Managing supply chain uncertainty with emerging ethical issues

In: International journal of operations & production management, Band 36, Heft 10, S. 1272-1307

Abstract

Purpose
The purpose of this paper is to empirically investigate effective management strategies for 14 sources of supply chain uncertainty, with a particular emphasis on uncertainties or strategies that involve ethical issues.


Design/methodology/approach
Manufacturing strategy theory, underpinned by alignment and contingency theory, is used as the theoretical foundation. Multi-case study data are collected from 12 companies in the Indonesian food industry, including four focal manufacturers, four first-tier suppliers, and four first-tier customers (retailers).


Findings
Within the context of appropriately aligned management strategies to address 14 sources of uncertainty, three ethical issues are empirically identified: first, collusion amongst suppliers to ration supplies and increase prices; second, unethical influences on government policy; and third, "abuse" of power by large retailers at the expense of smaller competitors. Joint purchasing is argued to be a key strategy for combatting the first of these ethical issues.


Research limitations/implications
The study is limited to the Indonesian food industry, and so further research is needed in other cultures/contexts.


Practical implications
Management strategies that aim to reduce an uncertainty at its source lead to better overall supply chain performance than strategies that merely cope with uncertainty, which only have an impact on firm-level performance.


Social implications
The ethical issues identified have implications for fair negotiations between customers and suppliers.


Originality/value
This study is unique in its in-depth case study-based empirical investigation of the management of multiple supply chain uncertainties; and in its discussion of ethical issues in this context.