The role and effect of supply chain visibility in mitigating weather disruptions

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The role and effect of supply chain visibility in

mitigating weather disruptions

Name: Jelle Reede

Student number: S2766620

Master Thesis Supply Chain Management

1

st

Supervisor: Prof. dr. D.P. van Donk

2

nd

supervisor: Dr. K. Scholten

Date: 10

th

of June 2020

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Abstract

Visibility is viewed as an important strategy in supply chain resilience (SCRES). Sharing timely and valuable information helps firms in mitigating disruptions. The impact of disruptions can be influenced by the level of supply base complexity in the supply chain and the type of weather disruption. However, in existing research the joint-effects of complexity and weather disruptions have been ignored. Therefore, the research question this paper aims to answer is: How does visibility throughout the supply chain affect the impact of weather disruptions for different levels of supply chain complexity?

An exploratory in depth multiple-case study with three supply chains from the agri-food and mining industry is conducted. 9 semi-structured interviews were conducted, which afterwards were analysed via a deductive coding approach.

This research shows the benefits of visibility in mitigating weather disruptions. Visibility is enabled by high levels of information sharing and connectivity. The levels of connectivity being important, because it enhances information sharing as well as disruption mitigation. Benefits of visibility are higher for slow onset disruptions, since these occur more frequently and have higher levels of predictability. Findings show that scale complexity, geographic dispersion and delivery complexity require higher levels of visibility. Benefits of investing in visibility practices are thus higher for higher levels of supply base complexity. Here it is important that visibility beyond the first tier supplier is found to be valuable in mitigating disruptions better. On the other hand, negative effects of high level of visibility could be an increase of exposure to competitors or suppliers. Good relationships can enable companies to achieve these benefits and guard against the potential dangers.

Acknowledgements

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1. Introduction

The 2011 flooding in Thailand had large effects on the automotive industry as well as the electronic sector (Haraguchi & Lall, 2015). Because the flooding hit a dense economic area, multiple upstream suppliers were affected negatively. The effects of weather disruptions in upstream nodes are detrimental for focal firms (Xu, Wang, & Zhao, 2014). A lack of supply chain visibility created by large complex supply chains beyond the first tier suppliers, was indicated as a main cause of these effects (Kamalahmadi & Parast, 2016). Although the importance of visibility in supply chains is recognized, it is unclear exactly how much visibility is needed. Nor is there knowledge of how such levels actually effectively mitigate disruptions (Christopher & Lee, 2004; Pettit, Croxton, & Fiksel, 2019). The aim of this paper is to explore the effects of visibility and its enablers on supply chains with different levels of complexity.

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5 that an increase in supply base complexity led to a decrease of visibility within the supply chain (Bode & Wagner, 2006, 2015; Choi & Krause, 2006). Also, Birkie & Campos (2017) show that supply chain resilience (SCRES) strategies become more effective, when leveraged upon higher levels of supply base complexity. Therefore, investments in visibility can be more beneficial for high complex supply chains compared to low complex supply chains (Birkie & Campos, 2017; Jones et al., 2014; Brandon-Jones, Squire, & Rossenberg, 2015). Although the paper of Brandon-Jones et al (2014) increases the understanding of the role, visibility plays in complex supply chains, it is not understood how much or where visibility in the supply chain is needed to mitigate weather disruptions with regards to different supply chain complexities (Akkermans & Wassenhove, 2018; Bode & Macdonald, 2017; Brandon-Jones et al., 2014; Christopher & Lee, 2004). Also, while contingent conditions can affect the usefulness of visibility, it is not yet known when visibility in the supply chain is needed. This is important to understand, considering the costs that are associated with investments in enhancing visibility (Kamalahmadi & Parast, 2016). Next to a lack of in depth understanding of visibility, literature on visibility mainly consists of a narrow focus on direct buyer/supplier links (Ali et al., 2017; Bhamra, Dani, & Burnard, 2011; Brandon-Jones et al., 2014; Sá, Miguel, Brito, & Pereira, 2020; Tukamuhabwa et al., 2015). The current issue is that even though most disruptions arise from immediate suppliers, disruptions in all tiers have a large effect on firms (BCI, 2019). Extreme weather in particular can disrupt higher tier suppliers, which can create significant issues for the focal company (Dasaklis & Pappis, 2013). Therefore, a supply chain focus beyond the buyer-supplier relationship is necessary to increase the understanding of how firms can mitigate weather disruptions that transform or migrate from upstream nodes to downstream nodes (Scholten, Stevenson, & van Donk, 2019). How and if companies should aim at looking beyond the first tier suppliers for weather disruptions, can be better answered if a broader supply chain perspective is taken (Pettit et al., 2019; Sá et al., 2020). Enhancing visibility may have different benefits at different levels of complexity, as well as for different weather disruptions, yet these joint effects have been ignored in SCRES literature (Blackhurst, Craighead, Elkins, & Handfield, 2005; Brandon-Jones et al., 2014). This paper therefore aims at filling this gap by analysing how visibility plays a role in weather disruption mitigation, while taking the joint effects of weather disruptions and the level of complexity into account. Hence, the research question is:

How does visibility throughout the supply chain affect the impact of weather disruptions for different levels of supply chain complexity?

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2. Literature background

This section first explains weather disruptions and the effect on supply chains. Next, visibility is defined and the enablers are described. Subsequently, the role of visibility in mitigating disruptions is elaborated with the means of two aspects, which are identification of and responding to disruptions. Lastly, supply base complexity is defined and how it relates to disruption impact is explained.

