۱٫ Introduction

۲٫ Background and hypotheses development

۳٫ Data collection and sample description

۴٫ Methodology

۵٫ Results

۶٫ Discussion

Acknowledgments

References

Abstract

This paper empirically examines the effects of supply chain disruptions on firms’ performance by applying a new quantitative measure of a disruption’s impact that was adapted from the systems resilience literature. This new measure captures the total amount of loss suffered by a firm, and it supports comparing the relative performance of disrupted firms over time. To illustrate the value of the approach, both the operating performance and the stock market reaction are analyzed for more than 300 firms that suffered a supply chain disruption between 2005 and 2014. After validating the results against the reported behaviors from previous analyses, the new impact measure is explicitly used to show that different sized firms and different industry sectors exhibit varying amounts of loss, not just in the short term, following the announcement of the disruption, but also over an extended period of time after the disruption occurs.

Introduction

Within the current global business environment, every organization faces different types of risk that can disrupt the flow of material and information and thus disrupt that organization’s supply chain. Although the effects of some disruptions may be relatively easy to manage, others may have a much more significant impact on supply chains’ long-term performance. For example, among its other impacts, the Tohoku earthquake and tsunami in 2011 delayed delivery of Apple’s iPad2 (Revilla & Sáenz, 2014) and disrupted the automotive sector and retail supply chains on a global scale (Todo et al., 2015; Torabi et al., 2015). Such extended disruptions can also be the result of human actions, as in the case of the West Coast port lockout in 2002 lasted 10 days, cost 2 several billion dollars, and took months for full recovery (Werling, 2014). Examples such as these clearly illustrate that the negative consequences of a supply chain disruption may often extend beyond just short-term financial loss, and that they may continue to impact the supply chain for months or even for years.