A quantitative model for disruption mitigation in a supply chain

© 2016 Elsevier B.V. In this paper, a three-stage supply chain network, with multiple manufacturing plants, distribution centers and retailers, is considered. For this supply chain system we develop three different approaches, (i) an ideal plan for an infinite planning horizon and an updated plan if there are any changes in the data, (ii) a predictive mitigation planning approach for managing predictive demand changes, which can be predicted in advance by using an appropriate tool, and (iii) a reactive mitigation plan, on a real-time basis, for managing sudden production disruptions, which cannot be predicted in advance. In predictive mitigation planning, we develop a fuzzy inference system (FIS) tool to predict the changes in future demand over the base forecast and the supply chain plan is revised accordingly well in advance. In reactive mitigation planning, we formulate a quantitative model for revising production and distribution plans, over a finite future planning period, while minimizing the total supply chain cost. We also consider a series of sudden disruptions, where a new disruption may or may not affect the recovery plans of earlier disruptions and which consequently require plans to be revised after the occurrence of each disruption on a real-time basis. An efficient heuristic, capable of dealing with sudden production disruptions on a real-time basis, is developed. We compare the heuristic results with those obtained from the LINGO optimization software for a good number of randomly generated test problems. Also, some numerical examples are presented to explain both the usefulness and advantages of the proposed approaches

National Culture\u27s Impact on Effectiveness of Supply Chain Disruption Management

The purpose of this research is to understand the national cultural antecedents that may help explain differences in supply chain disruptions mitigation abilities of companies from different countries. An analysis of survey data on disruption planning and response collected from various organizations worldwide was performed using weighted least square regression and factor analysis. We find that culture influences disruption planning and response. Statistical findings suggest that differences in disruption planning and response abilities between companies from different countries could be partly attributed to national culture. All five Hofstede’s dimensions of national culture, i.e., Power Distance, Individualism, Masculinity, Uncertainty Avoidance, and Long-term Orientation were shown to have a significant positive effect on disruption planning and response. National cultural dimensions and economic status of a country could be effectively used to predict disruption planning and response abilities of companies in various countries. Managers could benefit from our research as it could help them assess disruptions mitigation abilities of their partners located in other countries. Increasing international trade and globalization of supply chains accentuate the importance of our research

Measuring information security breach impact and uncertainties under various information sharing scenarios

This study draws on information theory and aims to provide simulated evidence using real historical and statistical data to demonstrate how various levels of integration moderate the impact and uncertainties of information security breach on supply chain performance. We find that the supply chain behaves differently under various levels of integration when a security breach occurs. The entropy analysis revealed that the wholesaler experience the most uncertainty under system failure and data corruption. This sort of impact-uncertainty information will aid in designing and managing a resilient supply chain poised for minimal breach impact

Supply chain uncertainty:a review and theoretical foundation for future research

Supply-chain uncertainty is an issue with which every practising manager wrestles, deriving from the increasing complexity of global supply networks. Taking a broad view of supply-chain uncertainty (incorporating supply-chain risk), this paper seeks to review the literature in this area and develop a theoretical foundation for future research. The literature review identifies a comprehensive list of 14 sources of uncertainty, including those that have received much research attention, such as the bullwhip effect, and those more recently described, such as parallel interaction. Approaches to managing these sources of uncertainty are classified into: 10 approaches that seek to reduce uncertainty at its source; and, 11 approaches that seek to cope with it, thereby minimising its impact on performance. Manufacturing strategy theory, including the concepts of alignment and contingency, is then used to develop a model of supply-chain uncertainty, which is populated using the literature review to show alignment between uncertainty sources and management strategies. Future research proposed includes more empirical research in order to further investigate: which uncertainties occur in particular industrial contexts; the impact of appropriate sources/management strategy alignment on performance; and the complex interplay between management strategies and multiple sources of uncertainty (positive or negative)

An integrated approach to supply chain risk analysis

Despite the increasing attention that supply chain risk management is receiving by both researchers and practitioners, companies still lack a risk culture. Moreover, risk management approaches are either too general or require pieces of information not regularly recorded by organisations. This work develops a risk identification and analysis methodology that integrates widely adopted supply chain and risk management tools. In particular, process analysis is performed by means of the standard framework provided by the Supply Chain Operations Reference Model, the risk identification and analysis tasks are accomplished by applying the Risk Breakdown Structure and the Risk Breakdown Matrix, and the effects of risk occurrence on activities are assessed by indicators that are already measured by companies in order to monitor their performances. In such a way, the framework contributes to increase companies' awareness and communication about risk, which are essential components of the management of modern supply chains. A base case has been developed by applying the proposed approach to a hypothetical manufacturing supply chain. An in-depth validation will be carried out to improve the methodology and further demonstrate its benefits and limitations. Future research will extend the framework to include the understanding of the multiple effects of risky events on different processe

