Advertisement

Malicious Supply Chain Risk: A Literature Review and Future Directions

  • Scott DuHadway
  • Steven CarnovaleEmail author
Chapter
Part of the Springer Series in Supply Chain Management book series (SSSCM, volume 7)

Abstract

Supply chain risk management faces a myriad of challenges. Perhaps the most understudied of which deals with intentional disruptions; that is, those disruptions arising from deliberate actions that can negatively affect supply chain operations and performance. The following chapter focuses on suppliers intentionally undermining the operations of a supply chain through opportunistic behavior such as: deception, product fraud, and contract/trust breeches. Such behavior engenders relational failure and leads to a type of risk that extant models of risk management have neglected. Accordingly, proactively managing this type of risk requires a substantially different management approach. The following presents a review of the innovative work in this domain and subsequently advances a framework for aiding managerial decision making for proactively managing and coping with such intentional risk in a supply chain. This framework encapsulates a three-pronged approach centered on avoiding and detecting, mitigating the impact of, and recovering from this unique type of supply chain risk.

References

  1. Agrawal, A., & Muthulingam, S. (2015). Does organizational forgetting affect vendor quality performance? An empirical investigation. Manufacturing & Service Operations Management, 17(3), 350–367.CrossRefGoogle Scholar
  2. Ambulkar, S., Blackhurst, J., & Grawe, S. (2015). Firm’s resilience to supply chain disruptions: Scale development and empirical examination. Journal of Operations Management, 33, 111–122.Google Scholar
  3. Arnold, U., Neubauer, J., & Schoenherr, T. (2012). Explicating factors for companies’ inclination towards corruption in Operations and supply chain management: An exploratory study in Germany. International Journal of Production Economics, 138(1), 136–147.CrossRefGoogle Scholar
  4. Babich, V., & Tang, C. S. (2012). Managing opportunistic supplier product adulteration: Deferred payments, inspection, and combined mechanisms. Manufacturing & Service Operations Management, 14(2), 301–314.CrossRefGoogle Scholar
  5. Barrett, S. R., Speth, R. L., Eastham, S. D., Dedoussi, I. C., Ashok, A., Malina, R., et al. (2015). Impact of the Volkswagen emissions control defeat device on US public health. Environmental Research Letters, 10(11), 114005.CrossRefGoogle Scholar
  6. Bhide, C. S. (2012). A study of the importance of forensic accounting in the modern business world. DYPIMS’s International Journal of Management and Research, 1(1), 12–17.Google Scholar
  7. Bonin, F., Devaux, B., & Dupré, A. (2006). Turtles of the World. Baltimore: JHU Press.Google Scholar
  8. Brown, B. (2013). Findus beef lasagne contained up to 100% horsemeat. BBC News: FSA says.Google Scholar
  9. Cheng, J.-H., & Chen, M.-C. (2016). Influence of institutional and moral orientations on relational risk management in supply chains. Journal of Purchasing and Supply Management, 22(2), 110–119.CrossRefGoogle Scholar
  10. Chopra, S., & Sodhi, M. S. (2004). Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review, 46(1), 53.Google Scholar
  11. Christopher, M., & Lee, H. (2004). Mitigating supply chain risk through improved confidence. International Journal of Physical Distribution & Logistics Management, 34(5), 388–396.CrossRefGoogle Scholar
  12. Daimler. (2017). Tracking down the product pirates. Brand Protection. Retrieved from https://www.daimler.com/sustainability/product/claim/brand-protection.html.
  13. Doney, P. M., & Cannon, J. P. (1997). An examination of the nature of trust in buyer-seller relationships. The Journal of Marketing, 35–51.Google Scholar
  14. DuHadway, S., Carnovale, S., & Hazen, B. (2017). Understanding risk management for intentional supply chain disruptions: Risk detection, risk mitigation, and risk recovery. Annals of Operations Research, 1–20.Google Scholar
  15. Dwyer, F. R., Schurr, P. H., & Oh, S. (1987). Developing buyer-seller relationships. The Journal of Marketing, 11–27.CrossRefGoogle Scholar
  16. Finch, P. (2004). Supply chain risk management. Supply Chain Management: An International Journal, 9(2), 183–196.CrossRefGoogle Scholar
  17. Fisk, M. C., Mehrotra, K., Katz, A., & Plungis, J. (2016). Volkswagen agrees to $15 billion diesel-cheating settlement. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2016-06-28/volkswagen-to-pay-14-7-billion-to-settle-u-s-emissions-claims.
  18. Ganesan, S., & Hess, R. (1997). Dimensions and levels of trust: Implications for commitment to a relationship. Marketing Letters, 8(4), 439–448.CrossRefGoogle Scholar
  19. Garvey, M. D., Carnovale, S., & Yeniyurt, S. (2015). An analytical framework for supply network risk propagation: A Bayesian network approach. European Journal of Operational Research, 242(2), 618–627.CrossRefGoogle Scholar
  20. Giunipero, L. C., & Aly Eltantawy, R. (2004). Securing the upstream supply chain: A risk management approach. International Journal of Physical Distribution & Logistics Management, 34(9), 698–713.CrossRefGoogle Scholar
  21. Huang, X., Gattiker, T. F., & Schwarz, J. L. (2008). Interpersonal trust formation during the supplier selection process: The role of the communication channel. Journal of Supply Chain Management, 44(3), 53–75.CrossRefGoogle Scholar
