THE INFLUENCE OF EVENT CHARACTERISTICS ON
DECISION-MAKING IN SUPPLY CHAIN DISRUPTIONS
by
Gerryt Coen Annema
University of Groningen Faculty of Economics and Business Pre-MSc Supply Chain Management
June 2020
Verlengde Visserstraat 11A 9718JA Groningen g.c.annema@student.rug.nl
ABSTRACT
The nature of disruptive events and their impact on supply chains have evolved over the last years. Research on the organizational capabilities collaboration, flexibility, velocity and visibility exist to create more resilient supply chains. However, identifying the role of disruptive event characteristics on decision-making might allow organizations to create more resilient supply chains. Qualitative research has been conducted by interviewing eight organizations about how event characteristics of disruptions have influenced their decision-making. Amongst other findings, it was found that organizations operative in complex organizational environments require higher visibility capabilities. This research contributes to the existing knowledge on supply chain resilience by focusing on how organizations can improve the resilience of their supply chain as a result of disruptive events. In practice, this research is a contribution to organizations how to deal with future disruptions in their decision-making as a result of occurred disruptions.
Keywords:
Supply chain resilience Supply chain disruptions Supply chain collaboration Event characteristics
Supervisor: M.J. van den Adel
INTRODUCTION
Over the last several years, companies have faced increasing levels of risk and volatility as a result of business environments becoming more complex, affecting their operations and supply chain (Schmidt, 2015; Scholten & Schilder, 2015). The increased exposure to supply chain disruptions is caused by numerous factors such as natural disasters, power outages, epidemics, governmental laws and regulations, and the increasing threat of cyber-attacks. The impact of supply chain disruptions is exemplified by large financial losses and have a negative influence on shareholder wealth and operating performance (Macdonald & Corsi, 2013). To illustrate, in 2019, 52 per cent of companies experienced disruptions, of which 15 per cent suffered more than €1 million in cumulative costs for disruption incidents (Business Continuity Institute, 2019). Hence, it is crucial for firms to attempt continuously to increase their capability to minimize the impact of such supply chain disruptions (i.e., build resilience).
Formerly, firms preferred operating in isolation, remaining hesitant for collaboration since collaboration results in loss of control of information and disclosure of their established competitive advantage (Ali, Mahfouz, & Arisha, 2017; Sinha, Whitman, & Malzahn, 2004; Zeng, Wang, Deng, Cao, & Khundker, 2012). However, as supply chain networks enter an era of turbulence, new approaches and thinking are needed to design, build and manage supply chains to protect them from disruptions (Ali et al., 2017). Several studies mention the concept of collaboration, which may be seen as the fundamental element to increase resilience (Christopher & Peck, 2004; Hohenstein, Feise, Hartmann, & Giunipero, 2015; Pettit, Croxton, & Fiksel, 2013). Namely, by sharing crucial information, valuable knowledge and establishing joint efforts (Jüttner & Maklan, 2011). Crucially, the sharing of information and valuable knowledge contributes to increased readiness, reduces uncertainty and chances of opportunistic behaviour result in higher resilience (Cranfield School of Management, 2003; Jüttner & Maklan, 2011).
decision-making process to collaborate with other entities for increasing resilience. This is surprising considering that related research has illustrated that collaboration may not always be beneficial, such that some disruptions may not necessarily be effectively resolved by collaboration. For example, the unlimited sharing of confidential information can compromise secure collaboration which is defined by Zeng et al. (2012) as balancing collaboration and security for the best competitive position in the supply chain. Another disadvantage of collaboration comes forth from the increasing pressure employees must deal with, which is required for intensive collaboration (Fugate, Thomas, & Golicic, 2012). In addition, the time- and effort consuming nature of collaboration is demonstrated by increased workloads and changing priorities (Fugate et al., 2012; Vanpoucke & Ellis, 2018). Moreover, traditional methods such as Just-In-Time (JIT) and Vendor Managed Inventory (VMI) which require close collaboration, have shown to be causes of supply chain disruptions. This is exemplified by the dramatic reduction of stock, causing suppliers to fail meeting swings in demand (Pettit, Fiksel, & Croxton, 2010). In essence, the actions to be undertaken in response to the variability and nature of event characteristics determine the way organizations engage in collaborative activities (Christopher & Holweg, 2011). Little research considered that these drawbacks may cause firms to decide not to engage in collaboration to resolve a disruption. Therefore, the main research question to be answered in this study is:
What event characteristics of disruptions influence a firm’s decision to collaborate with other entities in the supply chain to build resilience?
