Journal of Business Logistics, 2011, 32(4): 374391 Council of Supply Chain Management Professionals

An Empirically Derived Framework of Global Supply Resiliency

Jennifer Blackhurst1, Kaitlin S. Dunn2, and Christopher W. Craighead2
1 2

Iowa State University The Pennsylvania State University

n todays global business environment, supply chains have increased in both length and complexity. This increase in length and complexity coupled with a focus on improving eciency, such as lean manufacturing practices, may lead to higher levels of supply chain risk where the likelihood of a disruption severely impacting supply chain performance increases. Resilient supply chains have been touted as a means to reduce the likelihood and severity of supply chain disruptions. However, there is little empirical evidence relative to the factors that contribute to or detract from supply resiliency. Using systems theory and the resource-based view of the rm as the theoretical underpinnings, this study provides an in-depth systematic investigation of supply resiliency. Adopting a theory-building approach based on a multi-industry empirical investigation, this study derives empirical generalizations linking 19 supply chain characteristics to supply resiliency. The study culminates in a framework that could be used to assess the level of resiliency in a supply base. Building on this framework, the study also provides a supply resiliency matrix that can be utilized to classify supply chains, or supply chains segments according to the level of resiliency realized. This article concludes by proposing several future research directions and issues that may be investigated in more detail. Keywords: supply chain management; supply resiliency; supply risk; supply disruptions; systems theory; resource-based view of the rm

INTRODUCTION In todays global business environment, supply chains have increased in both length and complexity (Blackhurst et al. 2005). This increase in length and complexity coupled with a focus on improving eciency, such as lean manufacturing practices, may lead to higher levels of supply chain risk where the likelihood of a disruption (dened as events that interrupt the regular ow of goods or services within a systemcf. Svensson 2000; Kleindorfer and Saad 2005; Craighead et al. 2007) severely impacting supply chain performance increases (Chopra and Sodhi 2004; Zsidisin et al. 2005b; Wagner and Bode 2008). Recently, interest in supply chain disruptions has increased as disruptions have been shown to culminate in negative consequences to a rms operations and performance. These negative consequences can have immediate detrimental impact as well as longer term eects on the rm. Ericsson, for example, reported a $400 million loss when it did not receive chip deliveries from a Philips plant due to a 10-min re (Latour 2001). A survey by Rice and Caniato (2003) estimate the daily cost of a supply chain disruption to be anywhere from $50 to $100 million. The negative impact of disruptions often extends beyond short-term losses. Publicly traded rms experience signicant decreases in shareholder value after announcing a disruption in their supply chain (Knight and Pretty 1998, 2003; Hendricks and Singhal 2003, 2005a,b). Although rms cannot completely eliminate the probability of disruptions within their supply network (Blackhurst et al. 2005; Zsidisin et al. 2005a), scholars have
Corresponding author: Jennifer Blackhurst, Supply Chain and Information Systems Department, College of Business, Iowa State University, 3131 Gerdin Business Building, Ames, IA 50011, USA; E-mail: jvblackh@iastate.edu

explored various actions that can be taken to reduce vulnerability to risks and the likelihood of disruptions (e.g., Norrman and Jansson 2004; Craighead et al. 2007; Deane et al. 2009). Companies, for example, can build resilience in their supply networks, which enhances a rms ability to absorb disruptions or enables the supply network to return to stable conditions faster and thus has a positive impact on rm performance (She and Rice 2005). She and Rice (2005) contend that building a resilient supply chain should be a strategic initiative because the ow of goods through a supply network is vital to a rms existence. Likewise, Zsidisin et al. (2005a) note that a rms ability to survive after a disruption is directly related to the level of resiliency within their supply chain. In fact, a number of supply chain risk researchers note the importance of increasing resiliency within a supply chain (e.g., Zsidisin and Ellram 2003; Zsidisin et al. 2004). In this article, we specically dene supply chain resilience as a rms ability to recover from disruptive events (Rice and Caniato 2003; She and Rice 2005). Extant research in the area of supply chain disruptions and the selection of strategies that help rms build a resilient supply chain is informative. For example, Manuj and Mentzer (2008a) provide an important and foundational step in shedding insight into how rms can begin to develop eective supply chain risk management strategies. Manuj and Mentzer (2008a) propose the temporal focus on the rm, level of exibility in the supply chain, and supply chain environment (demand and supply side risks) aect the selection of a mitigation strategy and are moderated by the composition of the risk management team. Risk management strategies are broken down into six broad categories and the authors note that managers need to understand the advantages and disadvantages of each strategy and when they are appropriate. While research progress has been made, more attention is needed to more fully develop our understanding of disruptions and resilience. Research gaps have been noted

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by several researchers. Hendricks and Singhal (2005b), for example, state that it is critical for rms to enhance the resiliency in their supply chains and call for research that investigates specic tactics that help rms develop such capabilities. Hendricks et al. (2008) note the lack of rigorous empirical evidence that examines which strategies reduce the probability and severity of disruptions. Hendricks et al. (2008) suggest working closely with companies to produce case studies that capture specic characteristics of supply chain disruptions to shed light on the eectiveness of various mitigation strategies. Other scholars recognize the large amount of work that remains to be done in regards to supply chain disruptions and specic strategies to help rms increase the resiliency within their supply networks (Hallikas et al. 2002; Zsidisin and Ellram 2003; Braunscheidel and Suresh 2009). This gap in the literature, namely the lack of understanding in how to help rms develop strategies to improve their resilience to supply chain disruptions, provides the motivation for this research. While disruptions may occur within upstream and downstream portions of the supply chain, our research focuses on the supply side of the chain. We adopt She and Rices (2005) view of a resilient rm where vulnerability to a disruption is decreased through specic mechanisms that impact resiliency. A rms resiliency enhancers are dened as: attributes that increase a rms ability to quickly and eciently recover from a disruptive event. Conversely, a rms resiliency reducers have the opposite eect and are dened as: attributes that decrease a rms ability to quickly and eciently recover from a disruptive event. Our study intends to provide an in-depth systematic investigation of supply resiliency by employing a multi-industry empirical investigation of supply disruptions and corresponding supply design characteristics that enhance (resiliency enhancers) or take away from (resiliency reducers) supply resiliency. As the body of knowledge relative to supply resiliency is still in its infancy and ndings are fragmented across the literature, this study is designed to be exploratory in nature. While this study builds upon the foundational work of Manuj and Mentzer (2008a) and others (e.g., Zsidisin and Ellram 2003; Elkins et al. 2005; Blackhurst et al. 2008) we did not rely solely on the current body of knowledge as this could result in missing important elements of supply resiliency that have not yet been identied. In essence, the objective of this research was to move toward a holistic view of supply resiliency that is grounded in practice and thus qualitative methods were deemed as appropriate (Eisenhardt 1989; Yin 1994; Locke 1996; Strauss and Corbin 1998). From our ndings, we derive several empirical generalizations (Handeld and Melnyk 1998) that culminate in a supply resiliency framework, which oers both research and managerial implications. This work answers the calls for empirical research that investigates specic strategies to enhance supply resilience. While our empirical generalizations and framework certainly need to be thoroughly examined in future research, we believe our research contributes to a solid foundation to further the maturation of the supply resilience body of knowledge.

