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

See all articles by Merve Er-Kara

Merve Er-Kara

Marmara University - Faculty of Business Administration

Abhijeet Ghadge

Cranfield University - School of Management

Umit Bititci

Heriot-Watt University - Department of Business Management

Date Written: July 14, 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-Kara, Merve and Ghadge, Abhijeet and Bititci, Umit, Modelling the Impact of Climate Change Risk on Supply Chain Performance (July 14, 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, Accepted., Available at SSRN: https://ssrn.com/abstract=3652664 or http://dx.doi.org/10.2139/ssrn.3652664

Merve Er-Kara

Marmara University - Faculty of Business Administration ( email )

Bahcelievler Campus, Ressam Namık İsmail Sokak
No: 1, Bahçelievler
Istanbul, 34840
Turkey

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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