A systems thinking approach for modelling supply chain risk propagation

Supply Chain Risk Management (SCRM) is rapidly becoming a most sought after research area due to the influence of recent supply chain disruptions on global economy. The thesis begins with a systematic literature review of the developments within the broad domain of SCRM over the past decade. Thematic and descriptive analysis supported with modern knowledge management techniques brings forward seven distinctive research gaps for future research in SCRM. Overlapping research findings from an industry perspective, coupled with SCRM research gaps from the systematic literature review has helped to define the research problem for this study. The thesis focuses on a holistic and systematic approach to modelling risks within supply chain and logistics networks. The systems thinking approach followed conceptualises the phenomenon of risk propagation utilising several recent case studies, workshop findings and focus studies. Risk propagation is multidimensional and propagates beyond goods, finance and information resource. It cascades into technology, human resource and socio-ecological dimensions. Three risk propagation zones are identified that build the fundamentals for modelling risk behaviour in terms of cost and delay. The development of a structured framework for SCRM, a holistic supply chain risk model and a quantitative research design for risk assessment are the major contributions of this research. The developed risk assessment platform has the ability to capture the fracture points and cascading impact within a supply chain and logistics network. A reputed aerospace and defence organisation in UK was used to test the experimental modelling set up for its viability and for bridging the gap between theory and practice. The combined statistical and simulation modelling approach provides a new perspective to assessing the complex behavioural performance of risks during multiple interactions within network

Framework For Effective Resilience Managmenet Of Complex Supply Networks

In today\u27s environment with high global and complex supply chains for engineered products, the ability to assess and manage the resilience of supply chains is not a luxury but a fundamental prerequisite for business continuity and success. This is particularly true for firms with deep-tier supply chains, such as the automotive original equipment manufacturers (OEMs) and their suppliers. Automotive supply networks are particularly facing growing challenges due to their complexity, globalization, economic volatility, rapidly changing technologies, regulations, and environmental/political shocks. These risks and challenges can disrupt and halt operations in any section of the supply network. Given that supply chains have become quite lean in the 21st century with relatively little slack, the COVID-19 pandemic has fully exposed these vulnerabilities. According to Allianz\u27s Business Risk Report from 2014, half of all supply chain disruptions stemming from tier-2 and tier-3 suppliers. However, the industry\u27s supply network assessment practice is primarily limited to immediate (i.e., tier-1 ) suppliers with no real consideration for the deep-tiers. The added complication due to poor supplier relations is that there is no visibility to the upstream deeper-tiers of the supply network, which could lead to severe vulnerabilities and impose massive disruption costs. Our research goal is to enhance the resilience of deep-tier automotive supply networks through improved resilience assessment and management mechanisms. In this collaborative study with a global automotive OEM (Ford Motor Company), we seek to develop methods to assess and manage the resilience of deep-tier supply networks. This research considers the multi-dimensional nature of resilience management, focusing on metrics around cost efficiency, effective inventory management, demand fulfillment, capacity management, and delivery performance. We develop and evaluate our proposed resilience assessment and management framework with a real case study supply network for an automotive climate control system. The supply network contains 20 firms (nodes) located in various global regions and 21 connections (edges) between firms. The network includes three tiers of suppliers with different transportation modes, making the network a rich illustrative example for proposed resilience assessment and management methods and analysis. All inventory and shipping policies with related parameters have been defined and set for each supplier and their connections. The proposed resilience assessment framework relies on discrete-event simulation for effectiveness; computational efficiency is maintained by relying on modern open-source packages for modeling, optimization, and analysis. The framework starts by generating a digital supply network model that includes the focal firm and its suppliers and deeper-tiers based on the available visibility. Disruption scenarios, including disruption sources, frequency, and severity, are then efficiently generated using private and public regional risk sources. For illustrative purposes, we primarily relied on public secondary data sources. The secondary regional risk indices that we relied upon aggregate political, economic, legal, operational, and security risks for the given region. Finally, the digital supply network is simulated with an adequate number of replications for reliable assessment. In this research, discrete-event simulation is implemented using NetworkX and SimPy Python packages. We employ the network analysis techniques combined with discrete-event simulation informed by secondary data sources for improving the assessment framework. Our resilience assessment results confirm that visibility into the deeper-tiers of the supply network (through primary or secondary data sources) leads to a more accurate network resilience assessment. Finally, we offer a global sensitivity analysis procedure to determine the supply network players, parameters, and policies that most influence the network performance. We also propose an effective resilience management framework that efficiently leverages simulation-based optimization. For illustrative purposes, we considered the mitigation strategies typical in the automotive industry, such as dual sourcing, reserve capacities (at primary or secondary suppliers), and contracts with backup suppliers besides carrying safety stock. Sourcing and transportation mode decisions can be easily incorporated into the framework. The method seeks to minimize the cost of risk mitigation strategies while attaining the target resilience. The framework is flexible and can entertain other objectives and constraints. Given that simulation-based optimization methods can be computationally expensive, we employ surrogate models that relate supply network resilience performance to network design parameters within our mathematical programming formulation. Without loss of generality, the surrogate models are based on linear regression models that define the relationship between the focal firm and tier-1 suppliers\u27 resilience levels and network design decision variables. The imperfections of the regression models are accounted for in the formulation through constraints with slack (function of the RMSE of the regression model). We demonstrate that optimal resilience management would stem from jointly allocating safety buffers (e.g., capacity, inventory levels) across the network and not by independently applying a simplistic/static set of rules for all nodes/arcs. Our validation experiments with a real-world case study informed by secondary data from public data sources confirm the effectiveness and efficiency of the proposed supply network resilience management method

