Budget allocation in coping with supply chain disruption risks

Disruption management, as an important research topic, has attracted scholars’ broad attention in recent years due to the increasing exposure of disruption risks in supply chains. To date, researches in this field often focus on either prevention or mitigation measures and the budget allocation problem is paid relatively little attention. This paper therefore proposes an approach to determine the optimal budget allocation based on prevention measures in combination with mitigation measures. First, considering different disruption situations, the bow-tie is applied to developing the disruption management frameworks that integrate risk prevention and risk mitigation. Second, the corresponding optimization models are formulated to determine the optimal budget allocation plans. In order to validate the proposed approach, we compare the computation results with those obtained from the prevention approach and the mitigation approach. Also, random experiments are conducted to analyse the impacts of randomly generated disruption and response scenarios. Finally, a real-life case is provided to testify the usefulness and merits of our proposed approach. The results show that the proposed approach can help decision-makers reduce more loss caused by the disruption risks.     

On the robust decision-making in a supply chain under disruption risks

This paper considers a robust decision-making problem associated with supplies of parts and deliveries of finished products in a customer driven supply chain under disruption risks. The robustness refers to an equitably efficient performance of a supply chain in average-case as well as in the worst-case, which reflects the decision-makers common requirement to maintain an equally good performance of a supply chain under different conditions. Given a set of customer orders for products, the decision-maker needs to select suppliers of parts required to complete the orders, allocate the demand for parts among the selected suppliers and schedule the orders over the planning horizon, to equitably optimise average and worst-case performance of the supply chain. The supplies are subject to independent random local and regional disruptions. The obtained combinatorial stochastic optimisation problem is formulated as a mixed-integer program with conditional value-at-risk as a risk measure. The ordered weighted averaging aggregation of the expected value and the conditional value-at-risk of the selected optimality criterion is applied to obtain a robust solution. The risk-neutral, risk-averse and robust solutions that optimise, respectively average, worst-case and equitable average and worst-case performance of a supply chain are determined and compared for cost and customer service level objective functions. Numerical examples and computational results, in particular comparison with the mean-risk approach, are presented and some managerial insights are reported.     

Managing demand uncertainty through fuzzy inference in supply chain planning

In this paper, we investigate methods for managing the irregular and uncertain demands involved in supply chain planning. We first build a supply chain planning model based on fuzzy linear programming, which defines demand as a fuzzy parameter. Next, we propose a fuzzy inference approach for converting fuzzy demand into crisp demand. In the proposed fuzzy inference-based approach, judgments of upcoming demand from both internal and external experts are used as input variables to reflect the expected demand irregularity. By adopting fuzzy inference, we can compensate for the limitations of the existing demand treatment approaches, which usually demonstrate poor forecasting performance in cases of irregular demand and thus reduce the accuracy of supply chain planning. To verify the feasibility of the proposed approach, we present an illustrative example of a Korean electronics company.     

Mitigating global supply chain risks through corporate social responsibility

This paper presents a decision model that captures supply-side disruption risks, social risks, and demand-side uncertainty within an integrated global supply chain and corporate social responsibility (CSR) modelling and analysis framework. The global supply chain decision-makers must decide on the level of investment in CSR activities and the choice of trading partners (manufacturer or retailer) given their CSR consciousness and perceived riskiness in order to maximise profit and minimise their overall risk. The model incorporates individual attitudes towards disruption risks among the manufacturers and the retailers, with the demands for the product associated with the retailers being random. The model allows one to investigate the effects of heterogeneous CSR activities in a global supply chain and to compute the resultant equilibrium pattern of product outputs, transactions, product prices, and levels of social responsibility activities. The results show that CSR activities can potentially be used to mitigate global supply chain risk.     