The remainder of this research is structured as follows: first, a literature review is provided on resilience, collaboration, disruptions and event characteristics. Secondly, the methodology justifies what methods are used in conducting and analysing the data. Lastly, the conclusion and limitations of this research are discussed and recommendations for future research is presented.
LITERATURE REVIEW Supply Chain Resilience
Within supply chain management, resilience indicates the ability to plan and design the supply chain network proactively to anticipate unexpected disruptive events and responding appropriately (Koronis & Ponis, 2012). Restructuring the supply chain to its former or better state implies taking the right action, which will help generate a more resilient supply chain (Paul, Sarker, & Essam, 2017). A common finding amongst research is that resilience is not a one-time event but must be well-established as a process in a firms supply chain network (Hohenstein et al., 2015; Jüttner & Maklan, 2011; Scholten & Schilder, 2015). At present, collaboration, by aligning operational capabilities with supply chain partners, forms the basis for remaining resilient against supply chain disruptions (Jüttner & Maklan, 2011; Pettit et al., 2013). Scholten & Schilder (2015) identified collaboration as an antecedent of the widely applied resilience capabilities constructs of flexibility, velocity and visibility.
establishing confidence between entities, minimizing overreaction and enhancing effective decision-making during potential disruptive events (Christopher & Lee, 2004).
Supply Chain Collaboration
Initially, supply chain collaboration has been identified as an important aspect in remaining resilient (Pettit et al., 2013; Scholten & Schilder, 2015). Currently, many organizations exploit collaborative practices to obtain competitive advantage (Cao, Vonderembse, Zhang, & Ragu-Nathan, 2010). In essence, supply chain collaboration can be defined as “two or more autonomous firms that form long-term relationships and work closely to plan and execute supply chain operations toward common goals, thereby achieving more benefits than acting independently” (Cao et al., 2010: 6614). In practice, collaboration is achieved through activities such as sharing forecast and demand, inventory adjustment, inventory replenishment and coordinated ordering (Duong & Chong, 2020).
The disadvantages of collaboration encompass the necessity of sharing confidential information, higher dependence on other firms and the time consuming nature of collaboration to become more resilient against disruptive events (Fugate et al., 2012; Vanpoucke & Ellis, 2018). At present, the drawback of engaging in collaboration, is the increasing vulnerability of a firms’ competitive advantage (Duong & Chong, 2020). Therefore, it is evident for firms to carefully balance the drawbacks and benefits of supply chain collaboration. At present, little research has been conducted which stresses the influence of event characteristics of disruptions on decision-making for collaboration. Therefore, the focus of this study is on analysing the event characteristics: severity of disruptions, location of disruptions and environmental complexity and how these characteristics influence the decision-making process in collaborating with other entities in disruptive states in order to create more resilient supply chains. The former mentioned event characteristics were specifically chosen since their relationship with collaboration was found to be important in earlier studies on supply chain resilience by Craighead, Blackhurst, Rungtusanatham, & Handfield (2007), Kleindorfer & Saad (2009) and Chopra & Sodhi (2004).
Event Characteristics
disruptions. Firstly, the severity of the disruption encompasses the number of entities in the supply chain, whose ability to receive goods and materials are obstructed (Craighead et al., 2007). Within the literature, Kleindorfer & Saad, (2009) distinguish the severity of disruptions into ‘purposeful’ and ‘accidental’ disruptions. This research focuses solely on accidental disruptive events, which comprehend the coordination and demand of supply between multiple supply chain actors (Kleindorfer & Saad, 2009). Secondly, Chopra & Sodhi (2004) identified the location of the disruption where the disruption occurred as an event characteristic. A distinction is made between the location being at the supplier, located internally or located at the customer. Lastly, Dess & Beard (1984) identified environmental complexity as the heterogeneity of the environment in which firms compete. To be more specific, Dess & Beard (1984) found environmental complexity to be higher within firms that must communicate with a higher variety and a larger number of entities in their supply chain. The event characteristics severity of disruptions, location of disruptions and environmental complexity were defined by using pre-existing literature. The adapted definitions used for this research are presented in table 1.
