Supply Chain Security: A Classification of Practices and an Empirical Study of Differential Effects and Complementarity

Supply chain security (SCS) breaches (a form of supply chain risk) are distressing supply chains and they have the potential to engender acute pain on the society at large. To counteract such breaches, international bodies, nations, societies, industries, and firms have instituted several countermeasures in the form of standards and respective practices. Given that not all incidences/breaches can be averted, the risk management literature advocates that firms should adopt practices that can thwart incidences/breaches and practices that can provide a swift response once an incident/breach is detected in order to contain damages, ease the pain, and restore operations. Resting on the risk management literature and interactions with professionals, we classify SCS management practices into four categories based on their intent (i.e., detection, prevention, response, and mitigation) and operationalize each via multiple indicators. We then test the relative efficacy of these practices to explain SCS performance using responses from 462 firms operating in the United States and Italy.

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