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Over the years, supply chain reconfiguration decisions have been solely based on operational risk. Simplification strategies, such as horizontal mergers, and networking strategies, such as risk pooling, are conflicting paradigms that have been shown to improve financial performance of supply partners. The implication of this to disruption risk is not fully known, especially as it concerns information security breach (ISB). Analysts have rated ISB as a huge disruption risk, costing businesses millions of dollars. Using a credible and well-established agent-based simulation approach and statistical analysis, we examine the impact of ISB on the simplification and risk pooling strategies respectively under three different order replenishment systems. The effect of reconfiguring the supply chain is first examined in a non-security breach scenario and then in a breached scenario. We find that reconfiguration has no benefit to a supply chain using a parameter based replenishment policy (option I), in both breach and non-breach situations, but leads to significant advantage when batch ordering model (option II) or a combined batch-and-parameter based ordering policy (option III) is used. We also established that batch ordering system favours the risk pooling strategy whereas a combined batch-and-parameter ordering system favours the simplification counterpart especially when the simplification is at the wholesaler tier. This study has significant implications for supply chain design as well as information security priorities. This is one of the first papers to look at how ISB impacts supply chain configuration and the role of ordering decision context.

Resilience enables supply chains to reduce their proneness to disruptions and recover faster. Many existing strategies to strengthen the resilience of supply chains are facilitated by the use of digital technology. Blockchain, as one of the promising innovative technologies, enables a transparent, secure, and timely data exchange and automation via smart contracts. In this paper, we discuss the impact of blockchain technology on supply chain risk management and, in particular, on supply chain resilience. We identify potential risk-related blockchain application scenarios and examine their impact on the existing resilience strategies. We explore the impact of the most promising applications with respect to resilience by using an agent-based simulation model of a complex supply network affected by disruptions. The theoretical analysis reveals a promotion of supply chain resilience strategies, especially if smart contracts are used for risk-related collaboration. The simulation study indicates an increase in resilience if the underlying collaboration is based on time-efficient processes: The propagation of disruptions, the network recovery time and total costs can be substantially reduced. However, depending on the duration of the disruption, negative effects can occur if process efficiency is insufficient. From our investigations, we derive insights for managers who are interested in practical implementation., Highlights • Blockchain technology influences identified resilience strategies mostly positively. • Especially collaboration, visibility, agility, and velocity can be strengthened. • Impact of disruptions on a blockchain-coordinated network is tested with simulation. • Reduction of the network's ripple effect and recovery time possible but not guaranteed. • Physical process efficiency and length of disruption have significant influence.

This paper investigates the economic effects of a product information service when potential consumers, who are segmented by their taste, exist in gray markets. Specifically, we construct an economic model that considers a multinational firm (MNF) who expands business to a country and chooses whether to provide information service regarding product characteristics. If receiving the information, consumers in a specific segment, whose taste suits the characteristics, have positive utility from consuming the product, while those in other segments have no utility. By contrast, consumers in all segments have positive expected utility before consuming the product without information. With these settings, we demonstrate that there arises the equilibrium that the MNF provides no information service when gray-market trade, i.e., parallel trade, is allowed in the country, leading to lower consumer welfare than when it is prohibited. A primary finding in the equilibrium is that such a situation arises especially when potential consumers are less segmented. In this situation, the regulator in the country should ban the parallel imports so as to enhance consumer welfare. The result is counterintuitive and notable, because one might intuitively infer that gray-market trade is less desirable when customers are more minutely segmented and the product information service is thus more specific and necessary. (C) 2013 Elsevier B.V. All rights reserved.