Table 1. Definition of themes - event characteristic Event
characteristic Keywords Definition
Severity of
disruption Entities involved Continuity Impact Cause
“The number of entities whose ability to ship and receive and ship goods has been hampered by an unplanned, unanticipated event. More severe supply chain disruptions have a more far-reaching
financially devastating impact than less severe disruptions” (Craighead et al., 2007).
Location of disruption
Supplier Focal firm Customer
“The part of the supply chain that was affected, supplier vocal firm or customer” (Chopra & Sodhi, 2004).
Environmental
Complexity Uncertainty Dependability Information processing Power of stakeholders
“Complexity of the environment in which the firm competes determine the uncertainty, such as the variety and number of organizations, with which the firm must interact” (Dess & Beard, 1984).
Figure 1. Research framework
essence, firms have to improve existing or have to adapt new collaborative strategies as the frequency, variability and intensity of disasters continue to increase (Day, 2014).
Table 2. Collaborative activities adapted by (Cao et al., 2010)
Activity Definition
Information
sharing The extent to which a firm shares a variety of relevant, accurate, complete and confidential ideas, plans, and procedures with its supply chain partners in a timely manner.
Goal Congruence The extent to which supply chain partners perceive their own objectives are satisfied by accomplishing the supply chain objectives.
Decision
synchronisation
The process where supply chain synchronisation partners orchestrate decisions in supply chain planning and operations that optimise supply chain benefits. Incentive alignment The process of sharing costs, risks, and benefits among supply chain partners. Resource sharing The process of leveraging capabilities and assets and investing in capabilities
and assets with supply chain partners. Collaborative
communication
The contact and message transmission process among supply chain partners in terms of frequency, direction, mode, and influence strategy.
Joint knowledge creation
The extent to which supply chain partners develop a better understanding of and response to the market and competitive environment by working together. Research Framework
In figure 1 the relationship between the event characteristics and the decision-making process is suggested, by linking the theoretical knowledge as regards to disruptions, collaboration and resilience. It is expected that the severity of disruption, location of disruption and environmental complexity influence the need for collaboration in different ways. For instance, the event characteristic environmental complexity might influence collaborative activities such that firms become more flexible in doing business. In a similar way, the location of the disruption might be an influencer for collaboration in which higher velocity capabilities are required.
Environmental complexity
Event characteristics Resilience capabilities
METHODOLOGY Research design and research setting
To empirically investigate the influence of event characteristics on decision-making, a multiple case study was used (Eisenhardt & Graebner, 2007). The purpose of this research was gaining an in-depth understanding of phenomena depending on the direct experience of human beings (Klenke, 2016). Since little was known about the role of event characteristics on supply chain disruptions, a qualitative approach has been used for answering the research question. Case study research is particularly suited to explore a real-life phenomenon in-depth, in this case supply chain resilience (Yin, 2009). Moreover, justification of applying case study research in this research setting is the ability to ask questions addressing the why and how to be answered about the phenomenon and the stage of research, when little is yet known about the phenomenon or its variables (Meredith, 1998). The unit of analysis in this research was the specific disruption in an organization. Eight organizations were selected for conducting an interview. These organizations were selected because they acknowledged having experienced at least one supply chain disruption. The decision for interviewing organizations in different industries was made, because it provides insights into supply disruptions from different perspectives across industries. Therefore, it was expected that event characteristics across industries differ in terms of how it influences decision-making in response to disruptive events. An overview of the information of the represented organizations by respondents is presented in table 3.
Table 3. Overview of interviewed organizations Organization Industry Products / Services
Offered Number of employees Annual turnover in € Position Interviewee Organization M Food Biscuits/cookies Approx. 400 75-100 Million Logistics
Manager Organization N Packaging Packaging materials Approx. 6400 1.9 Million Supply Chain
Director Organization O Manufacturing Industrial steel
plates Approx. 100 12.5 Million Supply Chain Manager Organization P Food Soy sauce Approx. 7000 3.7 Million Transport
Manager Organization Q Utility Construction Construction and management of Leisure centres, swimming pools, offices
Organization R Construction Contracting in construction, development and construction.
