Modelling the Impact of Climate Change Risk on Supply Chain Performance

Er-Kara, M., Ghadge, A. & Bititci, US, (2020), “Modelling the impact of climate change risk on supply chain performance”, International journal of Production Research, Online.

19 Pages Posted: 17 Aug 2020 Last revised: 3 Dec 2020

See all articles by Merve Er

Merve Er

Marmara University; affiliation not provided to SSRN

Abhijeet Ghadge

Cranfield University - School of Management

Umit Bititci

Heriot-Watt University - Department of Business Management

Date Written: July 15, 2020

Abstract

Climate change is among the top global risks due to its growing adverse impact on businesses. However, few empirical studies address this imminent risk from a supply chain perspective. Due to a lack of established approaches for capturing complex interaction between climate change risk and supply chain performance, a three-phase mixed methodology approach was attempted. A cognitive map first captured the inter-relationships based on a mental model established by a group of experts. Later, a survey gathered from industry practitioners assessing causal relationships identified key climate change factors and most influenced supply chain performance dimensions. Finally, a system dynamics model supported by multiple case scenarios assessed the implications of climate change on supply chain performance. The results indicated a significant reduction in the availability of natural resources/raw material and capacity, leading to increase in stock-outs, inventory costs and bottlenecks disrupting procurement, manufacturing and logistics functions. Supply chain performance captured through efficiency and effectiveness shows a negative trend with increasing climate change consequences. The systems approach followed in this paper contributes by providing a quantitative model for assessing the impact of climate change risk on supply chain performance.

Keywords: Supply Chain Performance, Climate Change, Performance Measurement, Climate Risk, Uncertainty, Systems Theory

Suggested Citation

Er, Merve and Er, Merve and Ghadge, Abhijeet and Bititci, Umit, Modelling the Impact of Climate Change Risk on Supply Chain Performance (July 15, 2020). Er-Kara, M., Ghadge, A. & Bititci, US, (2020), “Modelling the impact of climate change risk on supply chain performance”, International journal of Production Research, Online., Available at SSRN: https://ssrn.com/abstract=3652664 or http://dx.doi.org/10.2139/ssrn.3652664

Merve Er

Marmara University ( email )

affiliation not provided to SSRN

Abhijeet Ghadge (Contact Author)

Cranfield University - School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom

Umit Bititci

Heriot-Watt University - Department of Business Management ( email )

United States

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