Estimating vulnerability to risks: an application in a biofuel supply chain

In the present work, we propose a theoretical model to identify and prioritize risks involved in a biofuel supply chain. We adopt a set of indicators associated with determinant factors of the supply chain to identify risks that are characterized through a risk matrix. We consider the five largest world biodiesel producers and included China due to its global market importance and potential impacts of its growth on the environment and society. To determine the impacts and the probability of occurrence of risks, we use the Canberra distance, as metrics. To facilitate the analysis and interpretation, a convenient manner is to express the results in terms of matrices. To exemplify the potentiality of the scheme and for the sake of simplicity, a more comprehensive discussion is focused on the Brazilian case, restricted to the Technology and Innovation, and Integration, Logistics and Infrastructure determining factors (dimensions) of the biodiesel supply chain. Concerning these determining factors, the Brazilian biodiesel chain shows strong vulnerability when compared with developed and developing countries, despite that the evolution of the data over recent years indicates small improvements in Integration, Logistics and Infrastructure dimension. Although in this work the calculations are restricted to the Canberra distance, the present approach may be applied to other distances to compare or validate the results. This work presents a contribution to model vulnerability to risks, providing to policy makers and stakeholders a tool to design, analyze and improve sustainability system by measuring its risks. The study of the contribution of each indicator suggests corrections to be taken and which indicators should be prioritized.     

Managing product availability in an assemble-to-order supply chain with multiple customer segments

In this article, we propose a novel availability management process called Available-to-Sell (ATS) that incorporates demand shaping and profitable demand response to drive better supply chain efficiency. The proposed process aims at finding marketable product alternatives in a quest to maintain a financially viable and profitable product portfolio, and to avoid costly inventory overages and shortages. The process is directly supported by a mathematical optimization model that enables on demand up-selling, alternative-selling and down-selling to better integrate the supply chain horizontally, connecting the interaction of customers, business partners and sales teams to procurement and manufacturing capabilities of a firm. We outline the business requirements for incorporating such a process into supply chain operations, and highlight the advantages of ATS through simulations with realistic production data in a computer manufacturing environment. The models featured in this paper have contributed to substantial business improvements in industry-size supply chains, including over $100M of inventory reduction in IBM’s server computer supply chain.     

On the risk-averse optimization of service level in a supply chain under disruption risks

The worst-case optimization of service level in the presence of supply chain disruption risks is considered for the two different service levels measures: the expected worst-case demand fulfillment rate and the expected worst-case order fulfillment rate. The optimization problem is formulated as a joint selection of suppliers and stochastic scheduling of customer orders under random disruptions of supplies. The suppliers are located in different geographic regions and the supplies are subject to random local and regional disruptions. The obtained combinatorial stochastic optimization problem is formulated as a mixed integer program with conditional service-at-risk as a worst-case service level measure. The risk-averse solutions that optimize the worst-case performance of a supply chain are compared for the two service level measures. In addition, to demonstrate the impact on the cost in the process of optimizing the worst-case service level, a joint optimization of expected cost and conditional service-at-risk using a weighted-sum approach is considered and illustrated with numerical examples. The findings indicate that the worst-case order fulfillment rate shows a higher service performance than the worst-case demand fulfillment rate. Maximization of the expected worst-case fraction of fulfilled customer orders better mitigates the impact of disruption risks. The supply portfolio is more diversified and the expected worst-case fraction of fulfilled orders is greater for most confidence levels. Finally, the results clearly show that worst-case service level is in opposition to cost.     

When risks need attention: adoption of green supply chain initiatives in the pharmaceutical industry

The pharmaceutical industry is very important in delivering life-saving products/services to society. There are many ways for materials/products/services concerned with pharmaceuticals to influence the environment; these include improper disposal of pills/tablets by patients, expired and unused medications, improper release of drugs by pharmacies or household sewage mixed with surplus drugs. In view of this, the present work seeks to integrate green supply chain (GSC) concepts in the pharmaceutical sector in a developing economy Indian context. In so doing, managers need to determine the potential risks in adopting GSC initiatives to achieve sustainability in operational perspectives. In this sense, this work seeks to distinguish the potential risks in adopting GSC initiatives within the pharmaceutical industry. This work uses a literature review and fuzzy Delphi approach in finalising the risks. This research also uses fuzzy Analytical Hierarchy Process (AHP) for prioritisation of the risks under vague and unclear surroundings. According to the findings, cold chain technology and supply risks categories are highly prioritised. This work can assist practising managers and government authorities in effectively developing and managing GSC initiatives in line with sustainable development goals in the context of the pharmaceutical industry. Finally, a sensitivity test is applied to evaluate the stability of ranking of risks.     