Review of Quantitative Methods for Supply Chain Resilience Analysis

Supply chain resilience (SCR) manifests when the network is capable to withstand, adapt, and recover from disruptions to meet customer demand and ensure performance. This paper conceptualizes and comprehensively presents a systematic review of the recent literature on quantitative modeling the SCR while distinctively pertaining it to the original concept of resilience capacity. Decision-makers and researchers can benefit from our survey since it introduces a structured analysis and recommendations as to which quantitative methods can be used at different levels of capacity resilience. Finally, the gaps and limitations of existing SCR literature are identified and future research opportunities are suggested

A mathematical modelling approach for managing sudden disturbances in a three-tier manufacturing supply chain

© 2019, Springer Science+Business Media, LLC, part of Springer Nature. This paper aims to develop a recovery planning approach in a three-tier manufacturing supply chain, which has a single supplier, manufacturer, and retailer under an imperfect production environment, in which we consider three types of sudden disturbances: demand fluctuation, and disruptions to production and raw material supply, which are not known in advance. Firstly, a mathematical model is developed for generating an ideal plan under imperfect production for a finite planning horizon while maximizing total profit, and then we re-formulate the model to generate the recovery plan after happening of each sudden disturbance. Considering the high commercial cost and computational intensity and complexity of this problem, we propose an efficient heuristic, to obtain a recovery plan, for each disturbance type, for a finite future period, after the occurrence of a disturbance. The heuristic solutions are compared with a standard solution technique for a considerable number of random test instances, which demonstrates the trustworthy performance of the developed heuristics. We also develop another heuristic for managing the combined effects of multiple sudden disturbances in a period. Finally, a simulation approach is proposed to investigate the effects of different types of disturbance events generated randomly. We present several numerical examples and random experiments to explicate the benefits of our developed approaches. Results reveal that in the event of sudden disturbances, the proposed mathematical and heuristic approaches are capable of generating recovery plans accurately and consistently

Agribusiness supply chain risk management: A review of quantitative decision models

Supply chain risk management is a large and growing field of research. However, within this field, mathematical models for agricultural products have received relatively little attention. This is somewhat surprising as risk management is even more important for agricultural supply chains due to challenges associated with seasonality, supply spikes, long supply lead-times, and perishability. This paper carries out a thorough review of the relatively limited literature on quantitative risk management models for agricultural supply chains. Specifically, we identify robustness and resilience as two key techniques for managing risk. Since these terms are not used consistently in the literature, we propose clear definitions and metrics for these terms; we then use these definitions to classify the agricultural supply chain risk management literature. Implications are given for both practice and future research on agricultural supply chain risk management