Book chapter
Systemic Risk and the Ripple Effect in the Supply Chain
Handbook of Ripple Effects in the Supply Chain, pp.85-100
International Series in Operations Research & Management Science, Springer International Publishing
04/18/2019
DOI: 10.1007/978-3-030-14302-2_4
Abstract
Supply chains are highly complex systems, and disruptions may ripple through these systems in unexpected ways, but they may also start in unexpected ways. We investigate the causes of ripple effect through the lens of systemic risk. We derive supply chain systemic risk from the finance discipline where sources of risk are found in systemic risk-taking, contagion, and amplification mechanisms. In a supply chain context, we identify three dimensions that influence systemic risk, the nature of a disruption, the structure, and dependency of the supply chain, and the decision-making. Within these three dimensions, there are several factors including correlation of risk, compounding effects, cyclical linkages, counterparty risk, herding behavior, and misaligned incentives. These factors are often invisible to decision makers, and they may operate in tandem to exacerbate ripple effect. We highlight these systemic risks, and we encourage further research to understand their nature and to mitigate their effect.
Details
- Title: Subtitle
- Systemic Risk and the Ripple Effect in the Supply Chain
- Creators
- Kevin P Scheibe - Iowa State UniversityJennifer Blackhurst - University of Iowa
- Resource Type
- Book chapter
- Publication Details
- Handbook of Ripple Effects in the Supply Chain, pp.85-100
- Publisher
- Springer International Publishing; Cham
- Series
- International Series in Operations Research & Management Science
- DOI
- 10.1007/978-3-030-14302-2_4
- eISSN
- 2214-7934
- ISSN
- 0884-8289
- Language
- English
- Date published
- 04/18/2019
- Academic Unit
- Business Analytics; Bus Admin Graduate Programs
- Record Identifier
- 9984201531102771
Metrics
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