On synergistic effects of resilience strategies: developing a layered defense approach

Abstract

Supply chain literature has amply explored the effect of different resilience strategies in the face of supply chain disruptions. Firms often apply a multitude of resilience strategies in tandem. Such strategies can vary from slack inventory to volume flexibility and responsiveness to backup capacity. Yet, there is a lack of empirical or analytical evidence in how the combination of resilience strategies affects firm capabilities in the face of supply chain disruptions. In this paper, we use simulation modelling techniques to determine the effect of different combinations of resilience strategies in a systematic and stepwise manner. Our modelling considers different disruption attributes (capacity or delay), their effect (severity and likelihood), and their origin (i.e. upstream or downstream). A number of interesting observations are made. First, combining resilience strategies is not always beneficial and can occasionally have detrimental effects. Moreover, resilience strategies that are beneficial at the node (firm) level may prove ineffective at the system level. We also find that inventory and volume flexibility are strategies that combine well with others. The study offers several contributions to research and management in supply chain disruption and the study of resilience.