Approx. 60 Not disclosed Project Manager Organization S Automotive Engineering and
sales of machines for automotive industry
Approx. 800 100 Million Manager Operations Organization T Utility Construction Design, construction, and management of accommodations and infrastructure.
Approx. 6200 2 Billion Exploitation Director
Data Collection
Table 4. Overview of disruption per organization
Organization Disruption Point of origin
Organization M Operational and financial losses caused by changes in product composition.
Supplier Organization N Operational and financial losses through inaccurate
customer demand.
Customer Organization O Stock-out as a result of increased demand. Supplier Organization P Transportation delay of products Contractor Organization Q Temporary shutdown of operations as a result of not
meeting environmental regulations.
Regulations Organization R Increased costs and overstock as a result of not
meeting industry regulations.
Regulations Organization S Obstruction and standstill and postponement of
production planning.
Regulations Organization T Obstruction and postponement of operations. Contractor Data Analysis
Table 5. Example coding tree Link to
resilience capability
Data Reduction (first-order data) Descriptive
Codes
(second-order categories)
Link with event characteristic
Link to collaborative activity
(third-order theme) Flexibility “The product was not stable enough. This resulted in the pipeline being
obstructed and that we were only able to partly use the supplied filling” (Organization M).
Impact Severity of disruption
Goal congruence “From our point of view, it was better to change our operations. In order
to prevent from running into the same problems. Therefore, we decided to make the product internally” (Organization M).
Continuity Goal congruence
“This resulted in a loss of time. Similarly, much more waste was
produced through the adjustment of machines from blank material to dark material“ (Organization N).
Continuity Goal congruence
“As a result of the disruption, we decided to adjust the production planning three months backward, to create stability in the supply chain” (Organization S).
Continuity Joint knowledge
creation “The disruption caused a situation in which we were unable to account for
the losses individually. Financial losses became so structural that we had to share the incurred costs with supply chain partners” (Organization N).
Impact Incentive alignment
“With some contractors such as installation engineers, there are only a few which we collaborate with. In fact, we do collaborate with them often. When they would decide to end the collaboration then this would be a problem for us”. (Organization Q).
Impact Goal congruence
“Also, the organization which produces product X is highly occupied at the moment, which is causing enormous lead times. If such an
organization would cease collaboration, this would have an enormous impact” (Organization Q).
Impact
“It is important to jointly find a solution. There does not exist a distinction between finding a solution with different entities” (Organization Q).
Entities
“Sometimes during a tender, the client requires us to collaborate with another contractor to meet the required revenue requirement”
(Organization Q). Power of stakeholders Environmental complexity Incentive alignment “We are in a very sensitive knowledge industry. Therefore, we have to
collaborate and think along with our suppliers” (Organization S).
Dependability Decision
synchronisation Velocity “What I also did as a result of the disruption, was bypass communication
with the usual buyer and directly inform the responsible person on the urgency of the situation” (Organization N).
Impact Continuity Severity of disruption Decision synchronisation “You have to ensure that you don’t run out of materials. This is not
accepted by the market. Therefore, I looked into the availability of materials to see if the shortages in capacity can be solved by aligning shortages with suppliers’ capacity”(Organization O).
Continuity Decision
synchronisation “In case whether the situation is urgent and the product must be delivered,
a last resort remains checking whether we can send the freight with a courier” (Organization O).
Impact Goal congruence
“In transportation we ensure there is double coverage. Meaning that if supplier X experiences trouble with delivery, then we can fall back on supplier Y” (Organization O).
Supplier Location of disruption
Goal congruence “Initially, the disruption was caused by the customer whom failed to
control its order forecast and communicated inaccurate order quantities” (Organization N).
Customer Information sharing
“The delayed delivery by supplier X was a huge problem for our
customer. Therefore, we contacted a nearby customer to see whether we could borrow his products and deliver them to the customer”
(Organization P).
Customer Resource sharing
“Our suppliers had to cope with hoarding behaviour from other
organizations. For instance, for some suppliers the revenue of products sold was 50% higher than usual. This causes these organisations to run out of stock earlier than expected on which they did not act quickly enough” (Organization O).