Resilient and sustainable supply chain design: sustainability analysis under disruption risks

Resilience to disruptions and sustainability are both of paramount importance to supply chains. However, the interactions between the two have not been thoroughly explored in the academic literature. We attempt to contribute to this area by presenting a hybrid methodology for the design of a sustainable supply network that performs resiliently in the face of random disruptions. A stochastic bi-objective optimisation model is developed that utilises a fuzzy c-means clustering method to quantify and assess the sustainability performance of the suppliers. The proposed model determines outsourcing decisions and resilience strategies that minimise the expected total cost and maximise 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.     

Disruption risks in supply chain management: a literature review based on bibliometric analysis

Disruption risks in supply chain management have a great negative influence on the performance of supply chain members. Therefore, the field of supply chain disruption (SCD) has received increasing attention on mitigating the risks and improving the supply chain performance. This paper presents a comprehensive bibliometric overview and visualisation of the field of SCD based on 1,310 publications derived from the core collection of the Web of Science. The influential authors, organisations, and SCD keywords are discussed in detail based on some visualisation tools. Then, the leading publications and main clusters of SCD are identified to find out the key research topics based on citation analysis and reference co-citation analysis. The paper will be a helpful resource for researchers and practitioners who are interested in the field of SCD to capture the current research hotspots and potential research directions.     

Quantifying risks in a supply chain through integration of fuzzy AHP and fuzzy TOPSIS

Risk is inherent in almost every activity of supply chain management. With the ever-increasing push for efficiency, supply chains today are getting more and more risky. Adding to the difficulty of dealing with these risks is the amount of subjectivity and uncertainty involved. This makes analytical examination of the situation very difficult, especially as the amount of information available at a particular time is not sufficient for such an analysis. Thus a supply chain risk index, which captures the level of risk faced by a supply chain in a given situation, is the need of the hour. This study is an effort towards quantifying the risks in a supply chain and then consolidating the values into a comprehensive risk index. An integrated approach, with a fuzzy analytical hierarchy process (AHP) and a fuzzy technique for order preference by similarity to the ideal solution (TOPSIS) as its important elements, has been used for this purpose. Fuzzy values in this study help in capturing the subjectivity of the situation with a final conversion to a crisp value which is much more comprehensible. A case study is used to illustrate the proposed methodology.     

Managing warehousing in an agile supply chain environment: an F-AIS algorithm based approach

In recent years, application of the agile concept in the manufacturing sector has been researched extensively to reduce the varying effect of customer demands. However, most of the research work is focused on the shop floor of different manufacturing processes, while issues concerning the control of warehouse scheduling in a supply chain have been neglected so far. Realising this in the present research an attempt has been made to address the scheduling aspect of a warehouse in an agile supply chain environment. To resolve the warehouse problem in this paper, the authors have proposed a new Fuzzy incorporated Artificial Immune System Algorithm (F-AIS). This algorithm encapsulates the salient features of a fuzzy logic controller and immune system. The proposed algorithm has been compared with genetic algorithm (GA), simulated annealing (SA) and artificial immune system (AIS) algorithm to reveal the efficacy of the proposed F-AIS algorithm.     

