IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v178y2016icp169-186.html
   My bibliography  Save this article

The effect of supply-chain disruption, quality and knowledge transfer on firm strategy

Author

Listed:
  • Clemons, Rebecca
  • Slotnick, Susan A.

Abstract

We investigate the effect of supply-chain disruption on a firm's decisions to invest in quality, and on ordering decisions, when there is a variable rate of knowledge transfer and a choice between two suppliers. The current supplier produces components with acceptable quality, but deliveries are subject to random disruptions. The new supplier is not subject to disruption, but has a lower initial level of quality. Our analysis shows that supply chain disruption can be costly, but its effect can be mitigated by policies that sensibly allocate demand between two suppliers. When an alternative source of supply is desirable, a firm must consider the quality level of the supplier when choosing supplier development policies. We also find that the effectiveness of knowledge transfer between a firm and a supplier has a significant impact on profit and should be considered before implementing supplier development activities. This is the first paper to consider joint decision-making about order allocation and quality improvement investments, in the face of supply-chain disruption, when the effectiveness of investment is influenced by a variable rate of knowledge transfer.

Suggested Citation

  • Clemons, Rebecca & Slotnick, Susan A., 2016. "The effect of supply-chain disruption, quality and knowledge transfer on firm strategy," International Journal of Production Economics, Elsevier, vol. 178(C), pages 169-186.
    • Handle: RePEc:eee:proeco:v:178:y:2016:i:c:p:169-186
    DOI: 10.1016/j.ijpe.2016.05.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527316300822
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2016.05.012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sawik, Tadeusz, 2015. "On the fair optimization of cost and customer service level in a supply chain under disruption risks," Omega, Elsevier, vol. 53(C), pages 58-66.
    2. Tang, Christopher & Tomlin, Brian, 2008. "The power of flexibility for mitigating supply chain risks," International Journal of Production Economics, Elsevier, vol. 116(1), pages 12-27, November.
    3. Wang, Weijia & Plante, Robert D. & Tang, Jen, 2013. "Minimum cost allocation of quality improvement targets under supplier process disruption," European Journal of Operational Research, Elsevier, vol. 228(2), pages 388-396.
    4. Ravi Anupindi & Ram Akella, 1993. "Diversification Under Supply Uncertainty," Management Science, INFORMS, vol. 39(8), pages 944-963, August.
    5. Brian Tomlin, 2006. "On the Value of Mitigation and Contingency Strategies for Managing Supply Chain Disruption Risks," Management Science, INFORMS, vol. 52(5), pages 639-657, May.
    6. Tang, Ou & Nurmaya Musa, S., 2011. "Identifying risk issues and research advancements in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 133(1), pages 25-34, September.
    7. Kevin B. Hendricks & Vinod R. Singhal, 2005. "Association Between Supply Chain Glitches and Operating Performance," Management Science, INFORMS, vol. 51(5), pages 695-711, May.
    8. Kaijie Zhu & Rachel Q. Zhang & Fugee Tsung, 2007. "Pushing Quality Improvement Along Supply Chains," Management Science, INFORMS, vol. 53(3), pages 421-436, March.
    9. Li, Jian & Wang, Shouyang & Cheng, T.C.E., 2010. "Competition and cooperation in a single-retailer two-supplier supply chain with supply disruption," International Journal of Production Economics, Elsevier, vol. 124(1), pages 137-150, March.
    10. P. Nandakumar & S. M. Datar & R. Akella, 1993. "Models for Measuring and Accounting for Cost of Conformance Quality," Management Science, INFORMS, vol. 39(1), pages 1-16, January.
    11. Sammi Y. Tang & Haresh Gurnani & Diwakar Gupta, 2014. "Managing Disruptions in Decentralized Supply Chains with Endogenous Supply Process Reliability," Production and Operations Management, Production and Operations Management Society, vol. 23(7), pages 1198-1211, July.
    12. Tang, Christopher S., 2006. "Perspectives in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 103(2), pages 451-488, October.
    13. Heckmann, Iris & Comes, Tina & Nickel, Stefan, 2015. "A critical review on supply chain risk – Definition, measure and modeling," Omega, Elsevier, vol. 52(C), pages 119-132.
    14. Christopher D. Ittner, 1996. "Exploratory Evidence on the Behavior of Quality Costs," Operations Research, INFORMS, vol. 44(1), pages 114-130, February.
    15. Ping Su & Shuguang Liu, 2015. "Dual sourcing in managing operational and disruption risks in contract manufacturing," International Journal of Production Research, Taylor & Francis Journals, vol. 53(1), pages 291-306, January.
    16. Sawik, Tadeusz, 2011. "Selection of supply portfolio under disruption risks," Omega, Elsevier, vol. 39(2), pages 194-208, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nelson Duarte & Vítor Santos & Anna Dziadkiewicz & Joanna Nieżurawska & Wioleta Dryl & Tomasz Dryl & Lech Nieżurawski & Carla Sofia Gonçalves Pereira & Tiago Fernandndo Ferreira Lopes, 2017. "Stymulanty i bariery w procesie transferu wiedzy – przegląd literatury," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 44, pages 175-196.
