Supply Chain Plasticity: A Responsive Network Capability to Ensure Resilience

Abstract

In the face of supply chain disruptions, firms are expected to swiftly recover and resume operations. Traditional strategies focus on restoring operations to pre-disruption states while largely maintaining the existing supply network structure. Recent cases, however, highlight a different approach: supply chain plasticity, wherein firms undergo significant structural shifts in supply network design as a response to disruptions with the goal to improve performance. Drawing on the foundations of supply chain responsiveness and network theory, we investigate how (and if) firms redesign their supply chains against a backdrop of increased disruptions and the implications supply chain plasticity has on resilience. Rooted in network theory, this study not only theoretically compares, contrasts, and connects prior concepts with supply chain plasticity but also empirically investigates whether firms exhibit a plastic response by modifying their supply chain network structures—specifically focusing on structural holes, centrality, and clustering network dimensions. Furthermore, we hypothesize that network plasticity impacts firm performance in the form of time to recover from a disruption. The findings demonstrate that the existence and significance of network plasticity in shaping firm responses to disruptions are indeed present and can be beneficial. We also provide evidence that supply chain plasticity is an efficacious strategy to enhance resilience and recovery performance amidst heightened disruption frequency. As firms increasingly face dynamic and complex environments, understanding and leveraging network plasticity will be vital for sustaining competitive advantage and achieving long-term success.