Supplier Collaborative
communication
Visibility “I think customer service should have decided to increase communication
“When there is a large number of organizations involved, communication must be centralized, to prevent information distortion” (Organization S).
Information processing
Collaborative communication “The production is influenced differently amongst countries by the power
of different entities in the supply chain. For instance, in France, trade unions have much power on how production is planned in factories” (Organization N).
Dependability Information sharing
“We were dependent on an advice from the government for the
continuation of our industry. Therefore, we had to wait before we were able to act upon the situation” (Organization S).
Dependability Information sharing
“Especially the quality must be up to standards. We are operative in the food industry. Therefore, products must be adequately transported and related agreements must be adhered to“ (Organization O).
Dependability Information sharing
“Communication has become more frequent and intensive during the PFAS disruption. The reason for this is that were dependent on each other” (Organization Q).
Dependability Collaborative
communication “I must acknowledge that there exists a pattern between the dependability
and the intensity of collaboration. With suppliers on which we are highly dependable, such as the producers of sensors or robots. There exists a closer collaboration then […]” (Organization S).
Dependability Information sharing
and collaborative communication “Therefore, the forecast is crucial in ensuring to keep stock at a stable
level” (Organization N). Information processing Joint knowledge creation
“In case of a disruption, communication is intensified and more frequent, what the status of the delivery to the customer is” (Organization O).
Dependability Collaborative
communication “If a disruption occurs many times in short period of time, then we ask
organization X for a report of the causes of the disruption. This
information enables us how to resolve the disruption” (Organization O).
Cause Severity of disruption
During the analysis, the findings were summarized per event characteristic. Next, cross-case analysis was used to identify emerging patterns which indicated how specific event characteristics influence decision-making during disruptive events. Lastly, to increase the reliability of the research, the interview protocol with the specific order of questions was used for all eight organizations. Moreover, the reliability of the research was enhanced by sending the transcribed interviews back to the respondents to check the collected data for perceived accuracy and consensus before using the interviews for data analysis (Cho & Trent, 2006). Both approaches were used to reduce the number of errors and biases (Yin, 2009). Construct validity was enhanced by sending a draft of the report to the reviewers, consisting of multiple key informants of which amongst others were academic co-researchers.
FINDINGS
While analysing the data, specific details were unravelled. The analysis of the event characteristics severity of disruption, location of a disruption and environmental complexity show an increased need for flexibility, velocity or visibility capabilities. Additionally, collaboration was found to enhance organizational resilience. Next, each event characteristic will be discussed in detail and how a particular event characteristic requires an increased need for flexibility, velocity or visibility.
Severity of Disruption
“As a result of the disruption, we decided to adjust the production planning three months backward, in order to create stability in the supply chain” (Organization S).
In addition, the findings of this characteristic indicate that increased flexibility capabilities can be realized by joint knowledge creation. During the interviews, it became evident that joint knowledge creation with contractors, suppliers and municipalities on the basis of working together and finding solutions together enhances flexibility capabilities. The entities involved in the disruptive event, require flexibility of firms to collaborate, as indicated by the following exemplary quote:
“The disruption caused us to contact the National Institute for Public Health and the Environment and Municipal Health Services which advised us how long to cancel our operations and find a solution for the near future” (Organization S).
As a result, flexibility capabilities are enhanced by the sharing of knowledge and by jointly exploiting opportunities in the current market. Also, the finding to become more flexible by sharing financial losses highlights the need for collaboration. This became evident when organization N decided the following:
“The disruption caused a situation in which we were unable to account for the losses individually. Financial losses became so structural that we had to share the incurred costs with supply chain partners” (Organization N).
Most interestingly, within one organization, the severity of the disruptions influenced decision-making to change operations to internal production, in order to prevent similar disruptions. This increased flexibility capabilities by no longer depending on external suppliers. As demonstrated by the interviewee as follows:
“The product was not stable enough. This caused an obstruction in operations since the adjusted product composition was not compatible with the pipelines” (Organization M).
Location of Disruption
“Initially, the disruption was caused by the customer who failed to control its order forecast and communicated inaccurate order quantities” (Organization N).
