Impact of Supply Chain Human Capability, Responsive Design, and Collaboration on Supply Chain Resilience

Introduction

The business scenario of today is facing uncertainties like never before due to the volatile demand and disruption in the wider supply chain (Christopher & Peck, 2004). The complexities added to these are managing an ever increasing product variety, the shortening of product life cycles, and the global reach of the supply chain (Ponomarov & Holcomb, 2009). Various types of supply chain risks are faced in organisations in different ways. To mention a few, supply chains may experience demand risk due to swings in demand, seasonality, or lack of supply chain visibility. Delay risks in distribution may be due to transhipment and transportation breakdowns and port congestions, resulting in an inventory mismatch between demand and supply.

The risk of the “Bullwhip effect,”—customer demand distortions that fluctuate up the supply chain causing significant financial losses due to excess inventory and lost sales opportunities—is due to a lack of access to accurate, direct customer demand information (Chopra & Sodhi, 2004). This paper deals largely with organisational risks and mitigation efforts where sources are within the boundary of the organisation and at interaction points with supply chain partners. In a supply chain, risk has to be mitigated through a systematic approach based on basic principles (Ambulkar et al., 2016). Process variability in management is viewed as threatening and undesirable. However, in supply chain contexts it is a reality and has to be managed. Management of such variability systematically leads to a resilient supply chain.

Resilience is associated with a strong market position, which organisations want to enjoy. A slow response to disruption can lead to losing market share, while a quick response can lead to gaining market share (Sheffi & Rice Jr, 2005). A resilient supply chain brings better predictability in such a supply chain, thus giving the organization a competitive advantage. Interweaving redundancy and flexibility into the organizational structure positively impacts its resilience. Changing company culture is akin to changing the mind-set when introducing proactive risk management processes that have a lasting impact on supply chain resilience (Briano et al., 2010). Organisations create an atmosphere of empowerment to build supply chain resilience. When a company’s vision and goals are regularly communicated, it helps in building an atmosphere of passion. Employees can be better equipped when the challenges faced by the organisation are shared with them. Organisations create an atmosphere of ownership wherein the employees keep in mind the best interests of the organisation. Employees are equipped to understand where risks might lie. Front line managers are empowered to take appropriate action when they see adverse circumstances. They are invested with the responsibility and power to act in the best interests of the organisation (Briano et al., 2010). Organizations that distribute decision-making powers have a resilient supply chain (Sheffi & Rice Jr, 2005).

Literature that establishes the impact of the human aspect of supply chain capability and responsive supply chain to provide an empirically validated structural model using data based on the respondents’ experience in their respective organisations, concludes that supply chain capability (human aspects), collaboration, and responsive supply chain design does influence supply chain resilience and performance.