2.1Weather disruptions

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2.2 Visibility and its antecedents

Visibility is linked to the ability of having an accurate view about information and material flows between actors in the whole supply chain (Brandon-Jones et al., 2014). It is defined as “The ability of a firm to access or share information related to the supply chain strategy or operations of supply chain partners” (Caridi, Moretto, Perego, & Tumino, 2014, P.2). Visibility in supply chains is enabled and increased by investing in information sharing activities and high levels of connectivity within the supply chain (Brandon-Jones et al., 2014; Kamalahmadi & Parast, 2016). Information sharing and the level of connectivity in the supply chain are considered as enablers of visibility in the conceptual model. Shared information should be timely and complete in order for it to have an positive effect on visibility (Brandon-Jones et al., 2014; Zhou & Benton Jr, 2007). Examples of visibility enhancing practices are sharing inventory levels, demand levels and delivery planning. High levels of information sharing create transparency in the supply chain and thus increase visibility (Barratt & Oke, 2007). Information sharing alone does not successfully create visible supply chains (Brandon-Jones et al., 2014). Visibility can also be improved when multiple actors in the supply chain are connected and closely collaborating (Kamalahmadi & Parast, 2016). Relational linkages between firms enhance visibility (Rungtusanatham, Salvador, Forza, & Choi, 2003). By creating good relationships between suppliers, the willingness to share meaningful and useful information is increased, which in turn increases the visibility of the chain (Barratt & Oke, 2007). Interdependencies in the chain play an important role in relations between suppliers and thus also visibility (Barratt & Oke, 2007; Rungtusanatham et al., 2003). Highly interdependent firms are more likely to commit into more information sharing and collaboration than lowly interdependent firms (Wieland & Wallenburg, 2013). This might also explain why Sá et al (2020) find that supply chains with low interdependencies do not yet fully implement information sharing activities to address future uncertainties regarding risks. The reliability and impact of the shared information on visibility relies also on an effective delivery between actors (Cao & Zhang, 2011). This can be more effective when firms make use of integrated systems, which are relation-specific assets that increase the speed of transferring information (Wieland & Wallenburg, 2013). Examples of integrated systems are collaborative IT infrastructure like vendor managed inventory, collaborative planning, forecasting and replenishment (Barratt & Oke, 2007).

2.3 Effects of visibility

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9 study of Blackhurst et al (2011), where all firms mention a need for more visibility in the supply chain. Visibility does not only improve the performance of the supply chain by increasing operational efficiency and better forecasting (Caridi, Crippa, Perego, Sianesi, & Tumino, 2010), but also increases the ability to mitigate disruption effects through enhancing supply chain resilience (Brandon-Jones et al., 2014). The next two subsections will describe the effects of visibility on disruptions mitigation in facilitating disruption identification and improving responses.

2.3.1 Enabling weather disruption identification

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2.3.2 Enabling better responses

Visibility can be a driver of agility when it enhances the firm’s ability to respond to disruptions fast (Wieland & Wallenburg, 2013). In times of disruptions, decisions need to be made fast, while the difficulty of decision making increases (Ruel, Shaaban, & Ducros, 2019). Making effective decisions during disruptions is more difficult, since more information needs to be gathered, interpreted and processed when firms face the uncertainty of disruptions (Brandon-Jones et al., 2015). Visibility can enhance decision making by increasing the reliability and fullness of the available information and thus enables managers to respond to disruptions in a timely manner (Jüttner & Maklan, 2011). Furthermore, visibility in supply chains may also help effectively allocate resources to cope with the disruption (Akkermans & Wassenhove, 2018). Redundancy, which is seen as having multiple suppliers, safety stock, over capacity or back-up suppliers, is a costly strategy, when not implemented at the right place (Kamalahmadi & Parast, 2016; Xu et al., 2014). Transparent supply chains may enable firms to understand where vulnerabilities of the chain are and where redundant inventory is needed (Xu et al., 2014). Also, flexibility responses like changing supplier or ways of transport can be more effectively made, when the risk of the supply chain is visible (Saenz & Revilla, 2014). Cisco for example created a resilient supply chain by increasing the visibility of the whole chain (Saenz & Revilla, 2014). Because of this visibility Cisco was able to build-in and implement the right strategies to cope with their disruption (Saenz & Revilla, 2014). By mapping out the key nodes of the chain for example, vulnerable nodes where detected and second sourcing options or alternative site locations where implemented accordingly (Saenz & Revilla, 2014). In other words, visibility may enhance the effective implementation of other strategies (Brandon-Jones et al., 2014). Additionally, when visibility is absent in the supply chain, managers have to make decisions blindly which increases the risk for the supply chain (Blackhurst et al., 2011). There is too little scientific evidence available to understand how visibility improves the effectiveness of other SCRES strategies. Therefore, this paper adds more insights into this discussion.

2.4 Supply chain complexity

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11 2015). Second, the delivery complexity increases supply chain complexity. Unreliable suppliers or long delivery times increase the necessity of using more demand data as well as increasing planning horizons in working or collaborating with these suppliers (Chen, Drezner, Ryan, & Simchi-Levi, 2000; Simangunsong, Hendry, & Stevenson, 2012). Third, differentiation of suppliers in the supply base increases complexity by making it more difficult to cooperate with suppliers if these are more diverse (Choi & Krause, 2006). Suppliers can differ in for example size, technical capabilities or operational practice, which require different ways of doing business (Choi & Krause, 2006). , Scale complexity in the supply base is linked to the number of suppliers, with whom the focal firm is doing business (Choi & Krause, 2006). Complexity increases, because focal companies need to manage more information flows, physical flows and relationships, when the number of suppliers increases (Bozarth, Warsing, Flynn, & Flynn, 2009).

