Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case

Ivanov, Dmitry

doi:10.1016/j.tre.2020.101922

Cited by 1,653 publications

(1,507 citation statements)

References 77 publications

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“…Duration refers to the number of months the containment measures last. Strictness is measured by the percentage of loss in labour availability and transportation capacity 13 compared to pre-disaster levels. Given that the impacts of containment measures to labour availability depends on the characteristics of production, we develop a specific impact-to-labour 'multipliers' set for every sector based on three factors, i.e., the exposure level to the virus, lifeline sectors (e.g.…”

Section: Resultsmentioning

confidence: 99%

Global economic footprint of the COVID-19 pandemic

Guan

Wang

Hallegatte

et al. 2020

Preprint

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Countries around the world have sought to stop the spread of the 2019 novel coronavirus (COVID-19) by severely restricting travel and in-person commercial activities. Here, we analyse the economic footprint of such “lockdowns” using detailed datasets of global supply chains and a set of pandemic scenarios. We find that COVID-related economic losses are largely dependent on the number of countries imposing lockdowns, and that losses are more sensitive to the duration of a lockdown that its strictness—suggesting that more severe restrictions can reduce economic damages if they successfully shorten the duration of a lockdown. Our results also highlight several key vulnerabilities in global supply chains: Even countries that are not directly affected by COVID-19 can experience large losses (e.g., >20% of their GDP)—with such cascading impacts often occurring in low- and middle-income countries. Open and highly-specialized economies suffer particularly large losses (e.g., energy-exporting Central Asian countries or tourism-focused Caribbean countries). Supply bottlenecks and declines in consumer demand lead to especially large losses in globalized sectors such as electronics (production decreases of 13-53% across our scenarios) and automobiles (2-49%). Although retrospective analyses will undoubtedly provide further policy-relevant insights, our findings already imply that earlier, stricter, and thus shorter lockdowns are likely to minimize overall economic damages, and that global supply chains will magnify economic losses in some countries and industry sectors regardless of direct effects of the coronavirus.

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Section: Resultsmentioning

confidence: 99%

Global economic footprint of the COVID-19 pandemic

Guan

Wang

Hallegatte

et al. 2020

Preprint

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“…Being lean and globalised in structures, the SCs of many companies became specifically prone to coronavirus outbreaks (Ivanov 2020). The COVID-19 outbreak has not only immensely affected all areas of economy and society but also put the resilience of SCs to the test.…”

Section: Introductionmentioning

confidence: 99%

“…Therefore, the ISN viability appears a timely and crucial topic which opens doors for a variety of new problem settings and solution techniques. The global pandemic and SC collapses moved the SC survivability issues through collective behavioural changes in the forefront of risk management discussions (Keogh 2020;Ivanov 2020). The SC survivability in the context of such extra-ordinary events goes beyond a narrow understanding of SC performance as some profits or revenues and brings the discussion to the next level, i.e.…”

Section: Introductionmentioning

confidence: 99%

Viability of intertwined supply networks: extending the supply chain resilience angles towards survivability. A position paper motivated by COVID-19 outbreak

Ivanov

Dolgui

2020

International Journal of Production Research

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An intertwined supply network (ISN) is an entirety of interconnected supply chains (SC) which, in their integrity secure the provision of society and markets with goods and services. The ISNs are open systems with structural dynamics since the firms may exhibit multiple behaviours by changing the buyer-supplier roles in interconnected or even competing SCs. From the positions of resilience, the ISNs as a whole provide services to society (e.g. food service, mobility service or communication service) which are required to ensure a long-term survival. The analysis of survivability at the level of ISN requires a consideration at a large scale as resilience of individual SCs. The recent example of coronavirus COVID-19 outbreak clearly shows the necessity of this new perspective. Our study introduces a new angle in SC resilience research when a resistance to extraordinary disruptions needs to be considered at the scale of viability. We elaborate on the integrity of the ISN and viability. The contribution of our position study lies in a conceptualisation of a novel decision-making environment of ISN viability. We illustrate the viability formation through a dynamic game-theoretic modelling of a biological system that resembles the ISN. We discuss some future research areas.

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“…More appropriately, the Rippled Newsvendor can be viewed as the precursor to various ripple effects, and how the presence of various risks eventually lead to the disruption propagation itself. Hence, our research also illustrates the need to theoretically distinguish between disruption propagations such as the ripple effect, and risk propagations, such as the recent COVID-19 outbreak (Ivanov, 2020), which could eventually lead to a ripple effect.…”

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confidence: 81%

The rippled newsvendor: A new inventory framework for modeling supply chain risk severity in the presence of risk propagation

Garvey

Carnovale

2020

International Journal of Production Economics

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How should managers take into account the propagation of supply chain disruptions and risks (i.e. the ripple effect) when they design their inventory policies? For over 60 years, various extensions and applications to the popular newsvendor model have been suggested, where cost/profit are often the focal objective. Accordingly, we propose a new version of the traditional single-period newsvendor model -the "Rippled Newsvendor" -with supply chain severity (i.e. risk propagation) as the primary objective while taking into account network structure. Our model considers exogenous and endogenous risk(s) of disruption while exploring the tension between under-supply and "wear-and-tear" (i.e system breakdown).To model the intricacies of this trade-off whilst minimizing the potential spread of risk, we leverage a Bayesian Network whereby the conditional probability distributions are functions of the inventory ordering decisions. We use a simulation study to understand the nature of our objective function as well as to gain insight into the potential optimal ordering policies of this new model. Furthermore, the simulation seeks to understand how the various factors in our system impact total risk severity, and if they do so in different ways. Our simulations indicate that local exogenous risk is of greater importance than non-local exogenous risk.Furthermore, we show that the type of risk, as well as the structural characteristics of the supply chain and inventory system, impact risk severity differently. As far as we are aware, this is the first framework to incorporate supply network structure, risk propagation, and inventory decision making.

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Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case

Cited by 1,653 publications

References 77 publications

Global economic footprint of the COVID-19 pandemic

Global economic footprint of the COVID-19 pandemic

Viability of intertwined supply networks: extending the supply chain resilience angles towards survivability. A position paper motivated by COVID-19 outbreak

The rippled newsvendor: A new inventory framework for modeling supply chain risk severity in the presence of risk propagation

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