Minimizing the ripple effect caused by operational risks in a make-to-order supply chain. Issue 4 (2nd May 2020)

• Record Type: Journal Article
• Authors: Xu, Henry
• Is Part Of: International journal of physical distribution & logistics management. Volume 50:Issue 4(2020)
• Page Start: 381
• Page End: 402
• Publication Date: 2020-05-02
• Subjects: The ripple effect -- Make-to-order -- Operational risks -- Supply chain visibility -- Early warning -- Exception handling; Physical distribution of goods -- Management -- Periodicals; Business logistics -- Periodicals; Materials management -- Periodicals; 658.788
• DOI: 10.1108/IJPDLM-06-2018-0213
• Languages: English
• ISSNs: 0960-0035

Abstract

Abstract : Purpose: This paper aims to introduce a web-based pilot system for minimizing the ripple effect (i.e. spreading of the negative impact of an exceptional event along the supply chain from its original position) caused by operational risks in the context of make-to-order supply chains. Design/methodology/approach: The study employs a design science research methodology, which covers three major stages: system requirements identification, business process design and the implementation and evaluation of a web-based pilot system. Findings: The developed system has the potential to significantly reduce the negative impact of the ripple effect caused by operational risks in a make-to-order supply chain in terms of material shortages, late deliveries and subsequent additional costs associated with expediting measures when a customer order is running late. Research limitations/implications: The system presented in this paper is a prototype that needs to be further developed and tested in the future. Practical implications: This paper provides integrated business processes and useful guidelines for supply chain managers and information system developers in dealing with the ripple effect in the supply chain. Originality/value: In contrast to prior studies that have focused on investigating the impact of the ripple effect on the supply chain caused by natural or man-made disasters, this research attempts to offer a novel approach to address the research problem (i.e. the ripple effect caused by operational risks such as delays) directly from the design science perspective.