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, Accepted.
35 Pages Posted: 17 Aug 2020
Date Written: July 14, 2020
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: Suggested Citation