THEORETICAL FOUNDATION Since our study is exploratory in nature with the intent of developing, as opposed to testing, theory (Handeld and Melnyk 1998), we used two theoretical bases to guide and frame our research (Eisenhardt 1989). Specically, we use systems theory (Bertalany 1951) as a broad framework to organize supply chain characteristics that detract from resiliency (reducers) and the resource-based view (RBV) of the rm (Barney 1991) as a means to frame our ndings relative to organizational mitigation capabilities that increase resiliency (enhancers). We briey discuss these two theoretical bases in light of supply disruptions and resiliency. Systems theory Organizations are systems (Bertalany 1951) that are open and therefore are inuenced by and interact with the external environment (Katz and Kahn 1978). As supply chains are composed of nodes that are interconnected by the physical ow of materials (Towill et al. 1992), systems theory is an intuitive and widely used theoretical base in supply chain literature (cf. Frankel et al. 2008; Manuj and Mentzer 2008b; Skipper et al. 2008). As open systems, organizations rely on a steady ow of inputs that originate and are extracted from sources in the environment to sustain their operations (Deeter-Schmelz 1997; Zsidisin and Ellram 2003), which illustrates the systems theory concept of negentropyorganizational self maintenance due to the presence of environmental inputs (Bertalany 1956). We recognize there are various types of organizational environments. In this article, we refer to the task environment, which views the supply side of the chain as a source of environmental inputs (cf. Dill 1958). As a reminder, although organizations interchange with their environment (i.e., receive materials from upstream suppliers and deliver products to downstream customers), we limit our investigation to the supply side. As open systems, the necessary inputs from the environment will vary depending on the industry and a rms position in the supply network. In a manufacturing supply chain, for example, raw materials may be considered inputs upstream, whereas seminished products may be considered inputs farther downstream. Ideally, inputs ow from the environment (i.e., supplier) to the focal rm as scheduled and in a desired quantity and quality thus contributing to negentropy. This ideal state of the system is altered when unexpected events (i.e., disruptions) interrupt the normal ow of goods (Svensson 2000; Hendricks and Singhal 2003; Kleindorfer and Saad 2005). These disruptions, which we dene as unplanned and unanticipated events that disrupt the normal ow of goods and materials within a supply chain (Craighead et al. 2007, 132), manifest themselves in various forms. Disruptions, for example, can be anything from a truck breaking down or a suppliers workforce going on strike, to extreme weather conditions that result in power outages or transportation issues. The impact of disruptions on a system varies depending on the level of resiliency within the supply chain.

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The resiliency of a supply chain and the recovery time from a disruption should be inversely related. In other words, as the resiliency of a supply chain increases the total recovery time decreases. A supply chains resiliency lies on a continuum and thus a supply network can be classied as being more or less resilient. A vulnerable (i.e., less resilient) supply chains operation is volatile because it does not possess the capabilities to continue operating when disruptions occur (She and Rice 2005). Therefore, the supply chain is vulnerable to disruptive events. Conversely, resilient supply chains have the ability to absorb or avoid disruptions entirely (She and Rice 2005). Certain supply design characteristics may impact supply resiliency. We incorporate the concepts of systems theory coupled with the structure of a supply chain (entities such as suppliers, manufacturers, and warehouses connected by ows of materials) to develop a framework for our ndings relative to supply resiliency reducers: 1. Flows, which are associated with activities (e.g., transportation) related to the extraction of inputs from the environment (Buckley 1967). 2. Flow units, which are the units (e.g., raw materials, subassemblies, nished products, service parts) that are extracted from the environment and are inputs to the focal rm (Bertalany 1950). 3. Source, which is the supply node in the environment where the inputs (i.e., ow units) originated (Scott and Davis 2003).

rate losses occurs, and (3) the rate at which the risk event is discovered. Implementing mitigation strategies on a timely basis after a disruption is discovered can signicantly reduce the overall impact (Craighead et al. 2007; Manuj and Mentzer 2008a). The longer it takes for a rm to execute mitigation strategies, the more time a disruption has to propagate, grow, and negatively impact rm performance. Barney (1991) describes three categories of resources that may be used to create capabilities. We use these categories to frame our results relative to supply resiliency enhancers: 1. Physical Capital Resources, which are tangible assets of the rm such as physical technology, equipment, and inventory (Williamson 1975). 2. Human Capital Resources, which are intangible assets of the rm such as management training, education, and experience (Becker 1964). 3. Organizational and Interorganizational Capital Resources, which are intangible assets of the rm such as the planning, controlling, and coordinating of systems or the relationships between the focal rm and rms within the environment (e.g., suppliers) (Tomer 1987). Barney (1991) contends that each resource category alone is not sucient to create unique capabilities. Therefore, interaction and coordination of all three resource categories are necessary to create eective mitigation tactics. A rm, for example, that routinely shares information among supply chain members may discover that a disruption has occurred, but then rely on a highly trained manager to select and execute the mitigation strategy. In this scenario, human capital resources are used in conjunction with organizational and interorganizational capital resources. Although we use the three above categories to frame our ndings relative to resiliency enhancers, we recognize that rms are heterogeneous relative to their resource endowments (Teece et al. 1997). More importantly, when rms discover resource gaps that need to be lled (Grant 1991) they may be somewhat limited relative to the speed at which the overall resource endowment may be altered. Teece et al. (1997, 514) state that resources capabilities are sticky in that rms are, to some degree, stuck with what they have and may have to live with what they lack. Notwithstanding this issue, rms can close resource gaps (Grant 1991) particularly in the longer run (Teece et al. 1997) and can quickly change the rate at which they commit investments (money and time) to obtain additional resources (Dierickx and Cool 1989). However, it is important to note that some resources may be more dicult and slower to be realized than others as rms strive to build resiliency.

Resource-based view Although supply chain disruptions are inevitable, organizations may be able to lessen the disruption severity via mitigation capabilities (e.g., Craighead et al. 2007) and thus enhance the resiliency of their supply chain. We use the RBV of the rm (Wernerfelt 1984; Barney 1991) to frame the mitigation capabilities. RBV, like systems theory, has been a widely utilized theoretical base in supply chain research (cf. Mentzer et al. 2004; Esper et al. 2007; Byrd et al. 2008). The RBV of the rm regards the rm as a collection of resources and capabilities that may culminate in enhanced performance (Wernerfelt 1984). Resources, which may be tangible (e.g., technology) or intangible (e.g., knowledge), and may be combined to create capabilities that determine how rms react to various internal and external threats and opportunities (Wernerfelt 1984; Barney 1991). For our research purposes, we view these capabilities, which may be dened as complex interactions and coordination of people and other resources (Grant 1991), as the mechanism to mitigate the potential impact of a disruption and thus enhance supply resiliency. This view is consistent with other researchers. For example, research has purported that the impact of a disruption is moderated when rms implement mitigation tactics before, or right after, a disruption occurs. Manuj and Mentzer (2008a), divide the speed of risk into three unique categories: (1) the rate of the event that leads in loss, (2) the

METHODOLOGY This study employed case research methodology (Eisenhardt 1989), which is a rigorous and well-established research method (Eisenhardt 1989; Yin 1994; Ellram 1996; Gibbert et al. 2008). The case research methodology was chosen because it is particularly well suited for conducting research

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in areas with little preexisting theory (Meredith 1998; Voss et al. 2002; Gibbert et al. 2008) and facilitates conceptual framework development by using data gathered through interactions with key informants (Mahapatra et al. 2010). Data for this study were gathered in two distinct phases that used multiple data sources and data collection methods. In the rst phase, we performed an in-depth investigation of a U.S.-based automobile manufacturer (Table 1). As noted in Voss et al. (2002) limiting the number of cases allows scholars to achieve depth, rather than breadth, of knowledge, which was our primary objective of this phase. Specically, we obtained insights from a major automobile original equipment manufacturer, two of its overseas rst-tier suppliers, and a key warehouse distribution center involved in global product ow. Consistent with other case-based research, such as Ellram and Siferd (1998), Esper et al. (2007), Mahapatra et al. (2010), and Wu and Choi (2005), we adhered to guidelines and protocols described in Yin (1994) and Eisenhardt (1989) and followed qualitative data analysis procedures outlined in Miles and Huberman (1994).

