Mitigating ripple effect in supply networks: the effect of trust and topology on resilience

ABSTRACT

The ripple effect refers to disruption propagation across the supply network affecting its global performance. To cope with it, supply networks should be resilient. This study investigates the drivers of supply network resilience, viewed as adaptive capacity to disruptions, focusing on trust and investigating the moderating role of network topology on the relationship between trust and resilience. We first develop an NK agent-based model of the supply network to simulate resilient performance. Then, a simulation analysis is carried out, to assess the effect of trust on the resilience of supply networks displaying different complex topologies. Our results confirm that trust positively affects supply network resilience; however, across the different topologies, the beneficial effect of trust varies. In particular, we find that trust is beneficial at most for the following topologies: local, small-world, block-diagonal, and random. For centralised, diagonal, and hierarchical topologies improving trust increases resilience at a moderat e level. We also find that, as the frequency of disruptions rises, the positive effect of trust on resilience decreases. Managerial implications of the main findings are finally discussed.

KEYWORDS:

• Resilience
• trust
• supply network topology
• supply networks
• agent-based simulation

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Ilaria Giannoccaro

Ilaria Giannoccaro is Associate Professor in Management Engineering and founder of Collective Intelligence research group at the Politecnico di Bari, Italy. She got the M. Sc. degree in Mechanical Engineering (110/110 cum laude) in April 1998 at the Polytechnic of Bari and in 2001 the Ph.D. degree in Economic and Management Engineering at the University of Rome Tor Vergata. She is Coordinator for International Mobility of Students in Management Engineering and Department Delegate for Internationalization. Since 2018, she also is Deputy Head of the Department of Mechanics Mathematics and Management. She has been visiting scholar at the Arizona State University – Department of Supply Chain Management in 2011 and 2015 and at the Santa Fe Institute in 2018. In 2011 she joined the Center for Supply Networks at the WP Carey Business School, Arizona State University. She regularly acts as associate editor and member of scientific board of international conferences and as referee for more than 30 scientific journals. Her principal research interests concern supply chain management, collective decision-making, and circular economy. She is author of more than 100 papers mostly published in international books and high-quality journals, among which European Journal of Operational Research, Ecological Economics, International Journal of Production Economics, Industrial Marketing Management, Decision Sciences, and Journal of Cleaner Production.

Anas Iftikhar

Anas Iftikhar – He graduated with MSc in Supply Chain and Logistics Management from the University of Warwick, U.K in 2012. After that, he dedicated himself to get industry experience in the pharmaceuticals and consumer goods sector and worked in the inventory planning and operations management area. Since 2017 he has been attending the PhD programme in Economics, Management and Quantitative Methods at the University of Salento, Italy. His main area of research lies in supply chain resilience and organisational capabilities.