In addition, the supplier’s inability to communicate accurate quantities resulted in a sudden rise in demand for one specific product. To solve the disruption, which was outside the direct environment of organization N, a quick response was required. In essence, when the disruptive event occurs at other entities in the supply chain, organizations are reliant on the timely sharing of information. This is supported by the interviewee which stated:
“Since we plan production based on order forecasts, we are reliant on the customer proactively informing us about their expected demand and changes in demand in a timely manner” (Organization N).
In a similar way, resource sharing proved to be effective for solving disruptions, which had an impact mainly on the customer. In case of a disruptive event, being a delayed delivery at the location of the customer, organization P decided the following:
“[…] we contacted a nearby customer to see whether we could borrow his products and deliver them to the customer” (Organization P).
The importance of collaborative communication and decision synchronisation to increase velocity capabilities came forth during the data analyses. Since organizations often must react quickly to unforeseen changes in the supply chain, greater velocity capabilities are required. This finding was supported by an interviewee who stated:
“Our supplier had to cope with hoarding behaviour from other organizations. This caused our supplier to run out of stock earlier than expected which they did not act upon quick enough” (Organization O).
Environmental Complexity
In comparison to the former discussed event characteristics, the data indicate that increased visibility capabilities are required when firms are part of complex supply chains. Overall, increased visibility capabilities in complex supply chains can be achieved by collaborative communication and information sharing. In complex supply chains where many entities are involved “communication must be centralized to be able to explain why certain decisions are made and to prevent information distortion” (Organization S), to increase more resilient supply chains. In addition, in supply chains where the power of stakeholders influences decision-making, organisations are depending on information sharing and collaborative communication. During the data analysis, one interviewee expressed the following:
“The production is influenced differently amongst countries by the power of stakeholders. For instance, in France, trade unions have much power on how production is planned in factories” (Organization N).
The data shows that by regular information sharing and collaborative communication between entities in the supply chain increases visibility capabilities. In a similar way, the influence of stakeholders indicated a greater need for visibility capabilities. When the variety of entities involved in disruptive events was high, organizations relied on information sharing, as illustrated by the following quote:
“We were depending on an advice from the government for the continuation of our industry. Therefore, we had to wait before we were able to act upon the situation” (Organization S).
During disruptive events, the data indicated that there exists a relationship between the dependability on suppliers and the intensity of collaboration. By joint solution seeking, the sharing of knowledge between research and development departments of organisations increased visibility capabilities. Lastly, information sharing leads to increased visibility capabilities when responsible entities report on the cause of the disruptive events in the supply chain. This was stated during an interview as follows:
“[…] we asked organization X for a report on the cause of the disruption. This information enabled us how to resolve the disruption” (Organization O).
Across Event Characteristics
knowledge creation in decision-making for the postponement of production planning, increased flexibility capabilities were achieved. In addition, incentive alignment has shown that flexibility capabilities increase by sharing financial losses with supply chain partners. Most interestingly, in one case, information sharing leaded to the decision to end collaboration and switch operations to internal production. On the contrary, the findings revealed that concerning the location of the disruption, there is an increased need for velocity capabilities. The location of the disruption showed to be an indicator for organizations to engage in the sharing of resources and to collaborate with multiple suppliers. Lastly, analysing the data indicated that organizations which operating in supply chains that consist of many and different entities, require higher visibility capabilities. The data indicated that collaborative communication and sharing information during disruptive events increase visibility capabilities. In practice, this is achieved by regular communication with other entities in the supply chain on delivery statuses, governmental and industry regulations and the provision of reports on the causes of disruptions.
DISCUSSION AND CONCLUSION
In the following section, the interpretation of the results, implications for theory and practice and a critical reflection of the research are described.
Interpretation of results
The goal of this research was to answer the question: “What event characteristics of disruptions influence a firm’s decision to collaborate with other entities in the supply chain to build resilience?” At the start of this research, a framework was set out proposing a relation between event characteristics of disruptions and the need for increased resilience capabilities. What follows are the interpretations of the results.
where many suppliers, contractors or manufacturers are operative in. Furthermore, the relation between larger, diverse supply chains and the need for increased visibility capabilities is in accord with the findings of Dess & Beard (1984). Therefore, it can be concluded that organizations, involved in highly complex environments, must emphasize on the exploitation of their visibility capabilities. However, for organizations operative in knowledge sensitive industries, which are reliant on the selling of information, the extent to which information should be shared remains limited. According to Zeng et al. (2012) this is because competitive advantage must be protected by restricting the sharing of confidential information, such as intellectual property. Secondly, the severity of disruptions influenced decision-making to increase information sharing and intensify communication between entities. Coinciding with this are the findings of Craighead et al. (2007) who argued that more severe supply chain disruptions have a more far-reaching financial and operational impact.