As discussed in Voss et al. (2002), it is extremely important to seek key informants who are knowledgeable about the phenomenon being investigated. Thus, consistent with traditional case-based research guidelines, key informants from the automobile manufacturer (hereafter referred to as AutoMfg) were carefully selected from various positions within the rm to provide a holistic perspective of the rms operations in light of disruptions and resiliency. We collected the majority of data on a multiday visit to AutoMfgs facility. Similar to the interviews conducted in Closs et al. (2008), Esper et al. (2007), and Wu and Choi (2005), each interview lasted between 45 and 90 min. The interviews were scheduled in intervals that enabled us to discuss the ndings and rene the interview protocol between sessions, which is common practice in case-based research while crafting instruments and protocols (Eisenhardt 1989; Stuart et al. 2002). The nal set of questions used to guide the interviews is shown in Appendix A. Triangulation, which is the use of multiple data sources to obtain a more comprehensive understanding of the

Table 1: Automobile manufacturer (AutoMfg) case studydata source, method, and content Position in supply chain AutoMfg focal entity Data source method Key informants: Semistructured interviews: Lasted 4590 min Conducted by face-to-face or by telephone with seven executives Archival records: Presentations by: Operations Manager Risk Analyst Two Purchasing Engineers Key informants: Semistructured interviews with Account Manager for AutoMfg Conducted by face-to-face or by telephone Archival records: Presentations by: Account Manager from AutoMfg Key informants: Semistructured interviews with Account Manager for AutoMfg Conducted by face-to-face or by telephone Archival records: Presentations by: Account Manager from AutoMfg Key informant: Written response to interview questions from the International Receiving Manager (Note: The manager requested to submit written responses instead of an interview) Data content Supply chain design characteristics that amplify or increase the impact of a disruption; mitigation strategies employed, and disruption recovery tactics used Risk identication assessment and classication Supply chain risk and disruption management strategies Supply chain risk management capabilities and activities International procurement and logistics process ows

First-tier supplier China

Supply chain design characteristics that amplify or increase the impact of a disruption; mitigation strategies employed, and disruption recovery tactics used

Product ow from suppliers facility to AutoMfg Supply chain disruption management strategies Supply chain design characteristics that amplify or increase the impact of a disruption; mitigation strategies employed, and disruption recovery tactics used

First-tier supplier South Korea

Product ow from suppliers facility to AutoMfg Supply chain disruption management strategies Supply chain design characteristics that amplify or increase the impact of a disruption; mitigation strategies employed, and disruption recovery tactics used

Distribution center East Cost of United States

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phenomenon under investigation (Ellram 1996; Stuart et al. 2002), is a key component of case research (McCutcheon and Meredith 1993; Yin 1994; Meredith 1998; Voss et al. 2002). Triangulation is commonly used to help establish construct validity in case study research (e.g., Bourgeois and Eisenhardt 1988; Ellram and Siferd 1998; Choi and Hong 2002; Manrodt and Vitasek 2004; Wu and Choi 2005; Smaros 2007) and is often considered to be a major strength of this research strategy (Yin 1994; Ellram 1996; Gibbert et al. 2008). More specically, triangulation helps overcome potential discrepancies or limitations in the data by combining multiple forms of data that measure the same phenomenon (Yin 1994; Gibbert et al. 2008). The use of data triangulation signicantly increases the reliability and rigor of the research ndings (McCutcheon and Meredith 1993; Ellram 1996). During this phase of the research, we extended great eorts to facilitate the triangulation process. First, we conducted semistructured interview sessions with personnel in a variety of functional areas such as logistics, procurement, operations, and risk management. Again, the interviews were scheduled in a manner that allowed us to debrief and rene the interview protocol between sessions (Eisenhardt 1989; Stuart et al. 2002). Second, we participated in presentations made by key personnel. The presentations addressed important aspects of AutoMfgs global procurement process and comprehensive risk management program. We were able to interact with the informants during their presentations, which enabled us to probe beyond the surface to obtain rich and more in-depth information. The presentations ranged from overviews of the global procurement and logistics processes ows to risk management capabilities and activities. Finally, we were able to examine archival records and directly observe risk mechanisms that AutoMfg utilized. After reaching the point of theoretical saturation with AutoMfgs key informants, which is when collecting additional data yields no new insights (Eisenhardt 1989), we then gathered data from two of their rst-tier suppliers. The suppliers were responsible for providing items in dierent procurement categories and were based in separate countries. One supplier was based in Korea and the other supplier was based in China. Key informants from each of the rst-tier suppliers participated in semistructured interviews, which were guided by the same set of questions that were employed during the interviews with AutoMfgs key informants. Both rst-tier suppliers also made presentations relative to the ow of products and disruptions risk management. Once again, these presentations were interactive in nature and thus allowed us to probe for critical insights into the research questions initially identied. All interactions with AutoMfgs two rst-tier suppliers took place at AutoMfgs facility and were conducted in English. Finally, we obtained insights from a key warehouse distribution center located on the East Coast of the United States. We were unable to conduct interviews with key informants at the distribution center; however, they responded to the interview questions in written format. We also had several conference calls with key personnel at AutoMfg both before and after the on-site visit to clarify and conrm information. Consistent with other case study research (e.g., Bourgeois and Eisenhardt 1988),

we adhered to guidelines outlined by Eisenhardt (1989) and Voss et al. (2002) by having two of the researchers involved in each interview and presentation. As noted by Eisenhardt (1989) and Miles and Huberman (1994), having two researchers involved in the data collection process is advantageous for several reasons. First, complementary insights can be captured, which increases the creative potential of the study (Eisenhardt 1989, 538). Second, having multiple investigators enables convergence of observations and thus enhances condence in the ndings (Eisenhardt 1989, 538). Every session was recorded with a digital voice recorder (Bourgeois and Eisenhardt 1988; Yin 1994; Voss et al. 2002). The recordings were used to clarify and validate the data when necessary. We followed the 24-hr rule recommended by Yin (1994) and utilized by Bourgeois and Eisenhardt (1988) that requires all notes relating to interviews and presentations be transcribed within one day of the data collection. After the on-site data collection process, we reviewed the data and rened our notes, which enabled us to integrate the ndings from each source in a comprehensive manner. The second phase of this study consisted of semistructured telephone interviews with executives at six rms in various industries (Table 2). The primary objective of this phase was to obtain breadth, rather than depth, of knowledge. As suggested by Eisenhardt (1989) and McCutcheon and Meredith (1993), theoretical sampling was employed to strategically select rms with an assorted collection of product ow and supply chain design characteristics. Theoretical sampling is commonly used in case study research and is consistent with several case-based research studies, including Choi and Hong (2002), Closs et al. (2008), and Wu and Choi (2005). By selecting rms from dierent industry sectors that occupied a variety of positions along a supply chain, we were able to obtain various perspectives on the interview questions. All executives interviewed were responsible for managing their rms product ow from various overseas suppliers and held titles, such as Senior Manager of Import Operations, Director of Global Distribution, and Chief Operating Ocer. The interview questions and data collection procedures employed in phase 1 were also used in this phase. Two researchers, for example, participated in each interview, subsequently transcribed their notes, and discussed the ndings via phone after every session (Bourgeois and Eisenhardt 1988; Eisenhardt 1989; Voss et al. 2002). These debriengs were conducted within a 12-hr period following the interview and thus adhered to the 24-hr rule (Bourgeois and Eisenhardt 1988; Yin 1994). Once all phone interviews were complete, we met face-to-face to organize and analyze the data to identify key ndings within and across each interview (Jick 1979; Eisenhardt 1989). When we reached the point of theoretical saturation (Eisenhardt 1989), we stopped collecting data. Although there is no exact number of cases that should be included in a study, generally 410 cases are ideal (Eisenhardt 1989). In case study research, however, it is not the number of cases that is important, but rather that the researcher continues collecting and analyzing data until they reach theoretical saturation (Eisenhardt 1989). In fact, rigorous case-based research has been conducted with a wide variety of cases, including a single case (Boyer et al. 2002;

