Supply Chain Dispute Resolution: A Delphi Study

Supply Chain Dispute Resolution: A Delphi Study

Frank Wolf (Nova Southeastern University, USA) and Lee Pickler (Baldwin Wallace College, USA)
DOI: 10.4018/jisscm.2010070104
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Abstract

This paper examines how supply chain conflicts across domestic and international jurisdictions arise and become resolved given that conventional conflict resolution tribunals cannot effectively settle fast enough to serve the needs of supply chain partners. Observations from the field should guide practitioners, and in combination with information technology, may lead to best practice rules in dispute resolution. For this study, the Delphi Method was selected, in which a panel of 14 experts participated in three rounds of successive surveys over a one-year period. Survey data was collected by mail as well as via telephone conversations and interviews, while under the Delphi method, the content of the second questionnaire was derived from the responses of the first questionnaire. All participants were supply chain experts in the United States from eight different industrial sectors, and none of the participants interacted with one another. End results show that supply chain’s relationships are very private trade arrangements and that disputes arise, predictably, from common performance criteria such as quality, timely delivery and payment issues.
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Literature Review

Given the recent phenomenon of Supply Chain Management as a field of study, a considerable body of literature has accumulated on the subject. However, very little has been written about supply chain disputes, and even less about methods of supply chain dispute resolution. On that basis the literature review is focused mainly on the period after the year 2000. Dispute settlements can occur formally in a court of competent jurisdiction, or less formally in another forum such as the American Arbitration Association, AAA (2001), or informally through negotiation. There may be several reasons for this gap in the literature, one being the novelty of the subject, another, is conflict experience is not what supply chain managers wish to publicize. In the current literature the terms “conflict” and “risk” are often used interchangeably. One such reference is Chopra et al. (2004), in which he discusses risks in terms of disruptions, delays, systems, forecasts, intellectual property, procurement, receivables, inventory, and capacity risks. For each of these, there is a comprehensive discussion of remedies and risk avoidance without touching on the subject of dispute resolution conventions. Given the link between risk and dispute, risk avoidance is of course preferable to dispute resolution. The drivers for supply chain disruptions, for example, are natural disasters, labor strikes, supplier bankruptcies, war and terrorism, and a single source dependency. A mitigating strategy for disruptions in supply chains consists of carrying larger inventories and developing supplier redundancies. For each of the other risk categories, mitigating strategies are offered by the authors. Lee (2008) addresses one risk that Chopra (2004) does not address, namely the risk of having too many supply chain partners, which issue arose among this Delphi Study’s respondents. The author approaches the subject by suggesting a model to compute the optimum number of supply chain partners by a mean-value approach with deterministic failure cost. Denning (2008) approaches the subject of shortening supply chains from the practical side, observing that bottlenecks in ports, roads, and rail networks have increased cost greatly.

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