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Mitigating supply chain disruptions – a normal accident perspective

Mitigating supply chain disruptions – a normal accident perspective Purpose – Existing supply chain literature provides examples of countermeasures that firms can adopt to mitigate abnormal or catastrophic supply chain disruptions. However, none address reducing interactive complexity prior to adopting countermeasures to mitigate everyday or normal supply chain disruptions. Most mitigation strategies focus on adding capabilities or resources to protect an organization. Here, the authors aim to consider an alternative strategy of examining current processes to determine whether processes can be simplified by using the normal accident theory and its constructs of interactive complexity and coupling as a theoretical basis. Design/methodology/approach – The authors develop a model based on the normal accident theory and use logistic regression to test their propositions in the context of a steel processing plant and its customers. Findings – The findings show the importance of reducing interactive complexity to mitigate supply chain disruptions. However, high inventory is not considered a significant countermeasure, and high inventory levels may increase the likelihood of causing a disruption downstream. These findings support the lean management approach of operating under low inventory levels while eliminating complexity to make problems more visible, causing fewer disruptions. Originality/value – While others have examined the impact of mitigation strategies conceptually, no study has captured information from actual supply chain disruptions to assess how interactive complexity and inventory levels affect disruption potential at downstream customers' facilities. Capturing information from supply chain disruptions enables managers to assess the situation as the disruption is occurring. The authors suggest a strategy in which countermeasures that increase slack in the system should be considered only after the system is sufficiently simplified to mitigate disruptions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Supply Chain Management: An International Journal Emerald Publishing

Mitigating supply chain disruptions – a normal accident perspective

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Publisher
Emerald Publishing
Copyright
Copyright © 2014 Emerald Group Publishing Limited. All rights reserved.
ISSN
1359-8546
DOI
10.1108/SCM-03-2013-0083
Publisher site
See Article on Publisher Site

Abstract

Purpose – Existing supply chain literature provides examples of countermeasures that firms can adopt to mitigate abnormal or catastrophic supply chain disruptions. However, none address reducing interactive complexity prior to adopting countermeasures to mitigate everyday or normal supply chain disruptions. Most mitigation strategies focus on adding capabilities or resources to protect an organization. Here, the authors aim to consider an alternative strategy of examining current processes to determine whether processes can be simplified by using the normal accident theory and its constructs of interactive complexity and coupling as a theoretical basis. Design/methodology/approach – The authors develop a model based on the normal accident theory and use logistic regression to test their propositions in the context of a steel processing plant and its customers. Findings – The findings show the importance of reducing interactive complexity to mitigate supply chain disruptions. However, high inventory is not considered a significant countermeasure, and high inventory levels may increase the likelihood of causing a disruption downstream. These findings support the lean management approach of operating under low inventory levels while eliminating complexity to make problems more visible, causing fewer disruptions. Originality/value – While others have examined the impact of mitigation strategies conceptually, no study has captured information from actual supply chain disruptions to assess how interactive complexity and inventory levels affect disruption potential at downstream customers' facilities. Capturing information from supply chain disruptions enables managers to assess the situation as the disruption is occurring. The authors suggest a strategy in which countermeasures that increase slack in the system should be considered only after the system is sufficiently simplified to mitigate disruptions.

Journal

Supply Chain Management: An International Journal – Emerald Publishing

Published: Mar 4, 2014

Keywords: Risk management; Supply chain disruptions; Supply‐chain management; Normal accident theory

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