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Table 2: Phase 2 interview participantsrms, executives, and company proles Informants corporate title Director of Global Distribution

Firm PharMfg (pharmaceutical manufacturer)

Company prole International pharmaceutical company that manufactures prescription medication, consumer health products, and vaccines Workforce consists of 100,000+ employees with manufacturing facilities in Ireland, Singapore, and the United Kingdom Government agencies heavily regulate supply chain Vertically integrated supply chain Supply chain security a major issue Product: Long development times, small size, high costs U.S.-based mass merchandise retailer with 1,200+ stores in the United States Imports 24% of merchandise from 60+ countries Experiences large seasonal demand uctuations Large discount retailer with 2,000+ stores in the United States Workforce consists of 25,000+ employees Imports 50% of merchandise from overseas, majority (80%) of imports come from China U.S.-based retailer with 1,500+ stores in the United States Imports 10% of merchandise from 35 counties, majority (80%) of imports come from the Asia basin International logistics provider with 300+ warehouse and oce locations Workforce consists of 10,000+ employees Provides distribution, freight forwarding, warehousing, and supply chain management consulting assistance services International end-to-end logistics provider who operates in 214 counties Provides wide range of services from single package shipments to third-party logistic solutions theory-building software, for example, assists researchers in developing data categories and visualizing relationships between categories (Lewins and Silver 2004). Alternatively, more text-based qualitative software packages provide insight into natural language processing and focus more on grammatical and semantic information embedded in both unstructured and structured text (Lewins and Silver 2004). To ensure our understanding of the data was not restricted by a particular software program, we choose to code the data according to guidelines outlined in Miles and Huberman (1994). Furthermore, qualitative software packages may require a high degree of familiarization and are unable to incorporate aspects of the surrounding context in the analysis of the data (Bezborodova and Bennett 2004). The coding process plays an instrumental role in qualitative data analysis and thus, in order to preserve to context surrounding the quotes and remain connected to the data, we followed guidelines put forth by Miles and Huberman (1994) to develop a deeper and more holistic understanding of the data. Although a distinct form of qualitative research, the case study method shares certain similarities with grounded theory. Data for case studies and grounded theory, for example, come from similar sources, such as interviews, observations, and archival records (Eisenhardt 1989; Yin 1994; Strauss

Retailer1

Senior Manager, Import Operations

Retailer2

Chief Logistics Ocer

Retailer3

LogProvider 1 (logistics provider 1)

Vice President, International Supply Chain Chief Operating Ocer

LogProvider 2 (logistics provider 2)

Manager of Latin American Operations

Manrodt and Vitasek 2004; Esper et al. 2007), three cases (Choi and Hong 2002; Grutter et al. 2002), four cases (Bourgeois and Eisenhardt 1988; Smaros 2007), six cases (Closs et al. 2008), eight cases (Wu and Choi 2005), and 11 cases (Ellram and Siferd 1998). The data collected from both phases were analyzed according to a three-step process outlined by Miles and Huberman (1994), which is widely used in case study research (e.g., Wu and Choi 2005; Closs et al. 2008). Step 1 consisted of rst-level coding to summarize and describe the data. Step 2 consisted of pattern coding to reduce the data by grouping similar codes and descriptions. The coding criteria employed in step 2 are listed in Appendix B. Step 3 consisted of arranging ndings into empirical generalizations that explain why certain supply chain characteristics contribute or take away from supply resiliency. We considered using qualitative software analysis programs, such as NUD.IST (QSR International Pty Ltd, Melbourne, Australia), Atlas.ti (Atlas.ti Scientic Software Development GmbH, Berlin, Germany), and MAXQDA (2010 version; VERBI GmbH, Berlin, Germany), to facilitate the coding process. There are numerous types of qualitative software packages available depending on the primary objective of the research (Lewins and Silver 2004). Code-based

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and Corbin 1998). While the primary objective of grounded theory is to develop theory (Glaser and Strauss 1967; Corbin and Strauss 2008), case studies can also be employed to generate theory (Eisenhardt 1989; Yin 1994). The grounded theory approach to qualitative research can be seen as lying on a continuum. On one end, researchers collect and analyze data without any a priori assumptions (Glaser and Strauss 1967; Glaser 1992; Locke 1996). With this approach to grounded theory, the phenomenon under investigation completely shapes the theorizing process (Glaser and Strauss 1967; Glaser 1992; Locke 1996). On the other end of the continuum, it is believed that researchers can gain deeper insights into the data by allowing a priori theory to help guide the data collection and analysis (Locke 1996; Strauss and Corbin 1998). The latter approach to grounded theory is more structured and shares numerous similarities with the case study method, which was employed in this research.

RESULTS The results of the analysis yielded six sets of empirical generalizations in two major areas. The rst three sets of empirical generalizations are related to factors that reduce the impact of a disruption and thus contribute to supply resiliency. As a reminder, we refer to these as supply resiliency enhancers. The last three sets of empirical generalizations are related to factors that amplify the impact of a disruption and thus take away from supply resiliency. Again, we refer to these as supply resiliency reducers. When presenting the results we enfold literature (Eisenhardt 1989) into the discussion when appropriate. This allows the research ndings to be compared with extant literature to provide a deeper and more holistic understanding (Eisenhardt 1989). Resiliency enhancers Analysis of the data revealed a variety of factors that can enhance supply resiliency (Table 3). We divided these resiliency enhancers into three main categories including human capital resources (Becker 1964), organizational and interorganizational capital resources (Tomer 1987), and physical capital resources (Williamson 1975), which is consistent with the RBV of the rm (Barney 1991). Human capital resources The data analysis culminated in an assortment of human capital factors (Becker 1964) that can increase supply resiliency. These factors involved the knowledge and training of employees, understanding the total cost of supply chain management, and the ability to conduct an eective postdisruption analysis. Education and training of supply chain employees was identied by six of the seven rms as playing a major role in increasing supply resiliency. LogProvider1, for example, discussed how supply chains are extremely complex systems and thus managers must be uent in all aspects of the supply chain. Similarly, Retailer2 stated that educated employees are key for eectively managing supply chain disruptions. The proper education and training of supply chain managers

