Managing Supply Chain Volatility Caused by Major Disruptions : Creating a Disruption Preparedness Scorecard
Qvintus, Pauli (2021)
Qvintus, Pauli
2021
Rakennustekniikan DI-ohjelma - Master's Programme in Civil Engineering
Rakennetun ympäristön tiedekunta - Faculty of Built Environment
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Hyväksymispäivämäärä
2021-03-29
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202103112521
https://urn.fi/URN:NBN:fi:tuni-202103112521
Tiivistelmä
Natural disasters, extreme weather, trade disputes, critical supply shortages, financial problems and new surprising events periodically occur around the world. They often cause severe supply chain disruptions which reduce profitability and can even cause bankruptcy. Disruption response measures are becoming common with the increase of resilient supply chains and added visibility, when facing frequently occurring disruptions. However, the field still lacks studies and applications on supply chain disruption prevention and response methods, when dealing with major disruptions caused by events exogenous to supply chain processes. The goal of this research is to develop a tool that can evaluate a firm’s disruption preparedness and offer a set of strategies for improving the ability to face disastrous events.
A literature review was conducted on material related to supply chain disruptions, supply chain vulnerabilities, supply chain risk management, natural disasters, risk mitigation strategies, country risk assessments and measures to assess different aspects of supply chains. The focus was on recent research and past case studies. The development of supply chain risk management methods and supply chains’ resilience factors were also analysed. The framework selected was the supply chain volatility dimension division where institutional and environmental volatility contains national economic and financial volatility, exceptional environmental events and political and legal instability.
The selected disruptive events that matched the set framework were extreme weather, volcanic activity, earthquakes and tsunamis, diseases, terrorism and war, economic conflicts, financial crises, and labour strikes, as those events have caused major supply chain disruptions in the past. Event specific and general supply chain disruption risk mitigation strategies were sought out from literature and were also developed in this thesis, and they were divided into three time periods: before, during and after a disruptive event.
Measures for the evaluation of a supply chain’s characteristics, which affect supply chain disruption preparedness, were formed with the input of fellow researchers. The measures represented weaknesses that have been witnessed to be the causes of severe problems, and the strengths which have limited damages when disruptions have occurred. These measures were determined by rating scales. Also, a location-based evaluation was performed where country risk assessments were used. The gathered data was then evaluated by supply chain disruption preparedness score equations which were created for the tool.
The final outcome was a comprehensive tool for quickly assessing a supply chain’s preparedness for various disruptive event types that also offers a guideline on how to develop supply chain operations to decrease risk in supply chains.
A literature review was conducted on material related to supply chain disruptions, supply chain vulnerabilities, supply chain risk management, natural disasters, risk mitigation strategies, country risk assessments and measures to assess different aspects of supply chains. The focus was on recent research and past case studies. The development of supply chain risk management methods and supply chains’ resilience factors were also analysed. The framework selected was the supply chain volatility dimension division where institutional and environmental volatility contains national economic and financial volatility, exceptional environmental events and political and legal instability.
The selected disruptive events that matched the set framework were extreme weather, volcanic activity, earthquakes and tsunamis, diseases, terrorism and war, economic conflicts, financial crises, and labour strikes, as those events have caused major supply chain disruptions in the past. Event specific and general supply chain disruption risk mitigation strategies were sought out from literature and were also developed in this thesis, and they were divided into three time periods: before, during and after a disruptive event.
Measures for the evaluation of a supply chain’s characteristics, which affect supply chain disruption preparedness, were formed with the input of fellow researchers. The measures represented weaknesses that have been witnessed to be the causes of severe problems, and the strengths which have limited damages when disruptions have occurred. These measures were determined by rating scales. Also, a location-based evaluation was performed where country risk assessments were used. The gathered data was then evaluated by supply chain disruption preparedness score equations which were created for the tool.
The final outcome was a comprehensive tool for quickly assessing a supply chain’s preparedness for various disruptive event types that also offers a guideline on how to develop supply chain operations to decrease risk in supply chains.