The moderating impact of supply network topology on the effectiveness of risk management

While supply chain risk management offers a rich toolset for dealing with risk at the dyadic level, less attention has been given to the effectiveness of risk management in complex supply networks. We bridge this gap by building an agent based model to explore the relationship between topological characteristics of complex supply networks and their ability to recover through inventory mitigation and contingent rerouting. We simulate upstream supply networks, where each agent represents a supplier. Suppliers’ connectivity patterns are generated through random and preferential attachment models. Each supplier manages its inventory using an anchor-and-adjust ordering policy. We then randomly disrupt suppliers and observe how different topologies recover when risk management strategies are applied. Our results show that topology has a moderating effect on the effectiveness of risk management strategies. Scale-free supply networks generate lower costs, have higher fill-rates, and need less inventory to recover when exposed to random disruptions than random networks. Random networks need significantly more inventory distributed across the network to achieve the same fill rates as scale-free networks. Inventory mitigation improves fill-rate more than contingent rerouting regardless of network topology. Contingent rerouting is not effective for scale-free networks due to the low number of alternative suppliers, particularly for short-lasting disruptions. We also find that applying inventory mitigation to the most disrupted suppliers is only effective when the network is exposed to frequent disruptions; and not cost effective otherwise. Our work contributes to the emerging field of research on the relationship between complex supply network topology and resilience

Topological robustness of the global automotive industry

The manufacturing industry is characterized by large-scale interdependent networks as companies buy goods from one another, but do not control or design the overall flow of materials. The result is a complex emergent structure with which companies connect to each other. The topology of this structure impacts the industry’s robustness to disruptions in companies, countries, and regions. In this work, we propose an analysis framework for examining robustness in the manufacturing industry and validate it using an empirical dataset. Focusing on two key angles, suppliers and products, we highlight macroscopic and microscopic characteristics of the network and shed light on vulnerabilities of the system. It is shown that large-scale data on structural interdependencies can be examined with measures based on network science

Bayesian Autoencoders for Drift Detection in Industrial Environments

Autoencoders are unsupervised models which have been used for detecting anomalies in multi-sensor environments. A typical use includes training a predictive model with data from sensors operating under normal conditions and using the model to detect anomalies. Anomalies can come either from real changes in the environment (real drift) or from faulty sensory devices (virtual drift); however, the use of Autoencoders to distinguish between different anomalies has not yet been considered. To this end, we first propose the development of Bayesian Autoencoders to quantify epistemic and aleatoric uncertainties. We then test the Bayesian Autoencoder using a real-world industrial dataset for hydraulic condition monitoring. The system is injected with noise and drifts, and we have found the epistemic uncertainty to be less sensitive to sensor perturbations as compared to the reconstruction loss. By observing the reconstructed signals with the uncertainties, we gain interpretable insights, and these uncertainties offer a potential avenue for distinguishing real and virtual drifts

Learning With Imbalanced Data in Smart Manufacturing: A Comparative Analysis

The Internet of Things (IoT) paradigm is revolutionising the world of manufacturing into what is known as Smart Manufacturing or Industry 4.0. The main pillar in smart manufacturing looks at harnessing IoT data and leveraging machine learning (ML) to automate the prediction of faults, thus cutting maintenance time and cost and improving the product quality. However, faults in real industries are overwhelmingly outweighed by instances of good performance (faultless samples); this bias is reflected in the data captured by IoT devices. Imbalanced data limits the success of ML in predicting faults, thus presents a significant hindrance in the progress of smart manufacturing. Although various techniques have been proposed to tackle this challenge in general, this work is the first to present a framework for evaluating the effectiveness of these remedies in the context of manufacturing. We present a comprehensive comparative analysis in which we apply our proposed framework to benchmark the performance of different combinations of algorithm components using a real-world manufacturing dataset. We draw key insights into the effectiveness of each component and inter-relatedness between the dataset, the application context, and the design of the ML algorithm

Analysing the evolution of aerospace ecosystem development.

