Minimizing the ripple effect caused by operational risks in a make-to-order supply chain

Abstract

Purpose This paper aims to introduce a web-based pilot system for minimizing the ripple effect (i.e. spreading of the negative impact of an exceptional event along the supply chain from its original position) caused by operational risks in the context of make-to-order supply chains. Design/methodology/approach The study employs a design science research methodology, which covers three major stages: system requirements identification, business process design and the implementation and evaluation of a web-based pilot system. Findings The developed system has the potential to significantly reduce the negative impact of the ripple effect caused by operational risks in a make-to-order supply chain in terms of material shortages, late deliveries and subsequent additional costs associated with expediting measures when a customer order is running late. Research limitations/implications The system presented in this paper is a prototype that needs to be further developed and tested in the future. Practical implications This paper provides integrated business processes and useful guidelines for supply chain managers and information system developers in dealing with the ripple effect in the supply chain. Originality/value In contrast to prior studies that have focused on investigating the impact of the ripple effect on the supply chain caused by natural or man-made disasters, this research attempts to offer a novel approach to address the research problem (i.e. the ripple effect caused by operational risks such as delays) directly from the design science perspective.

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