A Conceptual Framework for Robust Supply Chain Design Under Demand Uncertainty

Abstract

IntroductionThe concept of robust design was first introduced by Genuchi Taguchi in the 1960s, and was subsequently accepted in the field of experimental design and quality control. The basic idea of robust design is to make a manufacturing process insensitive to noise factors. Taguchi divided variables into two categories: design factors and noise factors. Design factors are controllable decisions afi"ecting a process. Noise factors are those variables representing field sources of variation. The goal is to design a product or process to be robust to noise. One way to determine a robust design is to find a set of design variables that provides the minimum deviation from a target value of the response when noise variables are considered at different levels.We propose that a similar idea can be applied to the design of supply chains, namely robust supply chain design. Supply chain design models determine strategic decisions, such as the most cost-effective location of facilities (including plants and distribution centers), flow of goods, services, information and funds throughout the supply chain, and assignment of customers to distribution centers. We next briefly and selectively review deterministic analytical models and stochastic analytical models for strategic supply chain design.

Agribusiness supply chain risk management: A review of quantitative decision models

“…Robust strategies in the supply chain are considered as proactive and upfront RM options that mitigate risks and provide minimum variation in performance under disruption (e.g., [97,98,99,14,100,101,102]) that could be provided through approaches such as stochastic programming (e.g., [103,104]) and robust optimization (e.g., [105,106,60]). In comparison, resilience is referred to as a post-disruption recovering capacity [107,21,108,109], and stems from characteristics including flexibility, availability, velocity, and visibility [110].…”

Facility Location Under Uncertainty

“…16 for further details). We can refer, among others, to Aghezzaf (2005), Listeş and Dekker (2005), Mo and Harrison (2005), Romauch and Hartl (2005), Pan and Nagi (2010), Fonseca et al (2010), andNickel et al (2012).…”

A Reengineering Methodology for Supply Chain Networks Operating Under Disruptions

“…To achieve sustainable value creation, the SCN designed must also be robust. Several authors have discussed robustness in a SC context [8,13,28,32,37,43]. They characterize robustness as the extent to which the SCN is able to carry its functions for a variety of plausible future scenarios.…”