Responding to the ripple effect from systemic disruptions: empirical evidence from the semiconductor shortage during COVID-19

Abstract

Listen

Translate article

PurposeThe ripple effect (i.e. disruption propagation in networks) belongs to one of the central pillars in supply chain resilience and viability research, constituting a type of systemic disruption. A considerable body of knowledge has been developed for the last two decades to examine the ripple effect triggered by instantaneous disruptions, e.g. earthquakes or factory fires. In contrast, far less research has been devoted to study the ripple effect under long-term disruptions, such as in the wake of the COVID-19 pandemic.Design/methodology/approachThis study qualitatively analyses secondary data on the ripple effects incurred in automotive and electronics supply chains. Through the analysis of five distinct case studies illustrating operational practices used by companies to cope with the ripple effect, we uncover a disruption propagation mechanism through the supply chains during the semiconductor shortage in 2020–2022.FindingsApplying a theory elaboration approach, we sequence the triggers for the ripple effects induced by the semiconductor shortage. Second, the measures to mitigate the ripple effect employed by automotive and electronics companies are delineated with a cost-effectiveness analysis. Finally, the results are summarised and generalised into a causal loop diagram providing a more complete conceptualisation of long-term disruption propagation.Originality/valueThe results add to the academic discourse on appropriate mitigation strategies. They can help build scenarios for simulation and analytical models to inform decision-making as well as incorporate systemic risks from ripple effects into a normal operations mode. In addition, the findings provide practical recommendations for implementing short- and long-term measures during long-term disruptions.