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

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

Sustainability Analysis under Disruption Risks

Resilience to disruptions and sustainability are both of paramount importance to supply chains. This paper presents a hybrid methodology for the design of a sustainable supply network that performs resiliently in the face of random disruptions. A stochastic bi-objective optimization model is developed that utilizes a fuzzy c-means clustering method to quantify and assess the sustainability performance of the suppliers. The proposed model determines outsourcing decisions and buttressing strategies that minimize the expected total cost and maximize the overall sustainability performance in disruptions. Important managerial insights and practical implications are obtained from the model implementation in a case study of plastic pipe industry

A contribution to supply chain design under uncertainty

Dans le contexte actuel des chaînes logistiques, des processus d'affaires complexes et des partenaires étendus, plusieurs facteurs peuvent augmenter les chances de perturbations dans les chaînes logistiques, telles que les pertes de clients en raison de l'intensification de la concurrence, la pénurie de l'offre en raison de l'incertitude des approvisionnements, la gestion d'un grand nombre de partenaires, les défaillances et les pannes imprévisibles, etc. Prévoir et répondre aux changements qui touchent les chaînes logistiques exigent parfois de composer avec des incertitudes et des informations incomplètes. Chaque entité de la chaîne doit être choisie de façon efficace afin de réduire autant que possible les facteurs de perturbations. Configurer des chaînes logistiques efficientes peut garantir la continuité des activités de la chaîne en dépit de la présence d'événements perturbateurs. L'objectif principal de cette thèse est la conception de chaînes logistiques qui résistent aux perturbations par le biais de modèles de sélection d'acteurs fiables. Les modèles proposés permettent de réduire la vulnérabilité aux perturbations qui peuvent aV, oir un impact sur la continuité des opérations des entités de la chaîne, soient les fournisseurs, les sites de production et les sites de distribution. Le manuscrit de cette thèse s'articule autour de trois principaux chapitres: 1 - Construction d'un modèle multi-objectifs de sélection d'acteurs fiables pour la conception de chaînes logistiques en mesure de résister aux perturbations. 2 - Examen des différents concepts et des types de risques liés aux chaînes logistiques ainsi qu'une présentation d'une approche pour quantifier le risque. 3 - Développement d'un modèle d'optimisation de la fiabilité afin de réduire la vulnérabilité aux perturbations des chaînes logistiques sous l'incertitude de la sollicitation et de l'offre

Efficient multi-attribute auctions considering supply disruption

Although supply disruption is ubiquitous because of natural or man-made disasters, many firms still use the price-only reverse auction (only the cost is considered) to make purchase decisions. We first study the suppliers’ equilibrium bidding strategies and the buyer’s expected revenue under the first- and second-price price-only reverse auctions when the suppliers are unreliable and have private information on their costs and disruption probabilities. We show that the two auctions are equivalent and not efficient. Then we propose two easily implementable reverse auctions, namely the first-price and second-price format announced penalty reverse auction (APRA), and show that the “revenue equivalence principle” holds, i.e., the two auctions generate the same ex ante expected profit to the buyer. We further show that the two reverse auctions are efficient and “truth telling” is the suppliers’ dominant strategy in the second-price format APRA. We conduct numerical studies to assess the impacts of some parameters on the bidding strategies, the buyer’s profit and social profitPeer ReviewedPostprint (author's final draft

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

Comparison between minimum purchase, quantity flexibility contracts and spot procurement in a supply chain

When, in a supply chain, a supplier and a buyer have the choice of transaction form to do business, the equilibrium transaction form which emerges is much more constrained than previously envisaged in literature. In this paper, two forms of long-term supply contracts and procurement in the spot market are compared. A capacity constrained service provider and a buyer of such service choose among three different transaction forms: spot procurement, minimum purchase commitment and quantity flexibility contracts. The ultimate demand the buyer has to satisfy and the spot market price of the input she has to purchase from the supplier are exogenous stochastic processes. Complete analytical results and a numerical example are presented. This paper builds upon recent supply chain contract literature by trying to join in one setting problems which up till now were considered in isolation.contracts, supply chain, statistical decision theory, optimization techniques, transactional relationships

