The “snowball effect” in the transmission of disruptions in supply chains: The role of intensity and span of integration

Abstract

Purpose

The purpose of this paper is to explore the link between interorganizational integration with respect to its intensity and span, as well as the propagation and amplification of disruptions alongside a supply chain.

Design/methodology/approach

The paper opted for an exploratory study using a survey of companies. In order to extract the constructs manifesting the span and intensity of integration between companies in supply chains, the principal component analysis was employed. The obtained factor scores were then used as classification criteria in the cluster analysis. It enabled to include similar organizations in terms of intensity and span of supply chain integration. In order to validate the obtained results, the analysis of variance (ANOVA) was conducted and regression models were developed.

Findings

The findings of the study show that there is a relationship between the intensity and span of supply chain integration and the “snowball effect” in the transmission of disruptions. The obtained findings show that the span of supply chain integration is negatively associated with the strength of the “snowball effect” in the transmission of disruptions. In addition, the results suggest that more intense supply chain integration contributes to the “snowball effect” in material flows in the forward and backward transmission of disruptions.

Research limitations/implications

Although the current study investigates the intensity and span of integration within the basic, extended and ultimate supply chain structure, it still lacks the broader analysis of the “snowball effect” in the transmission of disruptions. The study investigates this phenomenon only within the basic supply chain structure, constituted by the primary members. Another challenge is to examine if the effects of external risk factors (e.g. natural disasters) may also be transferred to other links in the supply chain structure, and what are the similarities and differences (if any) between the mechanism of propagation and amplification of disruptions elicited by internal and external risk factors. Another future direction of study is to define other ways of identification and measurement of the “snowball effect” in order to make cross-industrial and international comparisons of disruptions amplified in the transmission more standardized and objective. In the current study, the phenomenon of the “snowball effect” is anchored in the subjective opinions of managers who may view the problem from different angles. Consequently, the study is limited to individual perceptions of the strength of disruptions affecting the solicited company, its customers and suppliers.

Practical implications

In practical terms, the findings provide crucial information for the framework of supply chain risk management and therefore enable its more efficient and effective implementation. The better the managers understand the nature of the “snowball effect” in the transmission of disruptions, the easier it is for them to allocate resources and apply necessary managerial tools to mitigate the negative consequences of risk more effectively. The deliverables of the study also confirm that the interorganizational exchange of information accompanying the supply chain integration enables to mitigate the strength of the “snowball effect” in the transmission of disruptions. Another important implication is the broadening of practical expertise concerning the use of integration not only as a means of obtaining and sustaining supply chain effectiveness and efficiency, but also as the way to mitigate the “snowball effect” in the transmission of disruptions. Therefore, nowadays the supply chain managers are facing another challenging task – namely, how to balance supply chain integration in terms of span and intensity to ensure profits from integration and mitigate the negative risk consequences transmitted among the links in supply chains.

Originality/value

The paper elaborates on the underestimated issue of the “snowball effect” in the transmission of disruptions and its drivers. In particular, the paper attempts at filling the gap in empirical studies concerning the relationships between the “snowball effect” in the transmission of disruptions and supply chain integration.

Citation

Swierczek, A. (2016), "The “snowball effect” in the transmission of disruptions in supply chains: The role of intensity and span of integration", The International Journal of Logistics Management, Vol. 27 No. 3, pp. 1002-1038. https://doi.org/10.1108/IJLM-08-2015-0133