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In today's 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's Business Risk Report from 2014, half of all supply chain disruptions stemming from tier-2 and tier-3 suppliers. However, the industry's 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' 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.
Real-world supply chains and networks are inherently complex, formed by a large number of self-governing interconnected agents which dynamically update their behavior rules and connections based on context and environment changes. Oftentimes, these complex systems fail, almost inexplicably, due to unforeseen events leading to disruption. Exploration and research of the mechanisms behind the failure of supply chains and networks have revealed that those capable of surviving are not only robust, but resilient. The purpose of this book is to explain the meaning of resilience and its design in the broad context, and with a focus on the design and management of supply chains and supply networks. Written by Dr. Reyes Levalle, an experienced supply chains designer and supply networks engineer, the book is intended for beginners and advanced professionals, students, designers, policy makers, and managers. It is a pioneering effort to base resilience engineering and management on CCT, the collaborative control theory and tools.
In today's rapidly changing business environment, strong influence of globalization and information technologies drives practitioners and researchers of modern supply chain management, who are interested in applying different contemporary management paradigms and approaches, to supply chain process. This book intends to provide a guide to researchers, graduate students and practitioners by incorporating every aspect of management paradigms into overall supply chain functions such as procurement, warehousing, manufacturing, transportation and disposal. More specifically, this book aims to present recent approaches and ideas including experiences and applications in the field of supply chains, which may give a reference point and useful information for new research and to those allied, affiliated with and peripheral to the field of supply chains and its management.
Every global crisis highlights the strategic importance of industrial and non-profit supply chains for society. In terms of coping with unforeseen and unpredictable events, supply chain resilience enables the parties and networks involved to stay successful during and after the disruption. Furthermore, a resilient supply chain contributes to the sustainable competitive advantage of the entire value chain. Written by scholars and practitioners alike, this book not only puts forward a new framework for resilience in supply chain management, but also presents best practice cases from various areas and industries. As a particular highlight, it includes a Delphi study that gathers state-of-the-art insights from supply chain leaders. In addition to practical approaches, methods and tools, the book also offers food for thought on the future of supply chain resilience. As such, it offers a valuable resource for current and future managers in the public and private sector, as well as researchers and students engaged in this field.
This book offers an introduction to structural dynamics, ripple effect and resilience in supply chain disruption risk management for larger audiences. In the management section, without relying heavily on mathematical derivations, the book offers state-of-the-art concepts and methods to tackle supply chain disruption risks and designing resilient supply chains in a simple, predictable format to make it easy to understand for students and professionals with both management and engineering background. In the technical section, the book constitutes structural dynamics control methods for supply chain management. Real-life problems are modelled and solved with the help of mathematical programming, discrete-event simulation, optimal control theory, and fuzzy logic. The book derives practical recommendations for management decision-making with disruption risk in the following areas: How to estimate the impact of possible disruptions on performance in the pro-active stage? How to generate efficient and effective stabilization and recovery policies? When does one failure trigger an adjacent set of failures? Which supply chain structures are particular sensitive to ripple effect? How to measure the disruption risks in the supply chain?
This book offers an introduction to the ripple effect in the supply chain for a broad audience comprising recent developments. The chapters of this handbook are written by leading experts in supply chain risk management and resilience. For the first time, the chapters present in their synergy a multiple-faceted view of the ripple effect in supply chains, while considering organization, optimization, and informatics perspectives. Ripple effect describes the impact of a disruption propagation on supply chain performance, structural designs and operational parameters. The ripple effect manifests when the impact of a disruption cannot be localized and cascades along the supply chain. The resulting structural dynamics can lead to capacity and demand fulfilment downscaling and negatively influence the firm’s financial and operational performance. The book delineates major features of the ripple effect and methodologies to mitigate the adverse impact of supply chain disruption propagation and to recover in case of severe disruptions. The book provides fresh insights for supply chain management and engineering regarding the following questions: - In what circumstance does one failure cause other failures? - Which structures of the supply chain are especially susceptible to the ripple effect? - What are the typical ripple effect scenarios and what are the most efficient ways to respond them? Distinctive Features: • It considers ripple effect in the supply chain from an multi-disciplinary perspective• It offers an introduction to ripple effect mitigation and recovery policies in the framework of disruption risk management in supply chains for a broad audience• It integrates management and engineering perspectives on disruption risk management in the supply chain• It presents innovative optimization and simulation models for real-life management problems• It considers examples from both industrial and service supply chains• It reveals decision-making recommendations for tackling disruption risks in the supply chain in proactive and reactive domains.
