The aim of this COVID-19 Rapid Response project was to quantify the vulnerability of the Austrian supply chain network (SCN) to pandemic-induced firm shut downs. We have developed the necessary methodology for identifying highly critical firms in SCNs, which would cause large domino effects and thus large parts of the Austrian economy to stand still. At the same time these firms are also crucial for the restart of the economy after a major lockdown.

With the help of this WWTF grant we have designed and conducted a large-scale survey to collect data on approx. 19.000 buyer-supplier-relationships of almost 6.000 firms in the Austrian supply chain network. We find that approx. 30% of the companies have to completely shut down their production if one of their suppliers is unable to deliver. Similarly, more than 60% of the companies have a supplier, which, if unable to deliver, could cause more than half of their production to shut down. Especially alarming is the fact that less than 40% of the companies named a replacement for their most critical suppliers.

These numbers are surprisingly high and indicate that the failure of a small number of firms can have potentially dangerous and far reaching consequences for the Austrian economy. From the approx. 19.000 buyer-supplier-links we could reconstruct the – so far – largest subset of the Austrian supply chain network. Our preliminary results show that the shutdown of the most central company in this network would affect the production of up to 200 firms or roughly 3% of the network. If these numbers are also confirmed for the entire Austrian supplier network, the shutdown of only a few firms could be sufficient to cause major stand stills in the Austrian economy. Thus, for the current and future crises it is of utmost importance to have a clear picture of the Austrian supply chain network in order to be able to assess the risk of major supply chain failures and identify the most critical firms, which need to be protected under all circumstances.

In a second stream of the project we have developed, in cooperation with FH OÖ, Vetmeduni Vienna and BOKU Vienna, the necessary tools and methodology to conduct a near real-time monitoring of systemic risk in the Austrian food supply network. Such a monitoring system could help to avoid, in times of crisis, shortages in the local food supply of the Austrian population by providing decision makers with insights at an early stage about the possible effects of firm shutdowns.