Planning for Disruptions in Supply Chain Networks

Abstract

Recent events have highlighted the need for planners to consider the risk of disruptions when designing supply chain networks. Supply chain disruptions have a number of causes and may take a number of forms. Once a disruption occurs, there is very little recourse regarding supply chain infrastructure because these strategic decisions cannot be changed quickly. Therefore, it is critical to account for disruptions during the design of supply chain networks so that they perform well even after a disruption. Indeed, these systems can often be made substantially more reliable with only small additional investments in infrastructure. Planners have a range of options available to them in designing resilient supply chain networks, and their choice of approaches will depend on the financial resources available, the decision maker's risk preference, the type of network under consideration, and other factors. In this tutorial, we present a broad range of models for designing supply chains resilient to disruptions. We first categorize these models by the status of the existing network: A network may be designed from scratch, or an existing network may be modified to prevent disruptions at some facilities. We next divide each category based on the underlying optimization model (facility location or network design) and the risk measure (expected cost or worst-case cost).

What you should know about location modeling

“…The objective is to find the Q facilities to defend to minimize the worst-case attack. Snyder et al [57] and Snyder and Daskin [55] review these streams of research.…”

Integrated Forward-reverse Logistics Network Design under Uncertainty and Reliability Consideration

“…In addition, the same disruption probability is considered for all distribution centers. Several reliability models, similar to that presented by Snyder and Daskin [25], have been developed in the literature, but the uniformdisruption-probability assumption is relaxed using a variety of modeling approaches [8,[26][27][28][29][30][31].…”

Enhancing network robustness via shielding

“…In [13], the authors formulate a road network retrofit problem, and use a two stage stochastic programming approach to decide which roads to retrofit to minimize the average performance loss incurred by a disaster. Fortifying facilities to minimize the transportation cost and path length is also considered in [14], [16], [17]. However, no previous research is devoted to identifying the minimum cost shielding to guarantee network connectivity.…”