Fragility of a multilayer network of intranational supply chains

Abstract

Supply chains enable the flow of goods and services within economic systems. When mapped for the entire economy and geographic locations of a country, supply chains form a spatial web of interactions among suppliers and buyers. One way to characterize supply chains is through multiregional input-output linkages. Using a multiregional input-output dataset, we build the multilayer network of supply chains in the United States. Together with a network cascade model, the multilayer network is used to explore the propagation of economic shocks along intranational supply chains. We find that the effect of economic shocks, measured using the avalanche size or total number of collapsed nodes, varies widely depending on the geographic location and economic sector of origin of a shock. The response of the supply chains to shocks reveals a threshold-like behavior. Below a certain failure or fragility level, the avalanche size increases relatively quickly for any node in the network. Based on this result, we find that the most fragile regions tend to be located in the central United States, which are regions that tend to specialize in food production and manufacturing. The most fragile layers are chemical and pharmaceutical products, services and food-related products, which are all sectors that have been disrupted by the Coronavirus Disease 2019 (COVID-19) pandemic in the United States. The fragility risk, measured by the intersection of the fragility level of a node and its exposure to shocks, varies across regions and sectors. This suggests that interventions aiming to make the supply-chain network more robust to shocks are likely needed at multiple levels of network aggregation.

The Vaccine Supply Chain: A Call for Resilience Analytics to Support COVID-19 Vaccine Production and Distribution

“…Consequently, the magnitude of a disruption's impact on the domestic supply chain network is traditionally related to the location of origin within the country, as seen in the Coronavirus pandemic (Gomez et al 2020). Gomez et.al use threshold analysis to find that a disruption in the central U.S. to a supply chain node leads to a larger supply chain failure propagated throughout the country, particularly in the agriculture and food sectors (2020).…”

Reimagining health preparedness in the aftermath of COVID-19

“…COVID-19 has exposed the fragility of interdependent international supply chains, especially for medical equipment and personal protective equipment (PPE). 20 Like bullets and body armour for combat troops, supplies of PPE should be seen as a national strategic asset. In the opening months of COVID-19, high-income countries (including the USA, UK, and Australia) struggled to acquire adequate supply of N95 mask respirators to meet perceived demand.…”

Shock propagation channels behind the global economic contagion network. The role of economic sectors and the direction of trade

“…More recent studies, though, made use of sector-level data which allows for a more detailed approach to the analysis of international trade as a complex network as well as to revealing the patterns of shock contagion. These studies contribute to understanding the position of sectors and countries within different production stages [ 29 ], the identification of central sectors and sector-level communities [ 30 ], the measurement of the nestedness of sectors and countries’ within global value chains [ 31 ] and the evaluation of sectors’ fragility and their role in shock contagion processes [ 17 , 32 , 33 ]. These studies show a meaningful heterogeneity in the role that different sectors play in international trade, which supports the use of sector-level data in mapping the structure of international trade and shock contagion in a more accurate way.…”