Thomas Y. Choi’s research while affiliated with Arizona State University and other places

Thomas Y Choi, Luitzen de Boer, and Poul Houman Andersen discuss how supply chain managers have historically addressed relationships between buyer and supplier and how digitization will help them to adjust to new realities driven by global disruptions, political conflicts, and climate change.

An outsourcing decision does not equate to the outsourcing of a sourcing decision. Many indirect transactions with lower-tier suppliers are embedded in transactions with first-tier suppliers. Building on Williamson's (1985) identification of a transaction as the fundamental unit of analysis, this study proposes that transactions comprise bundles of intertwined direct transactions at the firm level and indirect transactions at the supply chain level. These indirect transactions require separate but not independent sourcing decisions. Using a buyer's decision to control or delegate the governance of indirect transactions for an externally sourced product, this study demonstrates that disaggregating the transaction advances theory by extending the range of outcomes, refining the calculus of the make-or-buy decision, and providing a coherent theoretical framework for multi-tier supply chain management. This study considers the theoretical, managerial, and societal implications across various contingencies involving inter-firm relationships.

Supply chains are networks. Supply chains are a simplification of what actually happens, and supply networks are much closer to what is real. When two companies engage in business as a buyer and a supplier, they form a buyer-supplier relationship. That is a dyad—two entities linked in a relationship. Yet, triads are the smallest unit where we can begin to observe network dynamics. A common triad in supply networks is the buyer-supplier-supplier relationship. If we extend the supplier-supplier relationship horizontally, we get a supply base to a buying company. If we extend the buyer-supplier relationship vertically, we see an extended supply chain. If we combine the supply bases and extended supply chains, we end up with supply networks. Using the network concepts and theories, we study the structural and behavioral patterns of supply networks. Further, using the theoretical lens of complex adaptive systems, we examine the dynamic and evolutionary patterns of supply networks. By doing so, we consider how to help make supply networks become more resilient and robust.

The Covid‐19 pandemic and other recent disruptions in the early 2020s led to sections in the business press blaming just‐in‐time (JIT) practices for operational failings. Consequently, there are calls for moving away from JIT toward holding more inventory as preparation against future disruptions, which is referred to as just‐in‐case. The academic community is also divided. Some scholars argue that JIT is not resilient, while others maintain that JIT can continue providing superior performance even with disruptions. Motivated by this debate, we discuss various misconceptions about JIT that underlie this debate. Furthermore, we present different ways to adapt JIT for turbulent environments and argue that companies can improve their supply chain performance if JIT supply chain segments are chosen fittingly—even more so—during disruptions.

The selection of suppliers has a long-term impact on the performance of the buying firm. This is true in stable situations as well as in times of uncertainty, such as during the COVID-19 pandemic. Building on the literature on supplier selection criteria that would help identify suppliers that support the success of the buying firm, we identify a previously unnoticed criterion: a supplier's complexity. In this study, we examine the relationship between supplier complexity and buyer disruptions. Normal accident theory suggests that complex firms are more prone to disruption, while social systems theory views firm-level complexity as essential in avoiding disruption. Given these two opposing theoretical viewpoints, this study examines whether and how supplier complexity affects numbers of disruptions experienced by the buyers. Our data collection entails 59 buyer-supplier dyads, extended to a triadic context (i.e., buyer-supplier-supplier), through a survey taken from 118 German manufacturing firms. The results show that both the internal complexity of a supplier and the complexity of the collaboration with other suppliers increases the number of disruptions experienced by the buyer. A high degree of supplier dependence can dampen this effect. These results introduce a supplier's complexity as a relevant criterion for supplier selection and shed light on the moderating influence of supplier dependency.

This study is about competitive dynamics surrounding opportunistic innovation in the digital supply chain (i.e., on‐line gaming, multi‐media broadcasting, etc.). When a digital service firm falls short of delivering required services, consumers look for alternative service offerings. For competing firms, potential demand is created suddenly, and they are compelled to innovate to capture this opportunity. This innovation response occurs in reaction to a service failure, and we call it opportunistic innovation. We characterize opportunistic innovation as being situational and temporal—the opportunity is created by the failure of another firm, and it is taken up by the fast‐responding firms. The goal of this study is to develop a theory of opportunistic innovation and empirically examine its presence and associated constructs. We have compiled the daily usage‐and‐update history of 460 online gaming services between 2014 and 2017 and their 58 major service failure events. Our results confirm the temporal and situational characteristics of opportunistic innovation. Firms with alternative services quickly introduce innovation to the market shortly after a service failure when the readiness for convertibility at competing firms is high. In addition, results suggest that opportunistic innovation is constrained by the resource congestion on the supplier side in the digital supply chain.