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Mitigating ripple effect in supply networks: the effect of trust and topology on resilience

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E-pub ahead of print
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<mark>Journal publication date</mark>26/12/2020
<mark>Journal</mark>International Journal of Production Research
Publication StatusE-pub ahead of print
Early online date26/12/20
<mark>Original language</mark>English

Abstract

The ripple effect refers to disruption propagation across the supply network affecting its global performance. To cope with it, supply networks should be resilient. This study investigates the drivers of supply network resilience, viewed as adaptive capacity to disruptions, focusing on trust and investigating the moderating role of network topology on the relationship between trust and resilience. We first develop an NK agent-based model of the supply network to simulate resilient performance. Then, a simulation analysis is carried out, to assess the effect of trust on the resilience of supply networks displaying different complex topologies. Our results confirm that trust positively affects supply network resilience; however, across the different topologies, the beneficial effect of trust varies. In particular, we find that trust is beneficial at most for the following topologies: local, small-world, block-diagonal, and random. For centralised, diagonal, and hierarchical topologies improving trust increases resilience at a moderat e level. We also find that, as the frequency of disruptions rises, the positive effect of trust on resilience decreases. Managerial implications of the main findings are finally discussed.