Conceptualization and Measurement of Supply Chain Resilience in an Open-System Context

Abstract

In this article, we explore the topic of supply chain resilience (SCR) in an open-system context. Systems theory and cybernetics are important methodologies in the analysis of complex networks. However, relatively little is known about their application in the supply chain (SC) operations. Using systems theory and cybernetics for SCR conceptualization, we argue that a systems-theoretical lens can help to extend the state-of-the-art research to describe SCR based on the concept of balancing vulnerability and recoverability over time. Toward this end, we define and test a new resilience measure for SCR using the Bayesian network approach with a compounding function of vulnerability and recoverability. We further propose managerial actions for implementing an open-system view of SCR. To demonstrate the applicability and usefulness of our method, we measure and analyze the resilience levels of a manufacturer. Our results provide useful decision-making support and can be valuable for SC managers seeking to balance risk mitigation and recovery capabilities. The framework and measure developed can also be used to guide firms seeking to analyze the impact of disruptions on SCs through the consideration of both performance degradation and recovery.

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