equips them with the necessary skills to know when it is appropriate to take action. The action performed may be communicating with rms in other areas of the supply chain, locating inventory throughout the supply chain, or implementing employee overtime. The most eective action considering a variety of factors (i.e., the type of disruption, characteristics of the supply chain, resources available, etc.) is determined by managers employing knowledge acquired through training and drawing on their past experiences. When a disruption occurs, for example, trained and experienced managers will probably stabilize the supply chain more quickly than managers without training and experience. Four of the seven rms noted the importance of employees having a comprehensive understanding of cost benet trade-os when managing risks in a supply chain. AutoMfg specically noted that supply chain managers must understand cost benet trade-os in order to eectively handle supply chain disruptions, which has also been highlighted in the literature (e.g., Miemczky and Holweg 2004; Hale and Moberg 2005; Meepetchdee and Shah 2007; Manuj and Mentzer 2008b). AutoMfg, for example, attempted to buer against shipments not arriving on time by holding six weeks of inventory for all globally sourced parts. Although holding excess inventory is a commonly used approach to guard against disruptions (Ho 1992), there is certainly a hefty cost associated with this mitigation strategy. In todays economy, supply chain managers have limited resources and thus must carefully decide how and where to allocate them (Chopra and Sodhi 2004). Obtaining a holistic understanding of how costs are related will enable managers to systematically combine nancial resources and thus be able to more eectively manage supply chain disruptions. Postdisruption analysis was identied by four of the rms as a primary factor in enhancing supply resiliency. When a disruption is handled successfully, rms should probe beyond the surface to understand how and why it was handled in a successful manner. Managers, for instance, should ask themselves was communication eective throughout the supply chain and what mitigation strategies were employed? Conversely, when a disruption is handled in a suboptimal manner, lessons should be captured and disseminated throughout the supply chain. Firms that learn from postdisruption feedback are generally better equipped to handle future supply chain disruptions. Hence: EMPIRICAL GENERALIZATION 1: Human capital enhancers are positively related to supply resiliency. Empirical generalization 1a: Supply chain education and training are positively related to supply resiliency. Empirical generalization 1b: Understanding cost benet trade-os are positively related to supply resiliency. Empirical generalization 1c: Postdisruption feedback is positively related to supply resiliency.

Organizational and interorganizational capital resources In addition to human capital resources, organizational and interorganizational capital resources (Tomer 1987) can also

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Table 3: Supply resiliency enhancers: coding Supply resiliency enhancers PharMfg AutoMfg X Retailer1 X Retailer2 X Retailer3 X LogProvider1 X LogProvider2 X

Human capital resources Education and training of employees to execute supply chain contingency plans Employees understanding of cost benet trade-os when managing risk in a supply chain Ability to perform postdisruption analysis Organizational and interorganizational capital resources Dened communication protocols Cross-functional supply chain risk management teams Predened and or self-executing contingency plans Partnering with customs programs (such as C-TPAT) and or developing port diversication plans Developing supplier relationship management programs Physical capital resources Use of safety stock Increased visibility in the supply chain Exception reporting systems and predictive tools for early awareness of impending disruptions Risk monitoring systems for each node (i.e., rm) in the supply chain Ability to quickly redesign the supply chain

X X X X X X

X X

X X X

X X X

X X X X

X X X

X X X

X X X

X X X

X X X

X X

Note: PharMfg, pharmaceutical manufacturer; AutoMfg, automobile manufacturer; LogProvider 1, logistics provider 1; LogProvider 2, logistics provider 2.

increase supply resiliency. These factors center on intangible assets, such as interactions between groups within the rm and relationships between the focal rm and other rms within the supply chain, such as suppliers (Barney 1991). Organizational and interorganizational capital resources revealed during the data analysis include well-dened communication networks, cross-functional risk management teams, predened contingency plans, partnering with customs programs and creating port diversication plans, and developing supplier relationship management programs. Six of the seven rms stressed the need to have communication protocols predened so when a disruption occurs managers are cognizant of who to contact and how to com-

municate (i.e., phone, email, fax). Having well-dened communication channels eliminates confusion and can help prevent costly delays in deploying mitigation tactics as information is quickly and eciently distributed (Fugate et al. 2009). AutoMfg, for example, discussed the importance of well-dened communication protocols. Likewise, cross-functional risk management teams were identied by six rms as playing a large role in enhancing supply resilience. Risk management teams that are crossfunctional in nature are able to optimize the entire supply chain rather than small portions of the supply chain and thus eliminate potential bottlenecks in the system. Crossfunctional risk management teams also help avoid a silo

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mentality and enable rms to stabilize their supply chain after a disruption quickly and more eciently. Five of the seven rms discussed the value of developing and practicing contingency plans in anticipation of a disruption as means to help reduce response time. Several rms also mentioned self-executing plans, which are plans that are automatically triggered when a disruption occurs without human intervention. Practicing contingency plans can help reduce mistakes and developing self-executing plans enable rms to deploy mitigation strategies quickly, thereby increasing supply resiliency. Five rms also discussed the importance of utilizing customs programs such as Customs-Trade Partnership Against Terrorism (C-TPAT) to reduce the variability and length of time it takes for goods to pass through customs. As a means to avoid stringent customs policies and to help diversify risk in case of port closure or congestion, some rms were in the process of developing port diversication plans. Retailer1, for example, implemented a port diversication plan to reduce the likelihood of disruptions in the ow of goods through U.S. ports. Partnering with customs programs and developing port diversication plans can help streamline the throughput of goods into and out of countries and thus eliminate potential bottlenecks in a supply chain. All rms stressed the need to develop supplier relationship management programs to mitigate the exposure of risks from suppliers. When discussing sources of risk in a supply chain, AutoMfg stated their suppliers are their number one worry. Some rms discussed developing higher levels of trust with their key suppliers while other rms stressed the importance of understanding supplier capacity restrictions as well as options for alternative suppliers. Hence: EMPIRICAL GENERALIZATION 2: Organizational and interorganizational capital enhancers are positively related to supply resiliency. Empirical generalization 2a: Dened communication networks are positively related to supply resiliency. Empirical generalization 2b: Cross-functional risk management teams are positively related to supply resiliency. Empirical generalization 2c: Developing and practicing contingency plans (including self-executing plans) are positively related to supply resiliency. Empirical generalization 2d: Partnering with customs programs and developing port diversication plans are positively related to supply resiliency. Empirical generalization 2e: Developing supplier relationship management programs are positively related to supply resiliency.

