Unveiling the Impact of Supply Chain Complexity on Product Safety Risk
Purpose: Product safety risks increased over the past decades and in multiple industries, with often very negative consequences for consumers and companies, including fatalities, injuries and bankruptcies of firms involved. The purpose of this research is to examine the root causes of product safety risk by investigating the implications of supply chain complexity on product safety in multiple industries. Furthermore, it examines how these risks could be managed effectively. Methodology: The research objectives are addressed in two distinct, yet content-related studies: Study 1 focuses on identifying the relationships between supply chain complexity and product safety risk in different industries and derives its findings from a multiple holistic, inductive, cross-industry case study approach involving 7 cases of companies operating in the medical device, pharmaceutical, automotive and electronics industries. Study 2 empirically validates the findings of Study 1 by investigating the impact of supply chain complexity on product safety risk in the medical device industry using large scale, industry level data. Building on Complexity Theory, Information Processing Theory and the results of Study 1, Study 2 was conducted using regression techniques and secondary firm financial, supply chain and recall data from multiple sources to operationalise supply chain complexity and test its relationship with product safety risk. Findings: Study 1 provides a conceptual framework, suggesting relationships between multiple supply chain complexity dimensions and product safety risk. It further identifies several reactive and preventive measures that can be applied to managing product safety risk in complex supply chains. The results of Study 2 support hypothesised relationships indicating that various dimensions of supply chain complexity are positively associated with product safety risk. Furthermore, it shows that operational efficiency has a positive impact on product safety. Lastly, it shows that operational efficiency serves as a moderator, mitigating the negative effects of supply chain complexity on product safety. Implications for Theory: This research contributes to the Supply Chain and Operations Management literature in several meaningful ways. It uses Complexity Theory and Information Processing Theory to elaborate on the relationships between supply chain complexity and product safety risk. Thereby, it contributes to understanding the implications of information processing requirements in complex supply chains, and their effect on product safety risk. Furthermore, it conceptualises several complexity dimensions building upon prior literature and extends this conceptualisation by including technological aspects of supply chain complexity as well. Implications for Practice: This research provides several insights for the reduction of product safety risk caused by supply chain complexity. It identifies several actionable measures to reduce the likelihood of product failures and to contain the potential impact of product recalls. Furthermore, the study identifies several supply chain complexity dimensions and their relative strength of impact on product safety risks. Thereby, this research provides practitioners with a useful set of insights to prioritise their measures to reduce product safety risk sustainably.
product quality, product recall, product safety, quality management, supplier quality management, supply chain complexity, Supply chain management, supply chain risk management
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