The Dark and Bright Sides of Complexity: A Dual Perspective on Supply Network Resilience

Supply networks are regularly affected by events that trigger supply disruptions, entailing severe consequences for firms and their supply networks. Hence, the ability of firms to withstand and recover from disruptions (i.e., their resilience) is vital to their long-term survival. Prior research suggests that the complexity of a firm’s supply network is critical in determining its resilience to disruptions, but tensions arise when delineating the precise nature of the relationship between supply network complexity and resilience. In this research, we investigate whether and how three facets of supply network complexity—supply complexity (nodes in the network), logistics complexity (arcs in the network), and product complexity (contents moving through the network)—influence a firm’s ability to resist and recover from disruptions. We empirically investigate this relationship in the context of automotive sector shipments from Japan to the United States before, during, and after the 2011 Japanese Earthquake and Tsunami, using the difference-in-differences technique. Results indicate that the relationship between supply network complexity and resilience is multifaceted; some aspects of supply network complexity intensify disruption impact, whereas others enhance disruption recovery.