Managing inventory in global supply chains facing port-of-entry disruption risks

Ports-of-entry are critical components of the modern international supply chain infrastructure, particularly container seaports and airfreight hubs. The potential operational and economic impact resulting from their temporary closure is unknown, but is widely believed to be very significant. This paper investigates one aspect of this potential impact, focusing specifically on the use of supply chain inventory as a risk mitigation strategy for a one supplier, one customer system in which goods are transported through a port-of-entry subject to temporary closures. Closure likelihood and duration are modeled using a completely observed, exogenous Markov chain. Order lead times are dependent on the status of the port-of-entry, including potential congestion backlogs of unprocessed work. An infinite-horizon, periodic-review inventory control model is developed to determine the optimal average cost ordering policies under linear ordering costs with backlogged demand. When congestion is negligible, the optimal policy is state invariant. In the more complex case of non-negligible congestion, this result no longer holds. For studied scenarios, numerical results indicate that operating margins may decrease 10% for reasonable-length port-of-entry closures, that margins may be eliminated completely without contingency plans, and expected holding and penalty costs may increase 20% for anticipated increases in port-of-entry utilization

Modelling the impact of liner shipping network perturbations on container cargo routing: Southeast Asia to Europe application

Understanding how container routing stands to be impacted by different scenarios of liner shipping network perturbations such as natural disasters or new major infrastructure developments is of key importance for decision-making in the liner shipping industry. The variety of actors and processes within modern supply chains and the complexity of their relationships have previously led to the development of simulation-based models, whose application has been largely compromised by their dependency on extensive and often confidential sets of data. This study proposes the application of optimisation techniques less dependent on complex data sets in order to develop a quantitative framework to assess the impacts of disruptive events on liner shipping networks. We provide a categorization of liner network perturbations, differentiating between systemic and external and formulate a container assignment model that minimises routing costs extending previous implementations to allow feasible solutions when routing capacity is reduced below transport demand. We develop a base case network for the Southeast Asia to Europe liner shipping trade and review of accidents related to port disruptions for two scenarios of seismic and political conflict hazards. Numerical results identify alternative routing paths and costs in the aftermath of port disruptions scenarios and suggest higher vulnerability of intra-regional connectivity

Modelling the impact of liner shipping network perturbations on container cargo routing: Southeast Asia to Europe application

Understanding how container routing stands to be impacted by different scenarios of liner shipping network perturbations such as natural disasters or new major infrastructure developments is of key importance for decision-making in the liner shipping industry. The variety of actors and processes within modern supply chains and the complexity of their relationships have previously led to the development of simulation-based models, whose application has been largely compromised by their dependency on extensive and often confidential sets of data. This study proposes the application of optimisation techniques less dependent on complex data sets in order to develop a quantitative framework to assess the impacts of disruptive events on liner shipping networks. We provide a categorization of liner network perturbations, differentiating between systemic and external and formulate a container assignment model that minimises routing costs extending previous implementations to allow feasible solutions when routing capacity is reduced below transport demand. We develop a base case network for the Southeast Asia to Europe liner shipping trade and review of accidents related to port disruptions for two scenarios of seismic and political conflict hazards. Numerical results identify alternative routing paths and costs in the aftermath of port disruptions scenarios and suggest higher vulnerability of intra-regional connectivity

​Resilient supply chain network design under competition : a case study

This research, motivated by a real-life case study in a highly competitive automobile supply chain, experimentally studies the impact of disruption on the competitiveness of supply chains. The studied supply chain faces two major risks: disruption of suppliers and tough competition from competitors. Any disruption in upstream level of the supply chain leads to an inability to meet demand downstream and causes market share to be lost to the competitors. For such a setting, a resilient topology is redesigned that can recover from and react quickly to any disruptive incidents. To this aim, we speculate there are three policies that can be used to mitigate the disruption risk, namely keeping emergency stock at the retailers, reserving back-up capacity at the suppliers, and multiple-sourcing. The problem is addressed using a mixed integer non-linear model to find the most profitable network and mitigation policies. We design a piecewise linear method to solve the model. Based on the data extracted from an automotive supply chain, practical insights of the research are extracted in a controlled experiment. Our analysis suggests that implementing risk mitigation policies not only work to the advantage of the supply chain by sustaining and improving its market share but also benefit customers by stabilizing retail prices in the market. Using the case study, we analyze the contribution of each risk strategy in stabilizing the supply chain's profit, market share, and retail price. Our analysis reveals that downstream “emergency stock” is the most preferable risk mitigation strategy if suppliers are unreliable