On the contrary, the decision for switching to internal production or to use third-party transportation contractors was found to be surprising. The former reaction to disruptive events could be explained by Oh & Rhee (2008), who argue that when product uncertainty increases, unanticipated problems, including high failure of product development, may occur. This may support the decision for switching to internal production since the alignment of capabilities between organization M and the supplier showed to be unfeasible. Overall, analysing event characteristics of supply chain disruptions can support the decision-making process of firms to remain resilient in complex and uncertain environments (Li et al., 2017). Implications for theory
It must be acknowledged that this research is involved with limitations. Firstly, one of the limitations of this research is the fact that, due to time constraints, only a limited number of cases were studied. This study is focused on cross-case relationships of disruptive events in relation to building resilient supply chains in terms of flexibility, velocity and visibility. The former capabilities were well explained by the case study of Scholten & Schilder (2015). However, the organizations interviewed for this study are, based on their industry, different in nature and may therefore not validate the stipulated findings as suggested by earlier research (Seawright & Gerring, 2008).
It now appears that the more complex the environments where organizations operate in, the higher the need for visibility capabilities is required. To communicate and share information with other entities in the supply chain. However, it must be said that the sharing of information and increased communication is not universally applicable for all organizations. The reason for this is that the unmanaged sharing of sensitive organizational information may jeopardize some organizations’ competitive position.
The limitation of three event characteristics influencing decision-making has led to the need for further research. It must be acknowledged that the severity, location of a disruption and environmental complexity are just a few characteristics of the many reasons where decision makers act upon. Therefore, further research may deepen the understanding of event characteristics and its influence on decision-making in reaction to disruption management. The disruptions studied in this research consisted of transportation delays, unforeseen increasing customer demand and obstructions in production planning. It may be said, that these disruptions are not uniform and thus it is most logic that there are other types of disruptions, which require different resilience capabilities by nature. Therefore, the relationship between events of a similar nature could be investigated more thoroughly in future research.
Implications for practice
Next to theoretical implications, this study also provides valuable practical implications. First, based on linking event characteristics and flexibility, velocity and/or visibility, organizations can enhance the resilience of their supply chain. The relevance of this research for organizations is demonstrated by linking collaborative activities to overcome frequent disruptions in supply chains. To be more specific, current supply chain processes can be improved when organizations focus on building particular resilience capabilities in relation to disruptive events.
found that the sharing of information may lead detrimental outcomes in some cases when organizations are reliant on the protection of intellectual property and valuable information. Critical reflection of the research
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Appendix A – Interview protocol
Interview Protocol
1. General questions (± 10 min)
1.1. Could you give a short description about the organization (upstream and downstream)? • Core activities and/or products
• Organizational goals
• Key aspects (organization size, turnover, number of employees) • Number of suppliers (upstream) and customers (downstream)
1.2. Could you please introduce yourself and your role in the organization? • Function
• Team • Department
• Brief overview of background, education, and experience
2. Main part (± 45 min)
2.1.1 Please recall a recent disruption/problem in your supply chain. Could you outline the event in detail:
2.1.2. What was the cause, what was the impact, who was involved, was it foreseeable? ● Cause
● Impact (financial/operational) ● Affected suppliers/customers ● Indications/warnings of disruption
● In general, how did you react to and resolve this disruption?
● Was a carefully made analysis made first before responding to the disruption?
● If so: how was this analysed? Were previous disruptions taken in consideration to control the current disruption?
2.1.2. With whom did your organization cooperate to resolve the disruption? ● Why was the decision made to cooperate with these entities? ● What were the disadvantages of cooperation?
● Who initiated the cooperation? ● Did you cooperate with competitors? 2.1.3. Were these entities willing to cooperate?
● Was action undertaken immediately? Or was the situation observed initially?
● Were there limits in cooperation?
● What actions were undertaken to overcome limits in cooperation? 2.1.4. In what way did your organization cooperate with these entities?
