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

Area of Science:

• Network science
• Supply chain management
• Economic complexity

Background:

• Understanding the topological properties of global supply chains is crucial for assessing their efficiency.
• Previous research proposed efficient supply chain propositions based on network characteristics.
• The structure and dynamics of global supply chains remain complex and require further investigation.

Purpose of the Study:

• To analyze the topological properties of the global supply chain network using 2017 data.
• To test the efficient supply chain propositions proposed by Hearnshaw et al.
• To provide a conceptual addition to the short path length proposition by analyzing the bow-tie structure.

Main Methods:

• Collected global supply chain data from Standard & Poor's Capital IQ platform for 2017.
• Analyzed network properties including degree distribution, clustering coefficient, degree-degree correlation, bow-tie structure, and community structure.
• Applied network analysis techniques to characterize the giant weakly connected component (GWCC) and giant strong connected component (GSCC).

Main Results:

• The in- and out-degree distributions follow a power law with exponents γin = 2.42 and γout = 2.11.
• The clustering coefficient decays with an exponent βk = 0.46, and no assortativity was found in nodal degree-degree correlations.
• The bow-tie structure's OUT component is largest (41.1%), and the giant strong connected component (GSCC) comprises 16.4% of firms, with upstream/downstream firms located a few steps away.

Conclusions:

• The study confirms the validity of Hearnshaw et al.'s efficient supply chain propositions (S1-S5, S7) for the global supply chain network.
• The analysis of the bow-tie structure provides a conceptual addition to Proposition S1, detailing short path lengths from the GSCC to IN and OUT components.
• The largest community identified belongs to the consumer discretionary sector in the US, residing within the OUT component of the bow-tie structure.