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The influence of market structure, collaboration and price competition on supply network disruptions in open and closed markets

The relaxation of international boundaries has enabled the globalisation of
markets making available an ever increasing number of specialised suppliers
and markets. Inevitably this results in supply chains sharing suppliers and
customers reflected in a network of relationships.
Within this context firms buyers configure their supply relationships based on
their perception of supply risk. Risk is managed by either increasing trust or
commitment or by increasing the number of suppliers. Increasing trust and
commitment facilitates collaboration and reduces the propensity for a supplier to
exit the relationship. Conversely, increasing the number of suppliers reduces
dependency and increases the ease of making alternative supply
arrangements.
The emergent network of relationships is dynamic and complex, and due in no
small part to the influence of inventory management practices, tightly coupled.
This critical organization of the network describes a system that contrary to
existing supply chain conceptualisation exists far from equilibrium, requiring a
different more appropriate theoretical lens through which to view them.
This thesis adopts a Complex Adaptive Systems (CAS) perspective to position
supply networks as tightly coupled complex systems which according to Normal
Accident Theory (NAT) are vulnerable to disruptions as a consequence of
normal operations. The consequential boundless and emergent nature of supply
networks makes them difficult to research using traditional empirical methods,
instead this research builds a generalised supply network agent based
computer model, allowing network constituents (agents) to take autonomous
parallel action reflecting the true emergent nature of supply networks.
This thesis uses the results from a series of carefully designed computer
experiments to elucidate how supply networks respond to a variety of market
structures and permitted agent behaviours. Market structures define the vertical
(between tier) and horizontal (within tier) levels of price differentiation. Within
each structure agents are permitted to autonomously modify their prices
(constrained by market structure) and collaborate by sharing demand
information.
By examining how supply networks respond to different permitted agent
behaviours in a range of market structures this thesis makes 4 contributions.
Firstly, it extends NAT by incorporating the adaptive nature of supply network
constituents. Secondly it extends supply chain management by specifying
supply networks as dynamic not static phenomena. Thirdly it extends supply
chain risk management through developing an understanding of the impact
different permitted behaviour combinations on the networks vulnerability to
disruptions in the context of normal operations. Finally by developing the
understanding how normal operations impact a supply networks vulnerability to
disruptions it informs the practice of supply chain risk management.

Identiferoai:union.ndltd.org:CRANFIELD1/oai:dspace.lib.cranfield.ac.uk:1826/8473
Date January 2013
CreatorsGreening, Philip
ContributorsGodsell, Janet
PublisherCranfield University
Source SetsCRANFIELD1
LanguageEnglish
Detected LanguageEnglish
TypeThesis or dissertation, Doctoral, PhD
Rights© Cranfield University 2013. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright owner.

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