To Concentrate or to Diversify the Supply Base? Implications from the US Apparel Supply Chain During the COVID-19 Pandemic
Journal of Business Logistics
The COVID- 19 pandemic resulted in severe supply disruptions and revenue losses, especially for buyers highly dependent on foreign suppliers. Unsurprisingly, schol-ars and industry experts claim that high dependence on any exchange partner is detrimental to buyers. The literature, however, is ambivalent about whether supply base concentration— the number of sources in a firm's supply base and the degree of importance of each source— benefits or harms buyers. Our study addresses this ambivalence by investigating whether supply base concentration, conceptualized as supplier concentration, supplier country concentration, and carrier concentration, worsens or mitigates the impact of supply disruptions as they unfold over time. We use longitudinal data from ocean bills of lading to examine these relationships in the context of U.S. buyers importing apparel during the COVID- 19 pandemic. Our results show that higher pre- disruption supplier concentration and supplier coun-try concentration helped buyers mitigate the impact of supply disruptions related to COVID- 19, with diminishing effects once supplier and supplier country concen-tration exceeded specific inflection points. Conversely, higher pre- disruption carrier diversification helped buyers mitigate the impact of supply disruptions related to COVID- 19. Notably, these effects depend on the specific phase of the supply disrup-tion. We discuss implications for research and practice.
© 2023 Wiley Periodicals LLC.
Locate the Document
Polyviou, M. To Concentrate or to Diversify the Supply Base? Implications from the US Apparel Supply Chain During the COVID-19 Pandemic (Doctoral dissertation, Portland State University).