Aerospace manufacturing industry is predicted to continue growing. Rising demand is triggering the current global aerospace ecosystem to evolve and adapt to challenges never faced before. New players into the aerospace manufacturing industry and the development of new ecosystems are evidencing its evolution. Understanding how the aerospace ecosystem has evolved is thus essential to prepare optimal conditions to nurture its growth. Recent studies have successfully combined economics and network science methods to map, analyse and predict the evolution of industrial ecosystems. In comparison to previous studies which apply network science-based methodologies to macro-economic research, this paper uses these methods to analyse the evolution of a particular industrial ecosystem, namely the aerospace sector. In particular, we develop bipartite country-product networks based on trade data over 25 years, to identify patterns and similarities in the evolution of developed aerospace manufacturing countries ecosystems. The analysis is elaborated at a macroscopic (network) and microscopic (nodes) levels. Motivated by studies in ecological networks, we use nestedness analysis to find patterns depicting the distribution and evolution of exported products across ecosystems. Our analysis reveals that developed ecosystems tend to become more analogous, as countries lean towards having a revealed comparative advantage (RCA) in the same group of products. Countries also tend to become more nested in their aerospace product space as they start developing a higher RCA. It is revealed that although countries develop an advantage on unique products, they also tend to increase competition with each other. Further analysis shows that manufactured products have a stronger correlation to an aerospace ecosystem than primary products; and in particular, the automotive sector shows the highest correlation with positive aerospace sector evolution. Competition between countries with well-developed aerospace ecosystems tends to centre on automotive parts, general industrial machinery, power generating machinery and equipment, and chemical materials and products

How does the position of firms in the supply chain affect their performance? An empirical study

AbstractThe relationship between a firm and its supply chain has been well studied, however, the association between the position of firms in complex supply chain networks and their performance has not been adequately investigated. This is primarily due to insufficient availability of empirical data on large-scale networks. To addresses this gap in the literature, we investigate the relationship between embeddedness patterns of individual firms in a supply network and their performance using empirical data from the automotive industry. In this study, we devise three measures that characterize the embeddedness of individual firms in a supply network. These are namely: centrality, tier position, and triads. Our findings caution us that centrality impacts individual performance through a diminishing returns relationship. The second measure, tier position, allows us to investigate the concept of tiers in supply networks because we find that as networks emerge, the boundaries between tiers become unclear. Performance of suppliers degrade as they move away from the focal firm (i.e., Toyota). The final measure, triads, investigates the effect of buying and selling to firms that supply the same customer, portraying the level of competition and cooperation in a supplier’s network. We find that increased coopetition (i.e., cooperative competition) is a performance enhancer, however, excessive complexity resulting from being involved in both upstream and downstream coopetition results in diminishing performance. These original insights help understand the drivers of firm performance from a network perspective and provide a basis for further research.</jats:p

Digital supply chain surveillance using artificial intelligence: definitions, opportunities and risks

Digital Supply Chain Surveillance (DSCS) is the proactive monitoring and analysis of digital data that allows firms to extract information related to a supply network, without the explicit consent of firms involved in the supply chain. AI has made DSCS to become easier and larger-scale, posing significant opportunities for automated detection of actors and dependencies involved in a supply chain, which in turn, can help firms to detect risky, unethical and environmentally unsustainable practices. Here, we define DSCS, review priority areas using a survey conducted in the UK. Visibility, sustainability, resilience are significant areas that DSCS can support, through a number of machine-learning approaches and predictive algorithms. Despite anecdotal narrative on the importance of explainability of algorithmic results, practitioners often prefer accuracy over explainability; however, there are significant differences between industrial sectors and application areas. Using a case study, we highlight a number of concerns on the unchecked use of AI in DSCS, such as bias or misinterpretation resulting in erroneous conclusions, which may lead to suboptimal decisions or relationship damage. Building on this, we develop and discuss a number of illustrative cases to highlight risks that practitioners should be aware of, proposing key areas of further research

Systemic Risk Assessment in Complex Supply Networks

The growth in size and complexity of supply chains has led to compounded risk exposure, which is hard to measure with existing risk management approaches. In this study, we apply the concept of systemic risk to show that centrality metrics can be used for complex supply network risk assessment. We review and select metrics, and set up an exemplary case applied to the material flow and contractual networks of Honda Acura. In the exemplary case study, geographical risk information is incorporated to selected systemic risk assessment metrics and results are compared to assessment without risk indicators in order to draw conclusions on how additional information can enhance systemic risk assessment in supply networks. Katz centrality is used to measure the node’s risk spread using the World Risk Index. Authority and hub centralities are applied to measure the link risk spread using distances between geographical locations. Closeness is used to measure speed of disruption spread. Betweenness centrality is used to identify high-risk middlemen. Our results indicate that these metrics are successful in identifying vulnerabilities in network structure even in simplified cases, which risk practitioners can use to extend with historical data to gain more accurate insights into systemic risk exposure