● Sharing of information.
● Attempts to align decisions or incentives?
● What means of communications were used? (e.g. E-mail, telephone, face-to-face)
● If successes are made, such as profits, do you share these with other entities? And losses? If you are planning on carrying out entrepreneurial actions involving risks, are the risks shared with other entities?
● Does your organization look with cooperating entities what the market looks like and if there are (potential) competitors?
2.1.5. Who was responsible for decision-making during disruptions?? ● Mainly the responsibility of managers or employees? ● Why were decisions made by employees/managers?
● Were decision made from the point of view of the organization? 2.1.6. Did the cooperation change during several fases of the disruption?
• More cooperation before, during, directly after or for a longer period after the disruption?
• Why and how?
2.1. The following questions are applicable to customers and suppliers which you have acknowledged to cooperate with:
2.2.1. How would you describe the relationship between your organization and these entities in terms of trust?
● How did this influence (the intensity) of cooperation?
● Are there differences in terms of cooperation alignments between these entities?
2.2.2. How dependable is your organizations in relation to these entities? ● How did this influence the intensity of cooperation?
2.2.3. Do you cooperate till the same extent with these organizations at times when there is no disruption?
● What are the differences?
● (If so) How does this influence the reaction of other entities during disruptions?
2.2.5. (Only if suppliers are involved) How much information do you have about your suppliers? How did this influence the disruption?
2.2.6. (Only if suppliers are involved) Do you coordinate strategies with your suppliers in relation to their suppliers to prevent disruptions from occurring? Why or why not?
● Does your organization in cooperation with other entities how to collectively reduce inventory or to forecast upcoming demand?
● Were decision made from the perspective of the organization? Or mainly from the perspective of the entire supply chain?
● By whom were these decisions made? Were decisions made primarily by managers or also by employees?
• If so, why and how?
2.2. The following questions are related to your competitors (e.g. joint ventures, strategic alliances) and the organizations outside your organizations supply chain (no customers and suppliers) which you acknowledged to have cooperated with:
2.3.1. How would you describe the relationship between your organization in terms of trust?
● How did this influence (the intensity) of cooperation? ● Are there differences in cooperation between these entities?
2.3.2. How dependent is your organization in relation to these entities? ● How did this influence (the intensity) of cooperation?
2.3.3. Is the intensity of cooperation the same at times when there is no disruption within the supply chain?
● What are the differences?
● Does your organization have the same goals as these entities?
2.3.4. (Only if suppliers are involved) How much information do you receive from these entities? How did this influence the disruption?
2.3. Did cooperation help to resolve the disruption and minimize its impact? 2.3.1. Why (not)?
● Did the cooperation go well?
● Was there a reason why other organizations were not able to cooperate? ● Was cooperation time consuming (by means of distraction from internal
activities)? If so, what did you do to minimize the effects? ● What activities were most important for resolving the disruption? ● Were there things you would have done differently?
2.3.2 Does there exist a limit between cooperation? For instance, the sharing of information?
● On the basis of what is this decision made?
2.3.3. Do you think the impact of the disruption could have been minimized by cooperating less and focus on internal processes?
● Why (not)?
2.3.4. Did cooperation with other entities lead to disadvantages? If yes, how did this influence flexibility?
● Trade-offs in cooperation with other organizations ● Effect of cooperation in future disruptions
● Impact of disruption as a result of cooperation
2.3.5. Were there also cases in which your organization decided not to cooperate?
● When and with whom (for instance competitors)?
● Would this be time consuming (by means of distracting internal processes)? ● Would this make the situation more complex?
2.4 Characteristics of the disruption and how they influenced the decision-making process. 2.4.1 Did characteristics of certain disruptions influence the degree till which organizations cooperated with other organizations? If so, why this characteristic?
● Closer cooperation during certain disruptions
● Effect of earlier cooperation (information, alternatives, flexibility)
2.4.2 What characteristic of the disruption, such as external/internal cause/severity/ location, has specifically led to a different approach in cooperation?
● Exchange of more information ● More alternative in suppliers ● A higher flexibility
2.4.3 Is cooperation with other organizations being monitored? ● How often?
● By what means?
● On the basis of what aspects are decisions made?
3. Closing questions (± 5 min)
