Supply Chain Tsunamis: Research on Low Probability High Impact Disruptions

This paper introduces supply chain tsunamis as a major strategic supply chain phenomenon. Like their ecological counterparts, supply chain tsunamis occur at relatively long intervals and are therefore easily mistaken for unique events, rather than recurring phenomena. In contrast to ocean tsunamis, they can in principle be prevented through timely and adequate managerial action. However, their immediate impact is just as sudden and disruptive, and their ability to reshape supply chains of companies and even industries equally long-lasting. They are fundamentally different from phenomena like the “bullwhip effect” (Lee et al., 1997) and “black swan events” (Taleb, 2007). This paper further explores a preliminary typology of supply chain tsunamis suggested in an earlier publication (Akkermans and Van Wassenhove, 2013). Each type of tsunami focuses on a very different part of the supply chain periphery where the first signals of a developing tsunami can be observed. In this paper we use a detailed example from the high-tech electronics industry to describe how a supply chain tsunami unfolds over time. This is done both from an external and an internal perspective. The external perspective shows the sequence of events visible to the outside observer. The internal perspective focuses on the managerial decisionmaking processes that cause and (sometimes) resolve supply chain tsunamis. We link the notion of supply chain tsunamis to the broader need to revive strategic operations management research. Supply chain tsunamis affect corporate strategy and have a profound impact on business and management. They are living proof that operations remain, after almost half a century, the “missing link in corporate strategy” (Skinner, 1969). Therefore, we argue that business tsunamis deserve deeper research and suggest some avenues.