State of the art, conceptual framework and simulation analysis of the ripple effect on supply chains

Abstract

Supply chains are becoming increasingly sophisticated and vital for many firms’ competetiveness. Nevertheless, their interrelated, complex and global nature also makes them more vulnerable to the risk of their operations being interrupted. This article analyzes the ripple effect on supply chains, which occurs when disruption in one node spreads throughout the supply chain and impacts its performance, design and planning parameters. This article offers a systematic review of the existing literature that covers the ripple effect in the supply chain context. It structures and classifies existing research currents and application areas in this context by presenting and analyzing the obtained results. Based on the conclusions obtained with the literature review, a conceptual framework is proposed and includes the main characteristics and perspectives of the ripple effect on supply chains, and the possible proactive and reactive measures to mitigate its effects and to recover from serious disruptions. The conceptual framework is also analyzed and validated by a system dynamics simulation model.