    2. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    3. Tse, Ying Kei & Zhang, Minhao & Zeng, Wenjuan & Ma, Jie, 2021. "Perception of supply chain quality risk: Understanding the moderation role of supply market thinness," Journal of Business Research, Elsevier, vol. 122(C), pages 822-834.
    4. Glock, Christoph H. & Grosse, Eric H. & Ries, Jörg M., 2017. "Reprint of “Decision support models for supplier development: Systematic literature review and research agenda”," International Journal of Production Economics, Elsevier, vol. 194(C), pages 246-260.
    5. Jain, Tarun & Hazra, Jishnu, 2017. "Dual sourcing under suppliers' capacity investments," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 103-115.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    2. Li, Yongjian & Zhen, Xueping & Qi, Xiangtong & Cai, Gangshu (George), 2016. "Penalty and financial assistance in a supply chain with supply disruption," Omega, Elsevier, vol. 61(C), pages 167-181.
    3. Jin Sung Rha, 2020. "Trends of Research on Supply Chain Resilience: A Systematic Review Using Network Analysis," Sustainability, MDPI, vol. 12(11), pages 1-27, May.
    4. Pritee Ray & Mamata Jenamani, 2016. "Sourcing decision under disruption risk with supply and demand uncertainty: A newsvendor approach," Annals of Operations Research, Springer, vol. 237(1), pages 237-262, February.
    5. Mishra, Deepa & Sharma, R.R.K. & Kumar, Sameer & Dubey, Rameshwar, 2016. "Bridging and buffering: Strategies for mitigating supply risk and improving supply chain performance," International Journal of Production Economics, Elsevier, vol. 180(C), pages 183-197.
    6. Pritee Ray & Mamata Jenamani, 2016. "Sourcing decision under disruption risk with supply and demand uncertainty: A newsvendor approach," Annals of Operations Research, Springer, vol. 237(1), pages 237-262, February.
    7. Hong, Yoo Suk & Huh, Woonghee Tim & Kang, Changmuk, 2017. "Sourcing assemble-to-order inventories under supplier risk uncertainty," Omega, Elsevier, vol. 66(PA), pages 1-14.
    8. Dunke, Fabian & Heckmann, Iris & Nickel, Stefan & Saldanha-da-Gama, Francisco, 2018. "Time traps in supply chains: Is optimal still good enough?," European Journal of Operational Research, Elsevier, vol. 264(3), pages 813-829.
    9. Behzadi, Golnar & O’Sullivan, Michael Justin & Olsen, Tava Lennon & Zhang, Abraham, 2018. "Agribusiness supply chain risk management: A review of quantitative decision models," Omega, Elsevier, vol. 79(C), pages 21-42.
    10. Qazi, Abroon & Dickson, Alex & Quigley, John & Gaudenzi, Barbara, 2018. "Supply chain risk network management: A Bayesian belief network and expected utility based approach for managing supply chain risks," International Journal of Production Economics, Elsevier, vol. 196(C), pages 24-42.
    11. Ali, Syed Mithun & Rahman, Md. Hafizur & Tumpa, Tasmia Jannat & Moghul Rifat, Abid Ali & Paul, Sanjoy Kumar, 2018. "Examining price and service competition among retailers in a supply chain under potential demand disruption," Journal of Retailing and Consumer Services, Elsevier, vol. 40(C), pages 40-47.
    12. Zhu, Stuart X., 2015. "Analysis of dual sourcing strategies under supply disruptions," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 191-203.
    13. Huang, He & Xu, Hongyan, 2015. "Dual sourcing and backup production: Coexistence versus exclusivity," Omega, Elsevier, vol. 57(PA), pages 22-33.
    14. Heckmann, Iris & Comes, Tina & Nickel, Stefan, 2015. "A critical review on supply chain risk – Definition, measure and modeling," Omega, Elsevier, vol. 52(C), pages 119-132.
    15. Sreedevi, R. & Saranga, Haritha, 2017. "Uncertainty and supply chain risk: The moderating role of supply chain flexibility in risk mitigation," International Journal of Production Economics, Elsevier, vol. 193(C), pages 332-342.
    16. Kelei Xue & Ya Xu & Lipan Feng, 2018. "Managing Procurement for a Firm with Two Ordering Opportunities under Supply Disruption Risk," Sustainability, MDPI, vol. 10(9), pages 1-32, September.
    17. Neungho Han & Juneho Um, 2024. "Risk management strategy for supply chain sustainability and resilience capability," Risk Management, Palgrave Macmillan, vol. 26(2), pages 1-26, May.
    18. Tang, Christopher S. & Davarzani, Hoda & Sarkis, Joseph, 2015. "Quantitative models for managing supply chain risks: A reviewAuthor-Name: Fahimnia, Behnam," European Journal of Operational Research, Elsevier, vol. 247(1), pages 1-15.
    19. Shao, Xiao-Feng, 2012. "Demand-side reactive strategies for supply disruptions in a multiple-product system," International Journal of Production Economics, Elsevier, vol. 136(1), pages 241-252.
    20. Jain, Tarun & Hazra, Jishnu, 2017. "Dual sourcing under suppliers' capacity investments," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 103-115.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:178:y:2016:i:c:p:169-186. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.