions, He et al [14] worked out an emergency procurement strategy to manage supply disruption.…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, scholars [11][12][13][14][15][16][17][18][19][20] did not consider how distributors deliver goods to each other when the supply chain suffers supply disruptions. Furthermore, current studies [11][12][13][14][15][16][17][18][19][20] did not explore the existing switching activities among emergency subsystems.…”

Section: Literature Reviewmentioning

confidence: 99%

Fuzzy Emergency Model and Robust Emergency Strategy of Supply Chain System under Random Supply Disruptions

Zhang

2019

Complexity

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For random distributors under supply disruptions caused by emergency incidents, a fuzzy emergency model and a robust emergency strategy of the supply chain system are studied. First, for a kind of supply chain system composed of a strategic manufacturer, a backup manufacturer, and multiple distributors, the basic emergency models, including the inventory models and a total cost model, are constructed under random supply disruptions. Then, based on the Takagi-Sugeno fuzzy system, the basic emergency models of the supply chain system are converted into a discrete switching model, which can realize soft switching among the basic emergency models. Furthermore, according to the different inventory levels, the strategic manufacturer’s production strategies and the distributors’ ordering strategies are designed to reduce the inventory costs of the node enterprises in supply chain system. Second, by defining a discrete piecewise Lyapunov function in each maximal overlapped-rules group, a new fuzzy robust emergency strategy for the supply chain system is proposed through the principle of parallel distributed compensation. This emergency strategy can not only restore the impaired supply chain to the normal operation state but also keep the total cost of the supply chain at a low level and guarantee the robust stability of the emergency supply chain system. Finally, the simulation results illustrate the effectiveness of the proposed fuzzy robust emergency strategy of the supply chain system.

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Managing supply disruption through procurement strategy and price competition

Cited by 33 publications

References 37 publications

Supply chain disruption propagation: a systemic risk and normal accident theory perspective

Supply chain disruption propagation: a systemic risk and normal accident theory perspective

Low-Certainty-Need (LCN) supply chains: a new perspective in managing disruption risks and resilience

Fuzzy Emergency Model and Robust Emergency Strategy of Supply Chain System under Random Supply Disruptions

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