Capturing key interdependences among supply chain disruptions and mitigation strategies to enhance firm performance

Abstract

PurposeThis paper aims to capture the complex interdependences between supply chain disruptions (SCDs), SC risk mitigation strategies and firm performance in the context of disruptive events to enhance resilience for medium-sized and large firms coping with complex supply chain networks. The roles of digitalization, insurance and government support have also been addressed as potential strategies to counteract the impacts of disruptions on supply chains.Design/methodology/approachThis study is based on an empirical investigation in an FMCG company – using a hybrid causal mapping technique based on the frameworks of interpretive structural modeling (ISM) and Bayesian networks (BN) – of 11 levels of relationships between SCDs (in supply, production, logistics, demand and finance), SC risk mitigation strategies (flexibility, efficiency, agility and responsiveness), insurance, government support, information and knowledge sharing, digitalization and finally the key firm performance measures (continuity, quality and financial performance).FindingsThe results of the empirical investigation reveal and describe: (1) the nature and probabilistic quantification of the lower-level relationships among the four SCDs, among the mitigation strategies and the three firm performance measures; (2) the nature and probabilistic quantification of the higher-level relationships among the impacts of SCDs, SC risk mitigation strategies and firm performance and (3) how to model and quantify the complex interdependences in single firms and their supply chains.Originality/valueOur results can support managers in developing more effective decision-making models to assess and manage unfavorable events and cascade effects among different functions and processes in the context of risks and disruptions.