bility to quickly redesign the supply chain when disruptions occur. Five of the seven rms discussed holding safety stock throughout the supply chain as a primary strategy to mitigate the impact of disruptions (Ho 1992). Pharmaceutical manufacturer (PharMfg) noted that they rely heavily on safety stock to reduce the likelihood of lost sales due to stock outs, which are extremely costly because of the high prot margins on many pharmaceutical products. One manager stated: Making a sale has always been more important than the amount of inventory you hold because of the margins we work with. The margins are so huge that every sale adds dollars to the bottom line. While carrying high levels of inventory throughout the entire supply chain can actually decrease resiliency (Giunipero and Eltantawy 2004), understanding where inventory should be strategically placed, in what form it should be held, and how much is necessary can give a company a competitive advantage and can increase their supply resiliency. All seven rms discussed the need for increased visibility within the supply chain. AutoMfg noted that managing a supply chain with limited visibility is a particularly challenging task (Lorentz et al. 2007) and stated: Theres one thing I know that we struggle withthat is visibility into our Tier 2 suppliers.We know when theyre shipping their seats to usbut we dont know who the supplier buys the leather from or some of the electronicswe dont know where they areand if their Tier 2 has a serious failure Increasing the visibility within a supply chain can reveal where resources are located, where risk is present, and how disruptions propagate throughout the supply chain. Understanding these factors can help rms manage disruptions more eectively because they know how the supply chain is designed, how the system reacts to various external inuences, and where inventory is located. Six rms highlighted the need for systems that help them monitor their supply chains in real-time to be able to make strategic decisions to avoid impending disruptions. Retailer3, for example, noted that a real-time, end-to-end supply chain wide monitoring system would be particularly valuable in helping them manage their supply chains. Implementing control limits or exception reporting (i.e., agging activities when they fall outside acceptable limits) was discussed as a means to helps rms engage in reactive disruption discovery because supply chains are simply too large and complex to track each individual event. Conversely, Retailer2 monitors their supply chain and attempts to predict disruptions by closely following issues, such as labor negotiations, trade contracts, and regulatory changes. A manager from Retailer2 stated: My expectation for my sta is that they are well read and they stay up with what is going on in the

Physical capital resources Physical capital resources (Williamson 1975), which consists of tangible assets, also contribute to supply resilience. These factors include the use of safety stock, technologies that increase visibility within the supply chain, systems that monitor the supply chain and predict weak areas, the ability to manage risks at individual nodes (i.e., rms), and the capa-

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industrywhat is happening with labor negotiations in the east coast? What is happening with trade relations with China? Five of the seven rms noted the importance of monitoring individual nodes within a supply chain in order to predict disruptions. Both Retailer1 and PharMfg, for example, receive weekly updates from each rm in their supply chains on issues related to transportation carriers, seaports, security, and regulations in attempt to anticipate disruptions. Monitoring the entire supply chain, as well as individual nodes, can reveal where a supply chain is most susceptible to risks and can help rms predict disruptions before they occur. Strategies that help rms discover disruptions or are able to give warning signs before a disruption occurs allow rms to recover faster and enable them to employ tactics to avoid disruptions altogether. Four rms discussed the need to be able to quickly redesign their supply chains to reduce the impact of disruptions. AutoMfg highlighted a particular incident when a tornado damaged one of their manufacturing plants. They were unable to quickly reroute materials from upstream suppliers to other manufacturing facilities, which signicantly increased the detrimental impact of the disruption to the supply chain. To eectively handle disruptions, a rm must understand the design of their supply chain from beginning to end, which was noted when one manager stated, When a node becomes a bottleneck, you need to be able to quickly re-route and ramp up at other nodes. The ability to quickly redesign a supply chain facilitates a rms recovery from disruptions and thus may increase the supply chains resiliency. Hence: EMPIRICAL GENERALIZATION 3: Physical capital enhancers are positively related to supply resiliency. Empirical generalization 3a: Safety stock is positively related to supply resiliency. Empirical generalization 3b: Visibility in the supply chain is positively related to supply resiliency. Empirical generalization 3c: Monitoring systems and other predictive risk tools are positively related to supply resiliency. Empirical generalization 3d: The ability to monitor risk at individual nodes (i.e., rms) in the supply chain is positively related to supply resiliency. Empirical generalization 3e: The ability to quickly redesign a supply chain is positively related supply resiliency.

ow units (i.e., the node from where the ow unit originated) (Scott and Davis 2003) (Table 4). Flow activities Factors related to the ow of material between nodes may signicantly reduce supply resilience (Buckley 1967; Svensson 2003). These factors include the number of nodes in the supply chain, presence of regulation and security issues, and congestion of ports and vessel capacity restrictions in the supply chain. Four of the seven rms noted that the number of nodes in a supply chain and the systems resiliency are inversely related. That is, as the number of nodes increase, the supply chain becomes longer and more complex, which increases the amount of time it takes for materials to ow through the supply chain and thus reduces the systems responsiveness and resiliency (Rahman 2002). Five rms noted that the presence of security and customs regulations also have a negative impact on supply resiliency because additional precautions (i.e., security check points) are typically put in place that increase the amount of time it takes for materials to ow through a supply network. LogProvider2, for example, revealed the primary bottleneck and main source of disruptions in the ow of products into countries is getting goods through customs and stated, One of the biggest drivers of supply chain disruptions is customs issues around the world. Four of the seven rms discussed how port congestion and vessel capacity restrictions can reduce supply resiliency. Retailer2, for example, noted that vessel capacity during peak season out of China has become a critical problem and stated: During a typical retail peak season, because there is so much merchandise being shipped out of China, sometimes there are problems associated with vessel capacity and availabilityit becomes cumbersome to get space. As ports and vessels reach their maximum capacities, it will take longer to get items into a country and it will become more challenging to move materials through the system, which may reduce supply resiliency. Hence: EMPIRICAL GENERALIZATION 4: Flow activity reducers are negatively related to supply resiliency. Empirical generalization 4a: The number of nodes in the supply chain is negatively related to supply resiliency. Empirical generalization 4b: Stringent security and customs regulations are negatively related to supply resiliency. Empirical generalization 4c: Port and vessel capacity restrictions are negatively related to supply resiliency.

Resiliency reducers In addition to discovering factors that can increase supply resiliency, factors having the opposite eect were also revealed (Table 4). We divided these resiliency reducers into three main categories including ow activities (i.e., actions required to move materials from one node to another) (Buckley 1967), ow units (i.e., items materials that ow through a supply chain) (Bertalany 1950), and source of

Flow units Factors related to the product itself (i.e., ow unit) can also reduce supply resiliency (Bertalany 1950). These factors include the complexity of the product as well as stringent storage and quality requirements, which make it more dicult to source and move products through a supply chain.

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Table 4: Supply resiliency reducers: coding Supply resiliency reducers Flow activities Number of nodes in the supply chain Stringent customs regulations and security issues Port congestion and vessel capacity restrictions Flow units Product complexity (number of and uniqueness of parts and need for proprietary technology) Stringent quality and storage requirements Source of ow units Volatility of suppliers location (e.g., political uncertainty or natural disasters, such as tsunamis) and or supplier clusters Limitations on supplier manufacturing capacity and labor availability PharMfg X X AutoMfg X X X Retailer1 X X X X X Retailer2 Retailer3 LogProvider1 LogProvider2 X X X

Note: PharMfg, pharmaceutical manufacturer; AutoMfg, automobile manufacturer; LogProvider 1, logistics provider 1; LogProvider 2, logistics provider 2.