2.4.1 Relation to the impact of disruptions

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2.5 Research framework

Figure 1 shows the research framework of the relationships between visibility complexity and the impact of weather disruptions. Visibility, which is enabled by information sharing and connectivity, is expected to negatively moderate the impact of weather disruptions. The most critical impacts of weather disruptions are the disruption at upstream suppliers production or delivery. The impact on focal companies can be delays of delivery, availability problems and price increases of products (Oehmen, Ziegenbein, Alard, & Schönsleben, 2009). Impact of disruptions can be mitigated, because visibility improves identification of and responses to disruptions, which is also emphasised by other researches (Brandon-Jones et al., 2014). The independent variable weather disruptions is determined by the following four characteristics: speed of onset, the duration of the disruption, the predictability and cyclicity (Glade & Alexander, 2013). It is believed that visibility mitigates disruptions better when weather disruptions are more predictable. For example, when a supply chain is visible, firms might be able to detect upcoming disruptions better when weather forecasts are more accurate. The moderation effect of complexity can be explained by the expectation that visibility achieves better effects when a supply chain is complex. High complex supply chains increase both the severity and frequency of disruptions (Craighead et al., 2007). Hence, the need for visibility can be higher in complex supply chain. Due to the fact that the effect of visibility on the impact of disruptions is not yet empirically explored at the supply chain level, this research stays open to new interpretations and hopes to gain more insight on how visibility mitigates the disruption impacts under different levels of supply chain complexity.

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3. Methodology

3.1 Research design/method

This research aims to provide more clarification on the role of visibility in mitigating disruptions. With the specific focus on how visibility relates to the mitigation of different types of weather disruptions in different levels of supply chain complexities. The research question this paper aims to answer is: How does visibility throughout the supply chain affect the impact of weather disruptions for different levels of supply chain complexity?

In order to increase the understanding of the role visibility in different supply chains, a multiple-case study is suited. By conducting a multiple-case study, the effects of visibility can be studied and compared in different contexts. The multiple-cases provide comparisons between different cases and thus more generalizable conclusions as well as improved external validity (Eisenhardt, 1989). Additionally, understanding the phenomenon of visibility and cascading effects in supply chains is complex, since many contingencies can affect the relationship (Scheibe & Blackhurst, 2018). Therefore, in this research a case study is most suited to investigate this complex relationship in an explorative setting (Karlsson, 2016). A deductive case study approach will be performed with the purpose of understanding how visibility can help in mitigating weather disruptions on a supply chain level.

3.2 Case selection

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14 implement SCRES strategies such as visibility. Furthermore, it is important to see whether visibility has any value in agri-food industry where connectivity is low (Sá et al., 2020). To strengthen the results a logistical provider from a large port is interviewed to retrieve insights from the logistical operations. Each case in this research has to deal with logistics, which to a certain extent plays a role in the level of visibility in the supply chain. Also, additional data from a supply chain consultant is retrieved to consolidate findings and enables triangulation of the data (Karlsson, 2016). This also improves internal validity and reliability of the research. Concluding, the 3 cases in the 2 industries will provide a valid sample to analyse the effects of visibility beyond the buyer/supplier relationship (Brandon-Jones et al., 2014).

Case Scale complexity Supplier differentiation

Geographic location Complexity level

Supply chain A: mining industry

Low Low Europe Low

Supply chain B: agri-food industry

High High World High

Supply chain C: agrifood industry

Low Low Europe Low

Table 1: Case details

3.3 Data collection

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Research protocol explained

The research protocol can be found in appendix A. The protocol itself is aimed at the perception of the interviewees and does not involve difficult theoretical terminology. This is done to make sure the interviewee fully understands the questions. Furthermore, the protocol and additional information are send to the interviewees, so they can prepare the questions beforehand. This decreases the likelihood that the interviewees encounter unexpected questions. Questions are based on previous researches on similar subjects and combined into this research protocol (Barratt & Oke, 2007; Sá et al., 2020; Scheibe & Blackhurst, 2018). Prior to recording, permission is asked to the interviewee.

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Case

Complexity

level of SC

Company’s role

Position of the

interviewee

Length of

interview

A. Mining

industry

A1. Focal firm Procurement manager 58:33 Low A2. Focal firm Portfolio manager Supply &

Trading

33:18 A3. Supplier tier 1 Business coordination

specialist

59:31

B. Food

industry

B1. Focal firm Supply chain development manager

1:01:41 High B2. Focal firm Purchasing & logistics

manager

Mail contact B3. Supply chain

consultant

Supply chain consultant 1:27:47 B4. Supplier tier 2 Supply chain manager 59:10

C. Food

industry

Low C1. Focal firm Supply chain manager 60 min

-

- D1. Seaport -

transhipment

Inland logistics manager 59:19

-

- D2. Supply chain

Consultant

Senior advisor supply chains 40:26

Table 2: Data collection

3.4 Data analysis

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Supply chain Supply chain A mining industry

Supply chain B agri-food industry

Supply chain C agri-food industry Scale complexity "The market is not that

large in terms of suppliers, we mainly do business with one large supplier and a few small suppliers"

"Many farmers send their crops to a factory that in turn ships the products to a bio

"Production of the product is outsourced and

ingredients are shipped directly towards the Factory"

Delivery complexity "One of the main reasons we do busines with the supplier is the level of flexibility they provide"

"The biggest issues we have are sometimes production issues at the factory"

