Steering through the storm: Environmental uncertainty and delivery performance

Abstract

We investigate the impact of Typhoon Lekima, a source of environmental uncertainty, on delivery performance, utilizing data from RiRiShun Logistics. We apply a staggered difference-in-differences model across low-complexity and high-complexity supply chains. The analysis uncovers distinct dynamics throughout the typhoon’s forecast, active, and recovery phases. Notably, the active phase experiences less disruption in delivery performance compared to the forecast phase, owing to RiRiShun’s wait-and-see policy. This approach leads to order accumulation but subsequently enables more effective resource allocation. In the recovery phase, high-complexity supply chains demonstrate significant improvements, surpassing pre-disaster performance levels. The study further emphasizes the critical role of two response mechanisms in managing high-complexity supply chains. Increasing throughput efficiencies at destination centers and implementing transfer centers prove effective in enhancing delivery performance during both the forecast and active phases. However, the simultaneous application of these response mechanisms during the forecast phase unexpectedly reduces performance.