Multi Objective Supply Chain Network Reconfiguration Under Disruptions

Abstract

Disruption in today's complex and global supply chain network (SCN) results in a negative impact on business performance. Companies try to manage disruptions by shifting the production/sourcing to undisrupted facilities, expanding the capacity at selected facilities, re-routing transportation and outsourcing the unmet demands. Models and methods to find a cost effective SCN reconfiguration to deal with disruption need attention. In this work, a SCN reconfiguration in a dynamic planning horizon under facility disruption is modelled mathematically with the objectives of minimizing the expected total cost and delivery time. The augmented ε-constraint method is proposed as a solution approach to obtain a set of Pareto optimal solutions. Numerical illustration with disruption scenarios is presented and our results show that facility with minimum distance to most customers serve majority of total customer demand. During disruption onset period, unmet demands are shifted to least utilised facility. During recovery periods, the facility with minimum distance to most customers is expanded to satisfy unmet demands. More capacity expansion occurred in minimum cost solution than in minimum time solution as more number of facilities are opened in latter than in former. The capacity utilization of facilities in minimum cost solutions are higher compared to that of minimum time solution.