"We have a long term relationship with the supplier, which often goes well, but we had one big issue in the past"

Supplier differentiation "We mainly do business with large suppliers, because we need large quantities"

"Different ingredients come from different regions, which have different suppliers"

"We get are resources from multiple suppliers"

Geographic dispersion "99% of our materials comes from within Europe" "The limsestone is a business that I would call a short distance based business"

"Our suppliers are located in various parts of Asia"

"99% of our products come from within Europe"

Complexity level Low High Low

Table 3: Quote examples of complexity per case

Complexity element Supply chain A mining industry

Supply chain B agri-food industry

Supply chain C agri-food industry Scale complexity Low High Low

Delivery complexity Low Medium Low

Supplier differentiation Low High Medium

Geographic dispersion Low High Medium

Complexity level Low High Low

Table 4: Level of complexity per case

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18 is performed. This shows the main similarities and differences of the effects of visibility. The cross-case analysis is performed between the three cases and between the industry This is only possible for the food industry, because the mining industry is analysed by one supply chain

Visibility enhancing practices Supply chain A mining industry Supply chain B agri-food industry Supply chain C agri-food industry Information sharing content

"We mainly share forecasts with the suppliers" "I try to stay informed by following new developments" "When something is wrong our procurement department is notified on time"

Forecasting, Product specifications. Knowledge on climate adaptation or new harvesting methods

"We don't share a lot of information. It mainly consists of forecasting"

Information sharing frequency

"At the start of the month we give a forecast of the required deliveries" "every 6 months, there is a face to face meeting with the supplier" "Every day the amount of needed trains is communicated"

"A few times a year I go into the field and do a check with the upstream suppliers.

"Every week, we send the forecast of the upcoming week"

Connectivity "It's really important to have a really close relationship with your clients. Why, first of all, because planning is important" "During those meetings we discuss the good and bad encounters we had the previous 6 months and how we should continue"

"We have local consultants that provide guidance to the farmers on how to efficiently harvest products"

"The supplier takes care of our production"

Transparency "It is difficult to have full visibility on the supplier, but we do know how the market evolves and this is also shared with us from our supplier"

"Because we closely collaborate with farmers, the supply chain is visible"

"You always have to be active in getting information, this is not shared a lot"

Information sharing with indirect supplier

"We have trust in the ability of our supplier"

"Every farmer group has a team that controls the farmer, but also helps when there are issues"

"Because they to the whole production process, we don't share information beyond the first supplier"

Monitoring "We monitor the water level, because that has a large influence on us.

"We don't monitor the weather, because we expect them to do that. But, we do monitor the supplier"

"Monitoring is not done, because we cannot speed up the process"

Level of visibility Medium High Low

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19 Visibility enhancing practices Supply chain A mining industry Supply chain B agri-food industry Supply chain C agri-food industry Information sharing content

Low High Low

Information sharing frequency

Medium High Low

Connectivity Medium High Low

Transparency Low High Low

Information sharing with indirect supplier

Low High Low

Monitoring Low Medium Low

Level of visibility Medium High Low

Table 6: Level of visibility per case

4. Results

This results section describes how visibility plays a role in each supply chain. The level of visibility per supply chain is shown in table 6. First the types of weather disruptions that affect each supply chain is shortly explained. Then the effects of visibility in the supply chain is described. Interesting findings for these cases were for example the significant effect of relationship on visibility. For each supply chain, a conclusion is given to how visibility plays a role in mitigating disruptions. Next to the case findings, the findings of the port and consultant are used to strengthen results. In table 6 there is a short overview of the position of the cases in their respectively supply chain.

Supply chain Interviewee Position

Mining industry A

A1 Focal firm

A2 Focal firm

A3 Tier 1 supplier

Agri-food supply chain B B1 Focal firm

B2 Focal firm

B3 Tier 1 supplier

B4 Tier 2 supplier

Agri-food supply chain C C1 Focal firm

Seaport D1 Seaport - transhipment

Consultancy D2 Supply chain consultant

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4.1 Case A: Mining industry

Weather disruptions

The industry itself is rather robust, which also shows in the experience each case has with weather disruptions. Abrupt weather disruptions like hurricanes or earthquakes tend not to happen in Europe where the supplier A3 mainly operates. Issues mainly occur when transportation is affected. Abrupt disruptions like a storm disrupt the port and transportation in this case were shut down, and ships at sea miss their planned time windows. However, the duration of this disruption is often short according to interviewee D1: “Storms do not occur often and most often do not last for a longer period of time, which decreases the impact it has”. While storms don’t occur often, rain does have an effect. This is mostly happening during transport, where it can have a big impact on the supply chain. A2: ”When it rains for several days, we cannot unload our products” and A3: ”We had a client who needed really dry products, but because it can rain a lot we had to find solutions”. While the duration of rain is often short, predictable, it can disrupt the supply chain often in raining seasons. Slow-onset disruptions on the other hand tend to disrupt this industry more often. Long periods of droughts also affect the supply chain negatively. Products in the mining industry have low value and are transported in large quantities. Interviewee A1: ”Last summer the water level was very low, which decreased the capacity of the barges. Therefore more ships were needed to transport the same amount of goods”. Another finding is that weather disruptions do not only have a direct effect on processes, but also have an indirect effect on the supply chain via demand distortions. Interviewee A1: ”When the weather is good, our factories need to produce less, which in turn requires less resources. This shows the need for a flexible supplier”.

