Modelling the impact of climate change risk on supply chain performance

ABSTRACT

Climate change is among the top global risks due to its growing adverse impact on businesses. However, few empirical studies address this imminent risk from a supply chain perspective. Due to a lack of established approaches for capturing complex interaction between climate change risk and supply chain performance, a three-phase mixed methodology approach was attempted. A cognitive map first captured the inter-relationships based on a mental model established by a group of experts. Later, a survey gathered from industry practitioners assessing causal relationships identified key climate change factors and most influenced supply chain performance dimensions. Finally, a system dynamics model supported by multiple case scenarios assessed the implications of climate change on supply chain performance. The results indicated a significant reduction in the availability of natural resources/raw material and capacity, leading to increase in stock-outs, inventory costs and bottlenecks disrupting procurement, manufacturing and logistics functions. Supply chain performance captured through efficiency and effectiveness shows a negative trend with increasing climate change consequences. The systems approach followed in this paper contributes by providing a quantitative model for assessing the impact of climate change risk on supply chain performance.

KEYWORDS:

• Supply chain performance
• climate change
• performance measurement
• climate risk
• uncertainty
• systems theory

Acknowledgements

This study was supported by the Scientific and Technological Research Council of Turkey (TUBITAK) under the TUBITAK BIDEB 2219-International Postdoctoral Research Scholarship Programme. Authors would also like to thank reviewers and special issue guest editor for their constructive recommendations for improving the quality of manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by Scientific and Technological Research Council of Turkey (TUBITAK) under the TUBITAK BIDEB 2219-International Postdoctoral Research Scholarship Programme.

Notes on contributors

Merve Er Kara

Merve Er Kara is an Assistant Professor in the department of Industrial Engineering at Marmara University, Turkey. She holds BS, MS and PhD degrees in Industrial Engineering. She completed one-year Postdoc at Heriot-Watt University, Edinburgh, UK in 2019. Post-doctoral project was supported by the international post-doctoral research scholarship programme of the Scientific and Technological Research Council of Turkey (TUBITAK). Her main research interests include supply chain risk, simulation/modeling, data mining and ant colony optimisation. She has published her work in international journals, conference papers and book chapters. She has also participated in few research projects in Turkey.

Abhijeet Ghadge

Abhijeet Ghadge is a Senior Lecturer in Logistics and Supply Chain Management at Cranfield School of Management, UK. He holds PhD in Operations and Supply Chain Management from Loughborough University, UK, and MTech in Industrial Engineering and Management from Indian Institute of Technology, Kharagpur, India. He has over 13 years of industrial, academic and consulting experience working with a wide range of UK, European and Asian organisations. Dr Ghadge has published widely in the leading operations, logistics and supply chain management journals. He follows practice-driven approach to problems across the broad domains of supply chain risk, sustainability and Industry 4.0.

Umit Sezer Bititci

Umit Bititci is Professor of Business Performance and the Deputy Executive Dean of Edinburgh Business School at Heriot Watt University, Edinburgh, UK. He has a background that blends engineering, management consulting and academic research. He has authored several papers and books some of which have been widely cited. He has led several large research projects in collaboration with industry partners across Europe. His research is underpinned with whole systems approach to understanding how organisations measure and manage performance, where he uses industry as his research laboratory.