  22. Kleindorfer, P. R., & Saad, G. H. (2005). Managing disruption risks in supply chains. Production and Operations Management, 14(1), 53–68.CrossRefGoogle Scholar
  23. Lee, H. L., & Whang, S. (2005). Higher supply chain security with lower cost: Lessons from total quality management. International Journal of Production Economics, 96(3), 289–300.CrossRefGoogle Scholar
  24. Levinson, H. Z., & Levinson, A. R. (1985). Storage and insect species of stored grain and tombs in ancient Egypt. Zeitschrift für Angewandte Entomologie, 100(1–5), 321–339.Google Scholar
  25. Lippman, S. A., & Rumelt, R. P. (1982). Uncertain imitability: An analysis of interfirm differences in efficiency under competition. The Bell Journal of Economics, 418–438.CrossRefGoogle Scholar
  26. Liu, Y., Shankar, V., & Yun, W. (2017). Crisis management strategies and the long-term effects of product recalls on firm value. Journal of Marketing, 81(5), 30–48.CrossRefGoogle Scholar
  27. Madichie, N. O., & Yamoah, F. A. (2017). Revisiting the European horsemeat scandal: The role of power asymmetry in the food supply chain crisis. Thunderbird International Business Review, 59(6), 663–675.CrossRefGoogle Scholar
  28. McGreevy, C., & Harrop, W. (2015). Intentional cargo disruption by nefarious means: Examining threats, systemic vulnerabilities and securitisation measures in complex global supply chains. Journal of business continuity & emergency planning, 8(4), 326–345.Google Scholar
  29. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. The Journal of Marketing, 20–38.CrossRefGoogle Scholar
  30. Nugent, T., Upton, D., & Cimpoesu, M. (2016). Improving data transparency in clinical trials using blockchain smart contracts. F1000Research, 5.Google Scholar
  31. Parajuli, A., Kuzgunkaya, O., & Vidyarthi, N. (2017). Responsive contingency planning of capacitated supply networks under disruption risks. Transportation Research Part E: Logistics and Transportation Review, 102, 13–37.CrossRefGoogle Scholar
  32. Pettit, T. J., Simpson, N. C., Hancock, P. G., Clark, H., Haydel, T., & Pierce, J. (2016). Exploring operational resilience in the context of military aviation: Finding the right mode at the right time. Journal of Business and Behavior Sciences, 28(2), 24.Google Scholar
  33. Pil, F. K., & Cohen, S. K. (2006). Modularity: Implications for imitation, innovation, and sustained advantage. Academy of Management Review, 31(4), 995–1011.CrossRefGoogle Scholar
  34. Rubel, O. (2018). Profiting from product-harm crises in competitive markets. European Journal of Operational Research, 265(1), 219–227.CrossRefGoogle Scholar
  35. Sapuric, S., & Kokkinaki, A. (2014). Bitcoin Is Volatile! Isn’t that Right? In Paper presented at the International Conference on Business Information Systems.Google Scholar
  36. Shah, R., Ball, G. P. & Netessine, S. (2017). Plant operations and product recalls in the automotive industry: An empirical investigation. Management Science, 63(8).CrossRefGoogle Scholar
  37. Sheffi, Y. (2001). Supply chain management under the threat of international terrorism. The International Journal of Logistics Management, 12(2), 1–11.CrossRefGoogle Scholar
  38. Suh, T., & Houston, M. B. (2010). Distinguishing supplier reputation from trust in buyer–supplier relationships. Industrial Marketing Management, 39(5), 744–751.CrossRefGoogle Scholar
  39. Tomlin, B. (2006). On the value of mitigation and contingency strategies for managing supply chain disruption risks. Management Science, 52(5), 639–657.CrossRefGoogle Scholar
  40. Trudell, C., & Fisk, M. C. (2016). Honda audit finds Takata engineers manipulated air-bag test data. Bloomberg. Retrieved July 18, 2016, from https://www.bloomberg.com/news/articles/2016-07-18/honda-audit-finds-takata-engineers-manipulated-air-bag-test-data.
  41. Trudell, C., Hagiwara, Y., & Jie, M. (2014). Air-bag maker in global crisis used unusual explosive. Bloomberg. Retrieved October 26, 2014, from http://www.bloomberg.com/news/articles/2014-10-27/air-bag-maker-in-global-crisis-used-unusual-explosive.
  42. Villena, V. H., & Craighead, C. W. (2017). On the same page? how asymmetric buyer-supplier relationships affect opportunism and performance. Production and Operations Management, 26(3), 491–508.CrossRefGoogle Scholar
  43. Vollmer, S. (2015). Monitoring fraud risks in the supply chain. Journal of Accountancy, 219(4), 26.Google Scholar
  44. Warner, K., Timme, W., Lowell, B., & Hirshfield, M. (2013). Oceana study reveals seafood fraud nationwide. Oceana, 11, 1–69.Google Scholar
  45. Williamson, O. E. (1985). The economic intstitutions of capitalism. New York: Simon and Schuster.Google Scholar
  46. Woo, C. (2008). Mattels recalls (2007): Communication implications for quality control, outsourcing and consumer relations. Arthur. W. Page Society, 2008 Case Study Competition.Google Scholar
  47. Wowak, K. D., & Boone, C. A. (2015). So many recalls, so little research: a review of the literature and road map for future research. Journal of Supply Chain Management, 51(4), 54–72.CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Saunders College of BusinessRochester Institute of TechnologyRochesterUSA
  2. 2.Portland State UniversityPortlandUSA

Personalised recommendations