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Dynamic Nature and Long-Term Effect of Events on Supply Chain Confidence

  • Harri LorentzEmail author
  • Olli-Pekka Hilmola
Conference paper

Abstract

Supply chains have a key role in the competitiveness of companies, and therefore responsible managers may have great expectations on the chosen network structure to perform consistently. However, decision maker confidence on the supply chain performance may also decrease, reflecting past experience or forecasted problems. In this research, the interest is on the manager, who makes decisions for example on routes, manufacturing locations and the structure of the supply chain in general. Our aim is to conceptualise supply chain confidence, and propose a dynamic hypothesis on the behaviour of supply chain confidence in relation to supply chain performance and events. Based on a multiple case study we present a dynamics hypothesis, which illustrates a system of element relationships that explain confidence erosion during negative event chains, as well as eventual policy and configuration reactions. From the economic and regional development point of view, our research underlines the importance of understanding tipping points in managerial decision making and the feasibility of supply chain operations, in order to sustain FDI and participation in global production networks.

Keywords

supply chain confidence cognitive psychology system dynamics 

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Copyright information

© Springer-Verlag London Limited 2011

Authors and Affiliations

  1. 1.Turku School of EconomicsTurkuFinland
  2. 2.Lappeenranta University of TechnologyLappeenrantaFinland

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