New Research: Product Innovation Can Lead to Supply Chain Disruption
TORONTO – Monday, November 29, 2021 – New research from York University’s Schulich School of Business shows that product innovation elevates supply chain disruption risk.
Johnny Rungtusanatham, the Canada Research Chair in Supply Chain Management at the Schulich School of Business, co-authored the research paper together with Saurabh Ambulkar (University of Dayton), Sridhar Ramaswami (Iowa State University), and Jennifer Blackhurst (University of Iowa). Titled “Supply Chain Disruption Risk: An Unintended Consequence of Product Innovation,” the paper has been recently accepted for publication in the International Journal of Production Research.
The researchers analyzed key informant interview data, patent filing data, and textual data for 164 Indian manufacturing firms. According to the research findings, one reason why product innovation elevates supply chain disruption risk is that greater product variety can lead to greater complexity in the supply chain.
However, the paper also identified ways that manufacturers could reduce the supply chain disruption risk. According to the researchers, manufacturers engaging in product innovations should also invest both in strengthening their network position with their suppliers and in their capability to access, integrate, and utilize relevant external knowledge.
“Supply chain disruptions are unavoidable and often beyond the control of any one company,” says Rungtusanatham. “But our research shows one of the dark sides of product innovation, which is the negative consequences it can create throughout supply chains because of higher product variety and greater supplier dependence.”
Professor Rungtusanatham is available for interviews about the research findings. A copy of the study is available upon request.