Effects of visibility

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21 by the supplier A3: “If you don’t have good communication with your client, it is difficult to make them understand the problems that you might face”. Key informants further more stress that the level of connectivity in the supply chain is important. High levels of connectivity in the supply chain can lead to faster sharing of issues. This is mainly shown in the relationship the supplier A3 has with the logistic provider. Interviewee A3: “We have a really good relationship with our transporters so we know things quite quickly. Also the transporter world is a small world, a lot of people know each other very well”. This shows that connectivity improves disruption mitigation as well. This level of connectivity is also clearly seen in how the firms use visibility in addressing vulnerabilities in the supply chain. Interviewee A3: “We share information, but not to the same extent. This depends on the criticality of the product”, and A3: “If there is a critical customer and we stop supplying, they have to stop their production line, which is very costly and you never want that in general”. Interviewee A1: “We communicate closely and pay attention to this, because it is important. If we don’t have the supply, we cannot produce any power”. Thereby showing that visibility in supply chain A is needed when resources are critical and thus have a large impact when disrupted. This is also the main reason Interviewee A3 monitors the water level of the river, because the highest costs of the product comes from transportation.

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4.2 Case B Food industry

Weather disruptions

Supply chain B is more vulnerable to weather disruptions, because suppliers are located in countries where extreme weather disrupts suppliers more frequently. The supply chain is most disrupted by periods of droughts as well as heavy rains. Interviewee B1: “The drought in Sri Lanka lasted for almost a year and a half. Because of this drought the size of the coconuts decreased. Therefore, more coconuts were needed for the coco milk. This led to an increase of price and created issues for us”. The impact of these disruptions is a reduction in quantity and quality of the products. In the worst case, whole harvests are destroyed. Shortages can happen and prices often increase when a disruption hit. Interviewee B1: “The consequences can be lower quantities or failed harvests, which are caused by droughts or excessive rain”. Although abrupt disruption can happen, these often do not affect the supply chain as hard as slower onset disruptions. This is mainly the case, because the abrupt disruptions tend to be local and of short duration. Also the supply chain is not yet disrupted by sudden-onset disruption. Droughts as in Sri Lanka on the other hand, had a long duration, which effected the farmers more. According to interviewee A1, the main issue is: “Short term forecasts are accurate, but on the long term this is still difficult”. Weather in this supply chain can also disrupt logistical operations. Interviewee D1: “A beaufort of 8 means that we cannot unload containers anymore”. This does lead to small delays, because the duration of the disruptions is often short.

Role of visibility

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23 Next to information sharing, connectivity in the supply chain is an important factor in the level of visibility in this chain. Interviewee B3: “Each player must know where the products are going to and coming from. The more integrated a supply chain, the better”. Product flows become more visible when a supply chain is connected. This can increase the knowledge a manager needs when disruptions occur. Interviewee B3: “When a supply chain is integrated, I think the supply chain is better able to cope with disruptions. Integration increases sharing information, which in turn helps during disruptions”. Good examples are the speed of detecting disruptions in this supply chain. When disruptions occur, the focal company tend to quickly get information on the disruption. Interviewee B1: “It goes rather fast via the local consultant. Also I go to the fields in Thailand quite regularly. Through communication and the field visits we know what is currently playing. That is also important, because it can have consequences on the price level”. Moreover, While the supply chain is complex, high levels of visibility are enabled by good relationships in the supply chain. Interviewee B1: “I work together for 20 years with a consultant in Thailand. We know exactly how we can be valuable for each other. She makes reports of the situation on the ground and thereafter we discuss progress with the farmers face to face”. The opinion that relationships are important is also shared by interviewee B3: “Upstream and downstream relationships need to be strengthened in order to have better visibility in the chain”.

This is also needed, because the weather can change. Forecasts are accurate, but not on the long term level. Interviewee B1: “Weather patterns and climate change is changing constantly. Sometimes it starts raining for a week, when it is expected to have a dry period” and interviewee B3: “We know the weather conditions three to four or five days in advance, so he can make small adjustments with the harvests during those days”. This shows that short term weather disruptions on farmers are difficult to mitigate, but knowing what the effects of the disruptions are and on which area they take place, can give the focal company a better chance in mitigating the disruptions.

4.3 Case C Food supply chain

Weather disruptions

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24 Role of visibility

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4.4 Effects of visibility per case

Table 7 shows a summary of the main effects of visibility per case. Some effects are mentioned multiple times, which is shown by the number between the brackets.

Effects of visibility

Supply chain A Supply chain B Supply chain C

Disruption identification

Disruptions get bigger without information sharing

(2x) Integration lead to faster detection Increase understanding of

the location of the disruption Improves detection of issues Improving responses (3x) Without information disruptions cannot be handled

well Speed is important

(2x) Information sharing improves the ability to

take the right steps Improves the speed of

making decisions

Information is needed for timely reactions

Improving SCRES strategies

Adjusting inventory and safety stock

Improve flexibility by better supplier selection Effective allocate safety

stock

Flexible responses are more effective

Identifying vulnerabilities

assessing the capacity level of suppliers

Information sharing improves when product is critical

(2x) Transparency makes the supply chain stronger by understanding viewing weaknesses and threats in

the supply chain

Improves risk assessment of resources. Improve visibility on the

situation Preparedness (2x) Contingency plans are

more effective

(2x) Preparing for the worst case scenario by

learning

Adjusting supplier location to level of

vulnerability Relationships Improve information sharing

and planning

Long lasting relationships create visibility and improve responses by faster information sharing

