On the sensitivity of configure‐to‐order supply chains for personal computers after component market disruptions

Abstract

This empirical study provides evidence linking supply chain strategy and company risk structure. An event study on the stock performance of four major personal computer (PC) producers is performed focusing on the 1999 earthquake in Taiwan and the computer memory price increases that ensued. It is shown that investors associate pull‐type supply chains for PCs with lower profitability after abrupt component price increases. A parallel analysis of push‐type producer stock returns does not show similar results. Furthermore, in‐depth analysis of Dell Computer reveals that after the catastrophe‐induced disruption, the onset of losses to this major pull‐type PC producer was very fast. Far from condemning pull‐type PC supply chains, earthquake‐induced disruptions, like the one researched, pose manageable risks.

Citation

Papadakis, I.S. (2003), "On the sensitivity of configure‐to‐order supply chains for personal computers after component market disruptions", International Journal of Physical Distribution & Logistics Management, Vol. 33 No. 10, pp. 934-950. https://doi.org/10.1108/09600030310508726