Disruptions in supply chains : Summarizing the theorectical and practical perspectives on challenges and reactions

Today, supply chains encompass multiple valued-added stages scattered around the world as opposed to the past, in which companies conducted a larger share of value-added activities in-house with greater regional concentration. These changes are particularly fuelled by the megatrends of the last 25 years - globalization and the fine slicing of supply chains. Globalization has intensified competition, enlarged reach of distribution but also reduced cost by including low cost countries in supply chains. The division of work by outsourcing the development and production of parts, components or complete systems to other companies resulted in "fine-sliced" multi-tier supply chains.

More actors in a supply chain are associated with higher complexity and lower transparency. Limited transparency and control in supply chains increase the risk for disruptions. A disruption is an incident in which a sudden lack of availability of materials, information or operational capacities delays, restricts, or prevents the fulfillment of a customer order. Disruptions are caused by natural, economic, personal, social, and governmental risks resulting in significant additional costs, decreasing profits and loss of reputation, impacting on companies at all stages of the supply chain. While disruptions cannot be avoided completely, employing distinct risk and disruption management concepts in supply chain management constitute appropriate countermeasures.

BVL International and the Chair of Logistics Management at the University of St.Gallen draw attention to disruptions from a practical perspective in seven individual case studies. Therein, attention is drawn to disruptions that occur (1) in distribution activities to customers, (2) in production activities, and (3) in sourcing activities with suppliers and sub-suppliers.