(3x) Relationships are needed for high levels of

visibility

Close relationships enable faster disruption detection

Monitoring Better risk assessment Not needed when supplier is reliable. Supplier takes care of

the disruption Monitor what is known to have an impact on operation

(2x) Weather forecasts are not accurate, when these

are accurate, supply chains will be less

disrupted

Monitoring upstream suppliers increase the speed of detecting price

changes

Negative effects Competitive environment create risks

It cost time and money to implement visibility

Firms need to actively seek visibility

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4.5 Cross-case analysis:

In all the cases in this research visibility is observed as a key factor in mitigating weather disruptions. Furthermore, both the food industry and the mining industry show that visibility improves disruption identification and responses. Identification is enhanced by having an understanding of the current situation in the supply chain .Interviewee D2: “Information sharing is key. You are able to keep track of everything and take everything into account. So, I think now people can react to those disruptions faster”. Besides detecting disruptions faster, results also show that responses to disruptions can improve when the supply chain is visible. Interviewee D2: “when the disruption is happening, information sharing can help in defining the right counter actions”. Case A can adjust their inventory more effectively when disruptions are detected, while case C is able to implement changes on procurement when information on the disruption is obtained on time. These changes can for example be the use of substitute products, when other ingredients are disrupted. Speed of information sharing is very important in responding to weather disruptions. Interviewee D1: “The earlier you share information, the faster alternatives can be proposed”.

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27 cope with disruptions”. This enables the firm to detect weather disruptions starting at upstream suppliers. The need for visibility beyond the first tier supplier is not shown in the cases A and C with low levels of complexity. However, the importance of information sharing beyond first tier suppliers is emphasized by Interviewee A3: “When information is not shared, you keep on producing and producing. Than you have a huge stock that might block productions for the next product, if you are not able to evacuate that stock”. This does show that visibility in the supply chain does not only concern the focal company, but also suppliers. Results furthermore show that the complexity element delivery complexity is important for the necessity of visibility in that supply chain. It is observed that high the reliability level of supplier A decrease the need for visibility of the focal firm. This is explained by the presence of a certain trust in the ability of the supplier to handle disruptions. Also, past experiences have shown they were capable in doing so. Contrasting results are shown supply chain B, where the firm requires visibility on its upstream suppliers. Case B is characterized with high levels of scale complexity, creating large risks if not managed properly, while supply chain A has one large supplier, who is reliable.

Enabling of visibility

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5. Discussion:

The main goal of this study was to explain how visibility plays a role in mitigating weather disruptions. According to Brandon-Jones et al (2014 & 2015) & Bode et al (2015), Supply base complexity influences the frequency and impact of supply chain disruptions. A higher level of visibility mitigates disruptions, by increasing the chance of identifying the disruption and improving the ability to respond (Kamalahmadi & Parast, 2016). The results show that visibility helps in mitigating weather disruptions. Complexity of the supply base does have an effect on the need for visibility. The following discussion consists of three sections. First, the role of visibility in identifying weather disruptions is discussed. Second, the moderating effect of complexity is shown. Thereafter, the effects of visibility in improving SCRES strategies and the value visibility has throughout the supply chain is explained. Lastly, findings of the risks of visibility in supply chains are discussed.

5.1 Visibility for identifying weather disruptions

The findings in the case show support for the positive effect visibility has on weather disruption mitigation. The effect of visibility in this research show differences for different types of weather disruptions. The main difference is observed between sudden onset and slow unset disruptions. While the impact of sudden onset disruptions is high, the lack of predictability and low frequency of occurrence decrease the perceived benefits of visibility. However, it should be noted that while detecting is proven to be more difficult, responses to the abrupt disruptions are improved, when visibility is enhanced. The results of this study show that visibility is more beneficial in mitigating slower onset disruptions and predictable weather disruptions. This can also explained by the fact that the highest impact of disruptions comes from slower onset but more frequently occurring weather disruptions (Stecke & Kumar, 2009). Hence, making it more effective to mitigate against. The duration the extreme weather creates the highest impact on supply chains. For example, the drought in Sri Lanka had a duration of one and a half year, which created significant impacts on the upstream suppliers of the food industry. Similarly, droughts in Europe created issues for logistical costs in the mining industry. This shows that the impact of weather disruptions is dependent on both the nature of the weather disruption and the structure of the firm. This is in line with the findings of Scheibe and Blackhurst (2018), who determine that the level propagation of disruptions is determined by both the nature of the disruption and the structure of the supply chain.

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30 vulnerability, because the disruption can flow through more players in the supply chain. Hence making it more difficult to assess where the disruption has an impact (Blackhurst et al., 2018) and increasing the need to mitigate the impact in complex supply chains (Craighead et al., 2007). The element reliability in this research is positively related to the need of visibility. When suppliers are reliable and handle disruptions in a good way, marginal benefits of extra investments of visibility might not improve mitigation (Brandon-Jones et al., 2014). In contrast with Brandon-Jones et al (2015), this research shows significant results about the relationship of geographical dispersion and the level of required visibility. Supply chains that have upstream suppliers located at weather prone areas, which is often seen in the food industry (Stone & Rahimifard, 2018), are more vulnerable for weather disruptions. However, it needs to be noted that while this result is contradicting with findings of Brandon-Jones et al (2015), the boundaries of this finding are related to the context of weather disruptions are not valid for all disruption types. These structure dependent relationships also explain the low level of needed visibility in the mining industry, where the supplier is reliable and located in Europe. Besides more accurate weather forecasts, extreme weather occurs less often in Europe compared to Asian countries (FAO, 2017). Moreover, the less complex supply chains tend to be more visible and able to mitigate disruptions by default (Choi & Krause, 2006). Therefore, this study shows the importance of visibility in mitigating weather disruptions under different levels of scale complexity, delivery complexity and geographic dispersion. While non contingent effects on supplier differentiation are found, which might be explained by the presence of a portfolio effect. An explorative paper of Durach et al (2018) states that the supply chain complexity positively relates to inter organizational responsiveness. During disruptions, firms are therefore better able to diversify the resources and choose between a number of possible configurations when complexity is high (Birkie & Campos, 2017).

