Stages of Supply Chain Disruption Response: Direct, Constraining, and Mediating Factors for Impact Mitigation

It is well established that supply chain disruptions can have a severe negative impact on firms and general wisdom suggests that this impact can be mitigated by quick responses. Aside from a few anecdotes, however, little is known about the decision-making process that leads to speedy responses and about its impeding and supporting antecedents. Using the organizational information-processing perspective, this empirical study unravels the disruption management process along a sequence of four stages—disruption recognition, disruption diagnosis, response development, and response implementation—and hypothesizes constraining and mediating effects of these stages. The findings contribute to an improved understanding of the role that the decision stages play in mitigating supply chain disruptions, and confirm the prediction that the speed with which information is processed and the stages are worked through positively affects supply chain performance. In addition, the findings suggest that one of the stages, diagnosis, acts as a constraining factor to the other stages. The stages also play a mediating role between the impact that the disruption has and a firm's readiness (prior to a disruption), dependence on a key supplier, and supply chain complexity. This provides guidance to decision makers in the application of resources both prior to a negative event and during a disruption recovery.