M. Johnny Rungtusanatham

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

Supply chain disruptions and the associated operational and financial risks represent the most pressing concern facing firms that compete in todays 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.

Simultaneous configuration of platform products and manufacturing supply chains

The product platform concept represents a powerful approach for manufacturers to compete cost-effectively in a global market that requires diverse product range, quick time to market, and rapid responses to supply sources. A key challenge is how to strike a balance between platform commonality and modularity. When a manufacturer outsources its raw materials or module options, the supplier capabilities and production costs should be considered. This paper discusses optimizing decision variables for simultaneously configuring not only platform-based product variants but also their supply chain. We develop a mixed-integer programming model that integrates both platform product design and material purchase decisions based on cost drivers sensitive to commonality and modularity. Theoretical analysis of the model yields two properties, allowing us to further simplify the model and thus help in developing an effective solution algorithm. A numerical example is presented to illustrate how manufacturers strive to dynamically adjust their product design strategies in response to changes in the market demands and/or supply base.

Manufacturing firm reaction to supplier failure and recovery

Purpose – Manufacturing firm reaction to a supply failure is important because buyer dissatisfaction may induce related development or switching costs. The purpose of this paper is to ask: what is the impact of a supply failure and recovery on manufacturing firm dissatisfaction with the supplier?Design/methodology/approach – A case study approach is used based on interviews of key informants, examining four US manufacturers classified by industry type (aerospace and electronics) and firm size (large and small).Findings – Manufacturing firm dissatisfaction increases relative to the accumulated impact of the supply failure, and is reduced when the manufacturer has slack to absorb the failure or shares blame for it. The suppliers failure recovery reduces dissatisfaction to the extent that it demonstrates the suppliers long‐term commitment to the relationship. The findings indicate that attributes of the failure, the failure recovery, and context must be taken into account when considering how a suppliers ...

Operationalising form postponement from a decision-making perspective

Form postponement means delaying the commitment of inventory to the final configuration of a product as long as possible. Many firms today are striving to redesign their products and/or their manufacturing and supply chain processes to implement form postponement. Opportunities for form postponement, however, are sometimes lost in the companies’ production-planning processes. By focusing on the deferring of product mix decisions in the master production scheduling process, this paper shows that form postponement opportunities can be divided into two components: one whose pursuit necessarily requires product and/or transformation process redesign, the other that can be pursued by changing the sales forecasting and master production scheduling process alone. We develop an operational procedure to identify and quantify, for a given product family, all opportunities for form postponement and their two respective components. Then, we discuss and empirically illustrate how the proposed measurement procedure may support companies in changing their decision-making routines to implement form postponement. Finally, we set future research directions on form postponement suggested by our results.

ERP System versus Stand‐Alone Enterprise Applications in the Mitigation of Operational Glitches

Business function-specific stand-alone enterprise applications (SEAs) are displacing functionally integrated enterprise resource planning (ERP) systems, despite strong empirical support for the business benefits of the latter. This study explores the conditions under which it may be more effective to use a set of SEAs instead of a single-suite ERP system, and vice versa. Based on Organizational Information Processing Theory, we expect differences in effectiveness to grow in prominence when the uncertainty of the operating environment increases, that is, when operational glitches in production processes become more frequent. Extending the existing literature, we postulate that high functional differentiation is a precondition for SEAs to be more effective than an ERP system, hypothesizing that the level of functional interdependence ultimately determines which type of software is superior for a given production process. We test our hypotheses using data collected from 163 make-to-order (MTO) production processes nested within 73 manufacturing plants and seven supply chains of complex, high-tech machinery. Results show that when functional interdependence is low, the negative effect of operational glitches on delivery performance is effectively mitigated in MTO production processes wherein process-related information is managed predominantly using SEAs; conversely, when functional interdependence is high, using an ERP system is more effective. Our findings offer practical guidelines as to when to use SEAs versus an ERP system while also integrating and updating the findings of earlier empirical research, in which each has been analyzed separately.