Supply Disruptions, Asymmetric Information and a Backup Production Option

We study a manufacturer that faces a supplier privileged with private information about supply disruptions. We investigate how risk-management strategies of the manufacturer change, and examine whether risk-management tools are more, or less, valuable, in the presence of such asymmetric information. We model a supply chain with one manufacturer and one supplier, in which the supplier's reliability is either high or low and is the supplier's private information. Upon disruption the supplier chooses between paying a penalty to the manufacturer for the shortfall and using backup production to fill the manufacturer's order. Using mechanism design theory, we derive the optimal contract menu offered by the manufacturer. We find that information asymmetry may cause the less reliable supplier type to stop using backup production while the more reliable supplier type continues to use it. Additionally, the manufacturer may stop ordering from the less reliable supplier type altogether. The value of backup production for the manufacturer is not necessarily larger under symmetric information and, for the more reliable supplier type, it could be negative . The manufacturer is willing to pay the most for information when backup production is moderately expensive. The value of information may increase as supplier types become uniformly more reliable. Thus, higher reliability need not be a substitute for better information.http://deepblue.lib.umich.edu/bitstream/2027.42/58722/1/1110-Damian.pd

Resilience in Humanitarian Supply Chains: A Focus on the Procurement Decisions

This thesis looks into how the need for resilience in humanitarian aid supply chains influences procurement strategy decisions. Increasingly, the need for resilience in supply chains has become undoubted and management researchers have prescribed diverse ways of pursuing it; not only so that supply chains may be better prepared to avoid, respond and recover from disruptions, but to also provide them with competitive advantage. Considering that the procurement function has gone beyond a simple business function to include the strategic management of resources and suppliers when pursuing supply chain resilience (SCR), the role of procurement decisions cannot be understated, especially as suppliers could become significant sources of disruptions. This is even more pronounced in humanitarian supply chains where disruptions do not only result in the loss of limited resources but sometimes human lives as well. Due to this criticality for resilience in humanitarian supply chains and the limited research here particularly from a procurement perspective, this research collects qualitative data through semi-structured interviews and document analysis from 8 UK-based humanitarian organisations. The data is analysed to identify how these organisations pursue SCR formative elements from a procurement perspective and also how pre-contract procurement decisions relative to inter-organisational interactions are guided by the need for resilience. Findings show that cross-training, flexible contracting, and financial resilience are critical to attaining SCR in humanitarian supply chains as they influence many of the identified formative elements. Differences are identified in the relationships between decisions taken under procurement strategy towards resilience from those in commercial supply chains, with monetary value and donor requirements being major influencing factors. Donor influence on procurement decisions in humanitarian organisations is identified to positively influence multiple formative elements including risk avoidance, sustainability, decision making and culture. It however inhibits flexibility and agility. Contributions from this research include the presentation of a theoretical framework on procurement strategy decisions towards achieving SCR. This is then empirically tested in UK humanitarian supply chain context and a simple but useful framework to aid managerial decision making in the sector is provided

Optimal Policies on Managing Drug Supply and Patient Access to Drugs

Health care decision-makers face several uncertainties regarding pharmaceutical products. For new and expensive drugs, the performance outside of clinical trials could be uncertain. For old and low-profit pharmaceutical products, the supply could be uncertain, causing drug shortages. In three essays, I study mitigating strategies to deal with different types of uncertainties associated with pharmaceutical products. In the first essay, I compare two types of pharmaceutical reimbursement contracts to mitigate the uncertainties associated with new and expensive drugs. I construct a game-theoretic model to analyze the interactions between a pharmaceutical manufacturer and a payer. The payer’s reimbursement of a drug is either related to the cost-effectiveness or the sales volume of the drug in the two contracts, respectively. I find key factors that determine the two parties’ preferences for the two contracts. I also find conditions under which each type is preferred by both parties and can achieve a Pareto improvement. In the second essay, I study mitigating strategies for drug shortage, which has become a serious problem in many countries in recent years. I construct a multi-period supply chain model to analyze the interactions between a representative hospital and an unreliable pharmaceutical manufacturer. The hospital owns an in-house manufacturer and can procure the drug from the two manufacturing facilities. I also assume that the hospital can make emergency production. I study the two parties’ procurement and production decisions and examine the impacts of the hospital’s optimal decisions on the external manufacturer’s profit. In the third essay, I study mitigating strategies for drug shortages from the governments’ perspective. I construct a game-theoretic model consisting of a pharmaceutical manufacturer, a wholesaler, and a government. I compare two types of mitigating strategies that the government can implement: providing subsidies to the wholesaler, or using a government-owned manufacturer. I identify key factors for the government’s preference over the two strategies and examine the impact on the private sector. The three essays have theoretical contributions to game theory and supply chain risk management literature and have policy implications for policymakers to manage drug supply and patient access to drugs