Counterfeit capacitors in the supply chain

Counterfeit electronic components have become a significant concern in the electronic parts supply chain. Original equipment manufacturers in particular are concerned about counterfeit components as there have been several recent reports of counterfeit parts entering the supply chain of the US military. This paper presents a case study of multilayer ceramic capacitors for use in a printed circuit assembly in an electronic system on a military aircraft. The capacitors failed during a high temperature screening test. Upon failure analysis it was revealed that the capacitors were not made to the correct specifications and were suspected to be counterfeit and not the authentic military grade capacitors manufactured by Kemet. Further investigation revealed that the suspect multilayered ceramic capacitors had entered into the electronics parts supply chain and were sold as authentic Kemet capacitors that met the higher military-specified requirements. The manufacturing and distribution of the counterfeit capacitors were traced to locations where, according to Kemet, its authentic capacitors are neither manufactured nor distributed.     

Robust design of a sustainable and resilient bioethanol supply chain under operational and disruption risks

Clean Technologies and Environmental Policy - In this work, we propose a mixed-integer linear programming model to address the design and planning of a multi-feedstock lignocellulosic bioethanol...     

Examining the interrelationships between supply chain integration scope and supply chain management efforts

In this article, we study the concept of supply chain integration scope by comparing firms that involve immediate supply chain partners in their strategic efforts (narrow supply chain scope) versus firms that involve supply chain partners beyond the immediate level, for example second tier suppliers and end customers (broad supply chain scope). By relying on Coordination Theory and expanding upon Frohlich and Westbrook's (2001 Frohlich, MT and Westbrook, R. 2001. Arcs of integration: an international study of supply chain strategies. Journal of Operations Management, 19(5): 185–200.  [Google Scholar]) ‘arcs of integration’ principle, we propose that supply chain integration scope and the type of supply chain management efforts deployed by firms are correlated. We use data from a large sample of US and European firms to explore the association between supply chain integration scope and supply chain management efforts. The results show that supply chain integration scope can be predicted by a firm's supply chain management efforts. The implications of our results for practising managers are also offered. Our results suggest that supply chain managers should consider the practices identified in this study while deciding on the appropriate level of supply chain integration scope, i.e., which extended supply chain members to include in their strategic planning efforts.     

Peer-regarding fairness in supply chain

People exhibit peer-regarding fairness concern when others who are in similar circumstances are treated unfairly. The fairness concern derives from a sense of sympathy or schadenfreude. We study it in a distribution channel where a supplier deals with two retailers located at independent markets. Sympathy means the decrease of the retailer’s utility because he believes that his peer’s unfair treatment is undeserved, while schadenfreude indicates the utility increase as the unfair treatment is perceived deserved. The two retailers are offered wholesale prices sequentially and set their retail prices if they accept the offers. In our paper, the second retailer has the peer-regarding fairness concern. We show the following in regards to this idea: (i) the retailers’ profits and the distribution channel performance can be improved by the peer-regarding fairness concern for sympathy; (ii) the retailers’ profits and the channel performance can be reduced by the peer-regarding fairness concern for schadenfreude; and (iii) the peer-regarding fairness concern for sympathy is unfavourable to the supplier, and the second retailer may be punished separately if the concern is not strong enough, while the supplier benefits from the peer-regarding fairness concern for schadenfreude and may exploit the second retailer solely if the schadenfreude parameter is large.     

Reconfigurable supply chain: the X-network

Research on supply chain (SC) digitalization, resilience, sustainability and leagility has remarkably progressed, most of it focused on the individual contributions of these four major frameworks. However, a lack of integration spanning these individual frameworks can be observed. In this conceptual paper, we hypothesize that reconfigurability can be considered such an integral perspective that consolidates the research in SC adaptation to ever changing environments. We theorize a new notion – a Reconfigurable SC or the X-network – that exhibits some crucial design and control characteristics for complex value-adding systems in highly vulnerable environments. We support our argumentation and conceptual viewpoints by a literature analysis along with tertiary studies to review and structure contextual factors of designing the X-networks. We propose respective frameworks and discuss the implementation principles and technologies at the macro and micro levels. Two novel concepts – dynamic SC meta-structures and dynamic autonomous services – are introduced. Distinctively, we go beyond the existing knowledge to predict proactively the future directions in the reconfigurable SCs. Our results can be of value for decision-makers to decipher chances and barriers in contemporary SC transformations.