5.2 Visibility improves SCRES responses

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31 improving SCRES strategies. This study therefore increase the understanding of synergies between different SCRES strategies (Kamalahmadi & Parast, 2016).

5.3 Visibility throughout the supply chain

By taking a supply chain focus, The findings of case B show that visibility beyond the first tier supplier enables the firm to improve mitigation. This is needed considering that without visibility, issues are only noticed when it is too late. This is in line with the findings of Blackhurst et al (2011), who determine that firms need visibility in order to respond. In the food industry, visibility beyond the first tier supplier enables firms to know where weather disruptions start and which upstream suppliers are hit by this weather disruption. The findings show that the speed and the level of reliability of sharing information is enabled by the level of connectivity in the supply chain. Long lasting relationships integrate the supply chain and thus make it easier to communicate issues to suppliers or customers. This is in line with the findings of Wieland & Wallenburg (2013), where integrations lead to more resilient supply chains. Besides faster communication, connected supply chains have a better view on the current situation of each node in the supply chain. This also adds value to the finding of Sà et al (2020), who show that upstream suppliers with no visibility, information or support implement individual solutions, which might have a negative effect on disruption mitigation. This research shows that when upstream suppliers in the agri-food industry do have visibility, it improves responses to weather disruptions. While most research is on the benefits of visibility of upstream suppliers, this research also shows that visibility of downstream customers increases the possibility of mitigating disruptions. Supply chain A is able to stop production on time, when disruptions at downstream nodes are openly communicated to upstream nodes, preventing unnecessary accumulation of stocks or production failures. This shows that visibility mitigates disruptions better when implemented both at upstream as well as downstream nodes.

5.4 Risks of visibility

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6. Conclusion

By exploring the role of visibility in mitigating weather disruptions, interesting findings are observed. Visibility in the supply chain is more beneficial for mitigating slow-onset weather disruptions compared to abrupt weather disruptions. The findings furthermore show that the level of complexity exacerbates the impact of weather disruptions. Contingent effects of visibility are found in the level of scale complexity, delivery complexity and geographical dispersion. Therefore visibility is more valuable in high complex supply chains.

Visibility is enabled by both information sharing and the level of connectivity, which is in line with previous studies (Brandon-Jones et al., 2014; Jüttner & Maklan, 2011). An aspect found to be important in specifically complex supply chains is the relationship between partners. Good relationships increase the level of integration and thus increase the timeliness and reliability of the shared information. Which have a positive effect on disruptions mitigation.

Visibility throughout the supply chain enables better disruption mitigation through the following actions. First, visibility helps in identifying disruptions at upstream supplier. Without visibility firms are taken by surprise when extreme weather disrupts the supply chain (Blackhurst et al., 2018). Second, through fast detection of disruptions, responses can be made quicker. Faster detection and responses mitigate the impact of disruptions. The findings also show that SCRES strategies to mitigate disruptions are more effective when the supply chain is more visible. Adjusting inventory on time, implement substitutes or choose new suppliers are for example more effective when the firm has visibility in the supply chain. This provides additional insights in the synergies between SCRES strategies (Tukamuhabwa et al., 2015)

Finally, there are can be negative effects involved when implementing visibility in a competitive environment. Opportunistic behaviour of the supply chain partner or competitor being the biggest threat. The findings of this research increase the empirical understanding of how visibility throughout the supply chain mitigate weather disruptions by taking the level of complexity into account. Thereby increasing the understanding of the benefits of visibility as a SCRES strategy.

6.1 Managerial implications

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33 on their supply chain. This enables managers to assess vulnerabilities and threats in the supply chain. Thereby preventing ineffective responses, such as inefficiently allocating safety stock or blind decision making (Blackhurst et al., 2011). By taking the supply chain view, insights of this study highlight the importance of visibility beyond first tier suppliers. While the benefits investing in visibility are clearly shown in both theoretically and empirically research, managers should also take risks related to high levels of transparency into account. Opportunistic behaviour of the supplier or counterparty risks can have negative consequences for firms (Scheibe & Blackhurst, 2018). However, this research shows that good relationships can guard against the risks of visibility.

6.2 Limitations and Future research

While this paper shows valuable findings for theory and practice, there are some limitations. First of all, this research was constrained by the amount of respondents in case C. Increasing respondents on supply chain C can provide more in depth answers on the effects of visibility. Moreover, there were some issues during data collection of the mining industry that originated from the corona virus. Which made it more difficult to include more cases in the mining industry. The mining industry was therefore underrepresented compared to the food industry. Additionally, this research was limited to the levels of complexity in cases A, B and C. Future research can aim to increase both the amount of cases and include cases which have higher levels of complexity, such as the electronics industry. Since higher levels of complexity relate to lower levels of visibility, the relationship can only be fully understood when higher levels of complexity are investigated (Choi & Krause, 2006).

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Appendix A: Research protocol

Interview Questions:

Ask permission for recording - [yes/no]

Assure anonymity/data will be used for research only Introduction of the research subject

1. Can you give a short overview of the supply chain for a product of choice? a. Structure?

b. Amount of downstream buyers? c. geographic location?

d. flow of products?