Strategies to Mitigate Supply Chain Disruption Risks

Businesses with global supply chains typically have a minimum of 1 interruption to their supply chain annually, which can decrease profitability and affect overall company performance. The purpose of this multiple case study was to explore strategies personal care business supply chain managers used to mitigate supply chain disruption risk. The targeted population was 9 supply chain managers working in 5 different Fortune 500 consumer packaged goods personal care companies in the northeastern United States who have successfully used strategies to mitigate supply chain disruptions. Corporate risk management was used as the conceptual framework of the study to determine how company leaders plan for supply chain disruptions and how leaders prioritize and resource implementation and assessment of these plans. Data collection included semistructured interviews, with review of each company\u27s documents as the secondary source of data. Data were analyzed using thematic analysis. Two main themes emerged: identification of a qualified alternative supplier is a common strategy in supply chain disruption mitigation plans, and business top management support is essential in the execution of supply chain disruption plans and strategies. Results of this study might contribute to social change by empowering supply managers to make alternative choices relative to suppliers that will make products more affordable to consumers. An empowered supply management team leads to high return of investments for companies, which can support employment and additional tax revenue to support social programs

Managing Supply Chain Disruptions in Nigerian Seaport Companies

In Nigeria, seaport companies have lost significant revenue since 2000 because of supply chain disruptions. If not mitigated, supply chain disruptions at Nigerian seaports will significantly affect organizational output and profitability. The purpose of this research was to explore strategies some seaport business leaders use to mitigate supply chain disruptions in Lagos, Nigeria. Supply chain management theory was the conceptual framework for this single case study. Data were collected using semistructured interviews with 4 participants from a Nigerian seaport company tbat adopted successful strategies to mitigate supply chain disruptions and review of company documents for methodological triangulation. Using thematic analysis, the 5 primary themes were corruption, seaport congestion, bureaucratic bottleneck, equipment failures, and employee disputes. Customer satisfaction and business profitability were 2 primary strategies the business leaders in the study used to mitigate supply chain disruptions. By implementing the strategies identified in the study, business leaders in the Nigerian seaport sector may be able to bring about positive social change by increasing business profitability. The strategies could increase employment opportunities for people in seaport cities, thereby decreasing the poverty level and leading to a better standard of living for residents

Supply chain risk management and the role of organisation culture : evidence from Libyan ports

Seaports are one of the main facilitators of economic growth as they create trade and jobs globally. Particularly in African countries, where they are considered as focal points for oil and gas exportation with both neighbouring and developed countries. As a result, Supply Chain Risk Management or SCRM has become increasingly significant. This research focuses on the context of North African countries, specifically Libya, which is currently suffering from a leadership crisis, violent and political conflict, armed groups and a risky geographical location. All of which relate to and help to build connections within the context of national and organisational culture and the impact of SCRMP on Libyan Ports (LPs). By understanding these connections, these ports could then improve their working conditions, whilst becoming aware of internal and external factors and their impact on survival. This research aims to develop and aid understanding of the impact of SCRM on LPs and how these risk management practices are linked with both national and organisational culture. The focus will be on both internal and external factors, which may influence either positively or negatively. In order to comprehensively understand the topic, this research considers; experience, background, opinions, suggestions, situations, context, culture, and the environment. A pilot study will be conducted with 32 supervisors from four major Libyan ports; Misurata, Khoms, Tripoli, and Benghazi, being interviewed. The main findings highlighting the negative influence of factors such as high-power distance, authority, uncertainty avoidance, political involvement, centralisation, nepotism and low levels of long-term decision making on the SCRMP operations of Libyan Ports (LPs). Ultimately, a conceptual framework will be developed to aid understanding of how the top management of ports in developing countries could be improved using SCRMP