Managing Risks in Just-In-Sequence Supply Networks: Exploratory Evidence From Automakers

Today's automakers are under an enormous price and cost pressure arising from both increasing competition and complexity of operations. One way to deal with this challenge is to outsource value creation to the supply network (SN), which then assumes the responsibility for producing variant-specific modules and delivering them just-in-sequence (JIS). This results in tightly coupled buyer-supplier relationships that operate with short reaction times and are characterized by high time dependency and minimal buffers. It increases the risk exposure of buyers to disturbances in their SNs and failures propagate quickly, causing production disruptions. Based on data collected at 14 car-manufacturing plants located in Germany, this research provides an overview and exploratory evidence of current JIS market practice and proposes ways of actively managing the risks inherent in JIS SNs.