The Severity of Supply Chain Disruptions: Design Characteristics and Mitigation Capabilities

TLDR

Supply chain disruptions pose significant operational and financial risks, and prior research has highlighted their costly nature and related issues such as risk, vulnerability, resilience, and continuity. The study investigates why some supply chain disruptions are more severe than others. The authors use a multiple‑method, multiple‑source empirical design to develop six propositions linking disruption severity to design characteristics (density, complexity, node criticality) and mitigation capabilities (recovery, warning). The study concludes that supply chain disruptions are unavoidable and all supply chains are inherently risky, and it challenges the effectiveness of practices such as supply base reduction, global sourcing, and sourcing from supply clusters.

Abstract

ABSTRACT Supply chain disruptions and the associated operational and financial risks represent the most pressing concern facing firms that compete in today's global marketplace. Extant research has not only confirmed the costly nature of supply chain disruptions but has also contributed relevant insights on such related issues as supply chain risks, vulnerability, resilience, and continuity. In this conceptual note, we focus on a relatively unexplored issue, asking and answering the question of how and why one supply chain disruption would be more severe than another. In doing so, we argue, de facto, that supply chain disruptions are unavoidable and, as a consequence, that all supply chains are inherently risky. Employing a multiple‐method, multiple‐source empirical research design, we derive novel insights, presented as six propositions that relate the severity of supply chain disruptions (i) to the three supply chain design characteristics of density, complexity, and node criticality and (ii) to the two supply chain mitigation capabilities of recovery and warning. These findings not only augment existing knowledge related to supply chain risk, vulnerability, resilience, and business continuity planning but also call into question the wisdom of pursuing such practices as supply base reduction, global sourcing, and sourcing from supply clusters.