Supply Chain Integration: A Behavioral Study Using NK Simulation

This chapter investigates the benefits of supply chain integration (SCI) by including behavioral factors influencing decision-maker behavior. In fact, the majority of the studies on the topic assume that SCI is pursued by a central planner, which is completely rational and adopts an optimizing behavior. Since the central planner is an individual, such assumptions appear to be too simplistic. In particular, I focus the attention on two main behavioral factors: (1) cognitive capacity and (2) resistance to change. Managers in fact differ in terms of ability to solve a problem. This depends on their ability to conceive alternatives solutions to test and on their cognitive limit in comparing alternatives and recognizing the best one. Resistance to change is an attitude of individuals who are averse to risk and prefer not to modify/try new solutions for fear of poor outcomes, fear of the unknown, or/and fear of realization of faults. To pursue the research aim a simulation analysis using NK fitness landscape is carried out, in which a central planner characterized by four increasing levels of cognitive capability and two levels of resistance to change is engaged to manage a supply chain in an integrated manner. Three types of supply chain structures characterized by increasing complexity are considered and their performances measured. Results show that supply chain performance increases as the level of cognitive capacity improves in all the supply chain structures, while resistance to change decreases supply chain performance even if the effect on performance is quite low.