2. Can you describe your relationship with your suppliers? a. What is the reason for these relationships? b. What tiers are these suppliers?

c. Do you collaborate, and how and why? d. Do you exchange information?

e. How do you share this information?

3. Can you explain what the role of a seaport in your supply chain is?

a. Have you ever experienced disruptions in the seaport or received warnings about potential problems? What did you do?

b. What would you do if the seaport shuts down for a day/week/month? c. Are you dependent on 1 seaport (for certain goods/parts)?

d. Do you receive/share information or collaborate with the seaport? What is the reason for sharing this information/collaboration?

4. Can you tell us about past experiences how the weather has impacts your supply chain, for example a good and a bad experience?

a. What happened? b. At which tier?

c. Were there cascading effects?

d. When did you perceive this disruption?

e. Did you receive information on the disruption? when and from who? f. How did you respond to this disruption?

g. What were the consequences of this specific disruption to your whole supply chain? h. Have you ever experienced that an ingredient was disrupted, which you did not focus

on? (for example because you never expected it to be hit by a disruption)

5. What do you do to mitigate weather risks in the supply chain?

a. How does your supply chain quickly react to the implications of extreme weather? b. Climate change

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35 6. SCENARIO: scenario x related to the interviewee

An abrupt weather disruption hits an area where products of riedel are produced. Due to the effects of this disruption, you are not able to supply [product] for two weeks. Can you explain in steps how this disruption would have an effect on your supply chain?

Long periods of adverse weather hits the region, where you suppliers are located. Due to these droughts, productivity of the plantation will expectedly decline for multiple years. Therefore you cannot deliver the demanded limestone. Can you explain in steps how this disruption has an effect on your supply chain?

a. If there are cascade effects, could you please explain them?

b. Can you explain how such disruptions are detected in the supply chain?

c. Can you explain how you monitor events such as this scenario? How reliable is the information available today? Can you tell us about your source of information about weather conditions?

d. Once a disruption is discovered, how do you know what the effects on the supply chain are?

e. Do you think you currently have enough information in the supply chain to choose the most suited strategy if this disruption would occur?

f. Can you explain the steps your company takes in preventing this disruption from affecting your supply chain?

g. How would your company respond?

h. How would the response be different if the disruption started at a higher tier supplier? i. How would you collaborate with suppliers if this disruption occurs?

j. How are you able to switch to alternative suppliers in your supply chain in case your main supplier cannot deliver?

k. How would you describe the role of the seaport in this scenario? i. What would the ideal role of the seaport be in this scenario?

7. How does information sharing and coordination affect your ability to handle a supply chain disruption?

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Appendix B: Excerpt coding tree

Quote Open coding Axial coding Dimension

"Usually, we don't go much further than 300 kilometers for classic products, when

I say classic products is lime, basic lime"

Short distance supply Geographic dispersion Complexity

"We try to keep the supply chain as short as possible, because short supply chains are better able to cope with disruptions"

Decrease supply chain

length Supply chain length Complexity

"Usually it never happens that the whole harvest is gone. Usually it happens that the harvest quality goes down, or maybe

the quantity goes down"

Quality and quantity

decrease Disruption impact Disruption impact

"When there are real issues, this is most often located at the factory and not the

farmers"

Disruption location Disruption impact Disruption impact

"We have a really good relationship with our transporters so we know things quite

quickly"

Relationships /

communication Connectivity Visibility

"Because we know we are dependent on each other, we share more information"

Relationship dependency and information sharing

Connectivity Visibility

"For 20 years we have worked together. We know exactly how valuable we are for

eachother"

Long relationship Connectivity Visibility

"The weather forecast are more accurate Nowadays, and based on historical data

you know much more what the effects could be"

Detailed weather

forecasts Forecasting accuracy Visibility

"Looking at the weather forecast for example, they can put it in the system and

it will directly update the expectations"

Detailed information on

disruptions Forecasting accuracy Visibility

"So the more interactive and integrated the supply chain would be, the next guy would know what's happening with me.

So the guy after him knows what's happening with him. the two ends may

not know"

Visibility in direct and

indirect links Indirect supplier Visibility

"Information sharing is critical if you don't have information that cannot handle

any kind of disruption correctly"

Importance of

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37 I think information sharing is really

important in the supply chain also helps to enable all of this, supply chain disruption, maybe not to solve it but to act

in the right way

Information sharing

during disruptions Information sharing Visibility

"The faster you share information, the faster alternative options can be choosen.

This helps in seeing het disruption coming"

Speed of information sharing

Information sharing /

disruption identification Visibility

"It's not always the supplier that has information but rather the logistic

provider"

Limited visibility during

shipment Limited visibility Visibility "We are careful with sharing to much

information. We do business in a competitive environment"

Negative effect of

Sharing information Negative effect visibility Visibility

"We don't want to give away our current position, this makes us vulnerable to

competitors or suppliers actions"

Negative effect of

sharing information Negative effect visibility Visibility

"When we notice something is about to happen, we can adjust our inventory"

Flexible storage capacity during

disruptions

SCRES strategies Visibility

"For important disruptions where we know we won’t be able to supply, we inform the client and deliver them from

another plant of our network"

Flexibility /

Communication SCRES strategies Visibility

"Because the supplier is large, you can never have full visibility"

Relationship visibility

and size Size Visibility

"If you want to improve the strength of a chain, it starts with transparency"

Transparency increases

supply chain strength Transparency Visibility "Because we closely collaborate with our

farmers, we create a lot of transparency"

Transparency in shorter

supply chains Transparency Visibility

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38

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The role and effect of supply chain visibility in mitigating weather disruptions