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Testing “efficient supply chain propositions” using topological characterization of the global supply chain network

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  • Abhijit Chakraborty
  • Yuichi Ikeda

Abstract

In this paper, we study the topological properties of the global supply chain network in terms of its degree distribution, clustering coefficient, degree-degree correlation, bow-tie structure, and community structure to test the efficient supply chain propositions proposed by E. J.S. Hearnshaw et al. The global supply chain data in the year 2017 are constructed by collecting various company data from the web site of Standard & Poor’s Capital IQ platform. The in- and out-degree distributions are characterized by a power law of the form of γin = 2.42 and γout = 2.11. The clustering coefficient decays 〈 C ( k ) 〉 ∼ k - β k with an exponent βk = 0.46. The nodal degree-degree correlations 〈knn(k)〉 indicates the absence of assortativity. The bow-tie structure of giant weakly connected component (GWCC) reveals that the OUT component is the largest and consists 41.1% of all firms. The giant strong connected component (GSCC) is comprised of 16.4% of all firms. We observe that upstream or downstream firms are located a few steps away from the GSCC. Furthermore, we uncover the community structures of the network and characterize them according to their location and industry classification. We observe that the largest community consists of the consumer discretionary sector based mainly in the United States (US). These firms belong to the OUT component in the bow-tie structure of the global supply chain network. Finally, we confirm the validity of Hearnshaw et al.’s efficient supply chain propositions, namely Proposition S1 (short path length), Proposition S2 (power-law degree distribution), Proposition S3 (high clustering coefficient), Proposition S4 (“fit-gets-richer” growth mechanism), Proposition S5 (truncation of power-law degree distribution), and Proposition S7 (community structure with overlapping boundaries) regarding the global supply chain network. While the original propositions S1 just mentioned a short path length, we found the short path from the GSCC to IN and OUT by analyzing the bow-tie structure. Therefore, the short path length in the bow-tie structure is a conceptual addition to the original propositions of Hearnshaw.

Suggested Citation

  • Abhijit Chakraborty & Yuichi Ikeda, 2020. "Testing “efficient supply chain propositions” using topological characterization of the global supply chain network," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-18, October.
  • Handle: RePEc:plo:pone00:0239669
    DOI: 10.1371/journal.pone.0239669
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    1. Mizuno, Takayuki & Ohnishi, Takaaki & Watanabe, Tsutomu, 2016. "Structure of global buyer-supplier networks and its implications for conflict minerals regulations," HIT-REFINED Working Paper Series 38, Institute of Economic Research, Hitotsubashi University.
    2. Tang, Liang & Jing, Ke & He, Jie & Stanley, H. Eugene, 2016. "Complex interdependent supply chain networks: Cascading failure and robustness," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 443(C), pages 58-69.
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    Cited by:

    1. Abhijit Chakraborty & Tobias Reisch & Christian Diem & Pablo Astudillo-Estévez & Stefan Thurner, 2024. "Inequality in economic shock exposures across the global firm-level supply network," Nature Communications, Nature, vol. 15(1), pages 1-8, December.
    2. Xiongping Yue & Dong Mu & Chao Wang & Huanyu Ren & Jianbang Du & Pezhman Ghadimi, 2024. "Disruption risks to Chinese overseas flat panel display supply networks under China’s zero-COVID policy," Operations Management Research, Springer, vol. 17(2), pages 406-437, June.
    3. Xing Chen & Eunmi Jang, 2022. "A Sustainable Supply Chain Network Model Considering Carbon Neutrality and Personalization," Sustainability, MDPI, vol. 14(8), pages 1-23, April.
    4. Hempfing, Alexander & Mundt, Philipp, 2022. "Tie formation in global production chains," BERG Working Paper Series 181, Bamberg University, Bamberg Economic Research Group.

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