Resilient supply chains are crucial to maintaining the consistent delivery of goods and services to the American people. The modern economy has made supply chains more interconnected than ever, while also expanding both their range and fragility. In the third quarter of 2017, Hurricanes Harvey, Irma and Maria revealed some significant vulnerabilities in the national and regional supply chains of Texas, Florida, the U.S. Virgin Islands, and Puerto Rico. The broad impacts and quick succession of these three hurricanes also shed light on the effectiveness of the nation's disaster logistics efforts during response through recovery. Drawing on lessons learned during the 2017 hurricanes, this report explores future strategies to improve supply chain management in disaster situations. This report makes recommendations to strengthen the roles of continuity planning, partnerships between civic leaders with small businesses, and infrastructure investment to ensure that essential supply chains will remain operational in the next major disaster. Focusing on the supply chains food, fuel, water, pharmaceutical, and medical supplies, the recommendations of this report will assist the Federal Emergency Management Agency as well as state and local officials, private sector decision makers, civic leaders, and others who can help ensure that supply chains remain robust and resilient in the face of natural disasters.
Stories from Nokia, Dell, UPS, Toyota, and other companies show how firms can reduce their vulnerability to high-impact distributions, from earthquakes to strikes, from SARS to terrorism, and use them for competitive advantage. What happens when fire strikes the manufacturing plant of the sole supplier for the brake pressure valve used in every Toyota? When a hurricane shuts down production at a Unilever plant? When Dell and Apple chip manufacturers in Taiwan take weeks to recover from an earthquake? When the U.S. Pacific ports are shut down during the Christmas rush? When terrorists strike? In The Resilient Enterprise, Yossi Sheffi shows that companies' fortunes in the face of such business shocks depend more on choices made before the disruption than they do on actions taken in the midst of it—and that resilience benefits firms every day, disaster or no disaster. He shows how companies can build in flexibility throughout their supply chains, based on proven design principles and the right culture—balancing security, redundancy, and short-term profits. And he shows how investments in resilience and flexibility not only reduce risk but create a competitive advantage in the increasingly volatile marketplace.Sheffi describes the way companies can increase security—reducing the likelihood of a disruption—with layered defenses, the tracking and analysis of “near-misses,” fast detection, and close collaboration with government agencies, trading partners, and even competitors. But the focus of the book is on resilience—the ability to bounce back from disruptions and disasters—by building in redundancy and flexibility. For example, standardization, modular design, and collaborative relationships with suppliers (and other stakeholders) can help create a robust supply chain. And a corporate culture of flexibility—with distributed decision making and communications at all levels—can create a resilient enterprise.Sheffi provides tools for companies to reduce the vulnerability of the supply chain they live in. And along the way he tells the stories of dozens of enterprises, large and small, including Toyota, Nokia, General Motors, Zara, Land Rover, Chiquita, Aisin Seiki, Southwest Airlines, UPS, Johnson and Johnson, Intel, Amazon.com, the U.S. Navy, and others, from across the globe. Their successes, failures, preparations, and methods provide a rich set of lessons in preparing for and managing disruptions. Additional material available at www.TheResilientEnterprise.com.
This book investigates individual companies’ and industries’ supply chain risk management approaches to identify risk drivers and verify effective risk-reduction measures and business continuity plans. Typically, supply chain risk assessments focus on normative guidelines based on single best practice examples or vulnerability events, and there has been little work exploring how the concepts of supply chain risk management and resilience are related. However, since this relationship has implications for developing integrated response strategies, a clear understanding of the possible consequences is a fundamental step in building socio-economic resilience along the supply chain. Against this background, the book addresses three main topics: firstly, it defines the conceptual and sectoral domains of supply chain risk management and resilience by examining the welfare effects of extreme weather events and other economic shocks on selected global supply chains. It then presents an in-depth analysis of the scope of public–private partnerships to tackle the risks, by empirically exploring supply chain risk effects and information management. Thirdly, it proposes a regional cooperation framework in the context of major supply chain vulnerability events such as disasters and global financial crises.
This book provides a first-of-its-kind approach for using blockchain to enhance resilience in disaster supply chain and logistics management, especially when dealing with dynamic communication, relief operations, prioritization, coordination, and distribution of scarce resources — these are elements of volatility, uncertainty, complexity, and ambiguity (VUCA) describing a dynamic environment that now form the "new norm" for many leaders. Blockchain-Enabled Resilience: An Integrated Approach for Disaster Supply Chain and Logistics Management analyzes the application of blockchain technology used to enable resilience in a disaster supply chain network. It discusses IoT and DVFS algorithms for developing a network-based simulation and presents advancements in disaster supply chain strategies using smart contacts for collaborations. The book covers how success is based on collaboration, coordination, sovereignty, and equality in distributing resources and offers a theoretical analysis that reveals that enhancing resilience can improve collaboration and communication and can result in more time-efficient processing for disaster supply management. The book offers a first-of-its-kind approach for managers and policy-makers as well as researchers interested in using blockchain to enhance resilience in disaster supply chains, especially when dealing with dynamic communication, relief operations, prioritization, coordination, and distribution of scarce resources. Practical guidance is provided for managers interested in implementation. A robust research agenda is also provided for those interested in expanding present research.