Six of the seven rms discussed how complex products (i.e., products that are dicult to produce, unique or challenging to source, and or required some sort of proprietary technology) make it more dicult to manage risk in a supply chain. Characteristics of complex products result in a longer and typically more dicult recovery from a supply chain disruption. AutoMfg specically noted the challenges associated with complex parts: Unfortunately in automotive a lot of our stu is like that: cant be resourced, long lead time, there is no alternative and its extremely complexI would say an example thatthink about the instrument panel of the front dash board of your car.so theyre (suppliers) are doing a lot of module assembly and they just give you the module and how do you go to somebody else to get that done if theres a problem. You cant. And they may have the patent, some legal barriers and you run into this overseasif youre buying something specialized you know all bets are o. Four rms noted that stringent storage and or quality requirements of materials can signicantly reduce supply resiliency. A particularly vulnerable component or a part that requires cold storage, for instance, is more dicult to move in a supply chain than one with no requirements. Rigid storage and quality requirements may make it more

dicult to recover from supply chain disruptions due to the added precautions and specic needs of the product. Hence: EMPIRICAL GENERALIZATION 5: Flow unit reducers are negatively related to supply resiliency. Empirical generalization 5a: Product complexity is negatively related to supply resiliency. Empirical generalization 5b: Stringent storage and quality requirements are negatively related to supply resiliency.

Source of ow units Factors related to the source of the ow unit can negatively impact supply resilience (Svensson 2000; Scott and Davis 2003). These factors include the volatility of the suppliers location and issues related to labor and manufacturing capacity at the suppliers facility. Five of the seven rms noted that suppliers who are located in risk prone areas and or are geographically clustered increase the likelihood of disruptions within a supply chain. Retailer2, for example, stated that the clustering of suppliers increased the severity of disruptions within their supply chain. Several rms noted that suppliers are enticed by factors such as cheap labor to locate in geographically unstable areas of the world (Manuj and Mentzer 2008a). AutoMfg discussed how they are more concerned about

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regional disruptions, which aect a cluster of suppliers, rather than disruptions that impact individual suppliers. Regional disruptions can manifest themselves in various forms, such as extreme weather conditions (i.e., tsunamis) or political uncertainty, which was specically highlighted by AutoMfg as a source of recent regional disruptions within their supply chain. One manager stated: I would say that concentration (of suppliers) in a point is importantYou have a lot of suppliers in one region and then something happens to that region. It really is regional disruptions you worry about more than a specic supplier. Four rms discussed that restrictions on a suppliers ability to produce goods, which includes manufacturing capacity and labor availability, negatively impacts supply resiliency. Retailer1, for example, noted that all their suppliers are prequalied and are required to specify their maximum manufacturing capacity in order to reduce the likelihood of disruptions. Likewise, Retailer2 discussed the importance of monitoring labor issues in the supply chain. Hence: EMPIRICAL GENERALIZATION 6: Source reducers are negatively related to supply resiliency. Empirical generalization 6a: The volatility of a suppliers location and supplier clusters are negatively related to supply resiliency. Empirical generalization 6b: Limitations on supplier capacity and labor availability are negatively related to supply resiliency.

DISCUSSION AND CONCLUSIONS In todays highly competitive global business environment, having a resilient supply chain should give companies a competitive advantage and therefore building a resilient supply chain should be a strategic initiative (She and Rice 2005). A number of scholars note the importance of increasing

resiliency within a supply chain (e.g., Zsidisin and Ellram 2003; Zsidisin et al. 2004, 2005a; She and Rice 2005), but the literature on how to increase resiliency is fragmented and provides a more general overview of supply resiliency. Because a systematic investigation that operationalizes the concept of resiliency has not been performed, specic strategies that increase supply resiliency are unknown and thus companies have little guidance on which tactics are most eective. This study attempts to ll that gap in the literature and provides both research and managerial implications. The main research contribution of this study is an empirically derived framework of supply resiliency (Figure 1). Systems theory (Bertalany 1951) and the RBV of the rm (Barney 1991) are used to ground this research and thus provide a solid theoretical foundation for the framework. Systems theory (Bertalany 1951) is employed to capture essential components of open systems including ows (Buckley 1967), ow units (Bertalany 1950), and sources of ow units (Scott and Davis 2003). The components of open systems both individually and collectively detract from supply resiliency and thus may act as resiliency reducers. Firms may be able to moderate the impact of resiliency reducers. However, resiliency reducers may fall outside a rms control (such as customs regulations) and therefore it could be more eective for rms to focus on developing resiliency enhancers. Resiliency enhancers are created by combining both tangible (i.e., physical capital resources) (Williamson 1975) and intangible resources (i.e., human capital) (Becker 1964) and organizational and interorganizational capital resources (Tomer 1987), which is consistent with the RBV of the rm (Barney 1991). Several empirical generalizations were derived from the research ndings that address specic characteristics that may enhance or reduce supply resiliency. While it may be possible to test all six sets of empirical generalizations in a single large-scale empirical study, modeling the various interactions between variables could become extremely complex and could culminate in a lengthy survey instrument. Further, there may be moderating eects both within and between each enhancer or reducer. Each resource, for example,

Figure 1: Framework of supply resiliency.

Education and Training Cost/Benefit Knowledge Post-Disruption Feedback

Number of Nodes

Human Capital Resources

Flow Activities

Stringent Security and Customs Regulations Port/Vessel Capacity Restrictions

Communication Protocols Cross-Functional Risk Management Teams Contingency Plans Customs Programs/Port Diversification Plans Supplier Relationship Management

Organizational & Interorganizational Capital Resources

Enhancers

Supply Resiliency

Reducers

Flow Units

Product Complexity Stringent Storage/Quality Requirements

Safety Stock Visibility Tools Node Monitoring/ Exception Tools Redesign Tools

Physical Capital Resources

Sources of Flow Units

Volatility of Suppliers Location Supplier Capacity/Labor Restrictions

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consists of factors (e.g., education and training, supply chain knowledge, and postdisruption feedback) that interact to create individual resource categories (i.e., human capital resources). The resource categories then interact among themselves to enhance supply resiliency. Consequently, interactions between factors within one resource category may aect interactions between resource categories. In sum, the complexity of the interaction among variables may make it challenging, if not impossible, to capture all the interactions in one broad study. Multiple investigations may be necessary so researchers are able isolate and control certain variables while manipulating others. One study, for instance, could focus on human capital resources by building on the extant research on strategies to build and management knowledge in supply chains (e.g., Craighead et al. 2009; Fugate et al. 2009). We also believe a particularly fruitful investigation is to analyze the level of resiliency within supply chains and performance via a longitudinal study. For example, researchers could capture the level of resiliency within each supply chain at the beginning of the study. The supply chains could be monitored over a certain period, which would allow researchers to observe how resilient supply chains respond to disruptions compared to nonresilient supply chains. Researchers could also compare the outcome of specic disruptions to quantify the value of supply resiliency. While the resiliency framework (Figure 1) lays the groundwork for a series of research studies, we believe it also oers practical implications. For example, managers could use the framework to assess the current level of supply resiliency in their supply chains or, more realistically, segments of their supply chains. In essence, the framework could be converted to a type of supply resiliency scorecard. Managers could then summarize their resiliency assessments into a supply resiliency matrix (a possible matrix is shown in Figure 2) that captures the various levels of risk in their supply chain. Each quadrant in the matrix captures a level of resiliency inherent in the supply chain, and more importantly, could serve as a basis to prioritize supply resiliency building eorts.

Figure 2: Supply resiliency matrix.

Vulnerable supply chains, which have low resiliency enhancers and high resiliency reducers, are the most problematic and thus warrant the majority of a rms attention and resources. These supply chains are particularly vulnerable and even minor disruptions may have a severe impact on the rms operations. Volatile supply chains have high resiliency enhancers and high resiliency reducers, which makes them extremely unpredictable and hard to manage. When a disruption occurs in a volatile supply chain, for example, the system may absorb the disruption one time and experience severe repercussions the next. Conversely, sensitive supply chains have low resiliency enhancers and low resiliency reducers. While this may not appear to be problematic, supply chains are complex systems (Levy 1994; Choi and Krause 2006) and thus even small disruptions could increase in severity and propagate both upstream and downstream within the supply chain (this is consistent with the concept of the sensitivity to initial conditionscf. the literature on complexity chaos theory). Resilient supply chains have high resiliency enhancers and low resiliency reducers, which is the ideal situation. Resilient supply chains are able to absorb disruptions and return to stable conditions quickly (She and Rice 2005), which could give companies a unique competitive advantage. We believe that the framework (Figure 1) and matrix (Figure 2) are versatile in that they are not industry specic and can be employed to determine the level of supply resiliency in certain segments of supply chains (i.e., for particular countries or regions of the world) or for specic product ows (i.e., mission-critical items). The framework and matrix can serve as tools for managerial decisions relative to supply resiliency within a rms supply chain. Of course, supply chains are dynamic and therefore, the supply resiliency matrix typology should be revisited when necessary. Clearly, much more research is needed to further investigate the insights provided by the frameworkthis framework should serve as a starting point for future research on supply resiliency and we certainly do not claim that it is comprehensive or conclusive. In addition to the future research needs discussed above, future studies can branch o in a number of dierent directions. Some of the possible research examinations include, but are not limited to the following: The empirical generalizations proposed in this study should be further investigated across multiple service and or manufacturing sectors with the intent of capturing new insights on both supply resiliency enhancers and reducers. The empirical generalizations lend themselves to be tested by a variety of research methods, several of which were highlighted above. Future research should analyze various company and supply chain contextual variables in light of our ndings. It would be quite valuable to investigate if how these strategies practices aect our proposed supply resiliency enhancers and reducers. In our study, we captured resources that impact resiliency. Future research should examine the process, including cost benet issues, of if how rms can close

Resiliency Enhancers High

Volatile Supply Chain

Resilient Supply Chain

Low

Vulnerable Supply Chain

Sensitive Supply Chain

Resiliency Reducers High Low

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resource gaps. As we previously discussed, resource stickiness will likely be an issue. While our intent was to be more inclusive relative to the enhancers and reducers, future research should scrutinize each and every factor. It is likely that some factors will play a much larger role in building resiliency than the others. A factor that did not surface in the research ndings, but could be investigated in future research studies is the connectivity of nodes via information sharing. Researchers, for example, could investigate the impact information sharing across cultures has on mitigating or enhancing risk within a supply chain. Findings from this study are particularly important in todays global business environment where rms are more likely to source from companies in foreign counties and thus face cultural dierences on a daily basis both within and between rms. Related to the issue directly above, the blank spaces in Tables 3 and 4 need to be thoroughly examined. We believe investigating this studys ndings from a why not perspective could provide fascinating new insights, such as why certain resources were allocated in supply chains with various product characteristics (e.g., high-cost products, products with stringent storage requirements, or highly complex products). A fruitful next step could be matching product characteristics and resource allocation for optimal supply resiliency and thus enhanced supply chain performance. Although not directly captured from the research ndings, we suggest there may be interaction eects (shown by dotted-line in Figure 1) among both the reducers and enhancers. In the latter case, this would be consistent with the concept of complementarity (i.e., synergycf. Zhu 2004) between a rms internal resources. Complementarity between resources arises when enhancing one resource also increases the value of the other resources (Zhu 2004). Further investigation is necessary to determine if complementarities among a rms enhancement resources exist.

desirable responses. However, conducting interviews via telephone could be a potential limitation of the study because we were not able to observe nonverbal channels of communication (Berg 2003). Employing multiple data sources and data collection methods helped mitigate these potential limitations and allowed this study to provide a more holistic perspective of supply resiliency that spans across industry sectors. Research on supply chain disruptions and corresponding strategies that increase resiliency is still in its infancy and thus a considerable amount of work remains to be done in this area (e.g., Hallikas et al. 2002; Zsidisin and Ellram 2003; Braunscheidel and Suresh 2009). We hope our eorts in this research help to ll this gap and contribute the supply resilience body of knowledge.

APPENDIX A: FINAL INTERVIEW PROTOCOL 1. Please provide a brief description of your international supply chain design (location of overseas sources and general ow of information and material ow). 2. What supply chain product characteristics amplify the potential for, or impact of, the disruptions? 3. What characteristics are common among severe disruptions? 4. How does a rm quickly discover the disruption and or the event that will trigger the disruption? What are the key metrics available to detect early warning signals? 5. Given the discovery of the disruption event, how does a rm eciently assess what areas of the supply chain will be aected by the disruption? 6. In general, what are the alternative activities and mechanisms that may be employed to deal with disruptions? 7. What are the primary barriers to an eective disruption recovery? What are the technology, personnel, and decision-making processes enablers of an eective recovery program? 8. How can the supply chain be redesigned to minimize the potential for, and impacts of, disruptions?

In sum, the ndings from this study provide guidance on strategies that may increase supply resiliency and lay the foundation for future research, but certain limitations do exist. First, although interviews provide rich data, interviewees are susceptible to natural human biases (Berg 2003; Alvesson 2003). Conducting interviews with the automobile manufacturers rst-tier suppliers on-site at the manufacturers location, for example, may have inuenced the informants to provide socially desirable answers. Providing socially desirable responses, however, is a limitation in regard to all interviews (Berg 2003; Alvesson 2003) and is not a unique limitation of this study. To reduce this potential bias, a future research opportunity could be to conduct interviews with suppliers at their own facility or at a neutral location. Additionally, in the second phase of the study, we conducted interviews via telephone, rather than face-to-face. Removing the face-to-face interaction and allowing respondents to be interviewed in the privacy of their oce may have reduced the desire of informants to provide socially

APPENDIX B: CODING CRITERIA Enhancer Categories (Barney 1991) (P) Physical Capital Resources are the tangible assets of the rm including physical technology, facilities, equipment, and inventory (Williamson 1975). (H) Human Capital Resources are intangible assets of the rm including the knowledge, training, experience, intuition, and relationships of individual managers within the rm (Becker 1964). (O) Organizational and Interorganizational Capital Resources are intangible assets of the rm including the formal informal reporting structure, the planning, controlling and coordinating systems, as well as relationships among groups within the rm or relationships between the

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focal rm and the rms within the environment (e.g., suppliers) (Tomer 1987). Reducer Categories (Scott and Davis 2003) (U) Flow Unit is the units (e.g., raw materials, subassemblies, nished products, service parts) that are being extracted from the environment as an input for the focal rm (Bertalany 1950). (S) Source is the supply node in the environment where the ow units originated (Scott and Davis 2003). (F) Flow is associated with activities (e.g., transportation) related to the extraction of the ow units from the source (Buckley 1967).

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Information and Telecommunication Systems for Business from Johns Hopkins University and has a undergraduate degree in Finance from the University of Florida. Christopher W. Craighead (PhD Clemson University) joined the Smeal College of Business at The Pennsylvania State University in 2008. He has articles in Journal of Operations Management, Production and Operations Management,

Decision Sciences, International Journal of Physical Distribution and Logistics Management, International Journal of Logistics Management, Supply Chain Management Review, and other journals. He is an Associate Editor of the Journal of Operations Management, an Area Editor for Operations Management Research, and serves on the Review Board of Production and Operations Management.