Simulation-based assessment of supply chain resilience with consideration of recovery strategies in the COVID-19 pandemic context

Abstract

In the wake of the COVID-19 pandemic, many firms lacked a strategy to cope with disruptions and maintain resiliency. In this study, we develop a measurement method to evaluate the impact of resilience strategies in a multi-stage supply chain (SC) in the presence of a pandemic. For the first time, we propose a method to deduce quantitative resilience assessment from simulation. We implement two resilience strategies, i.e., prepositioning extra-inventory and a backup supplier, and then we simulate its impact on SC resilience and financial performance. The simulation results indicate that the extra inventory leads to a higher resilience than a backup supplier but costs more for the given contextual setting. Finally, we examine the demand fulfillment and observe that the extra-inventory strategy allows for a higher service level, confirming our resilience simulations. We discuss the managerial implications of these findings on the descriptive and predictive analysis levels. Decision-makers can utilize our model and findings to develop a response plan in the occurrence of a pandemic or any long-duration high magnitude disruption. Also, scholars and managers can use our proposed method to measure SC resiliency from simulation in any disruption.

Resilient manufacturing: case studies in Thai automotive industries during the COVID-19 pandemic

“…These strategies of the case studies in Thailand can be confirmed by Belhadi et al (2021), stating that localisation of supply sources is the best strategy to mitigate risks related to supply chain resilience during the coronavirus epidemic in the automotive industry. Moosavi and Hosseini (2021) found that extra inventory resulted in a higher resilience than a backup supplier. However, the companies require to absorb the greater cost.…”

“…However, the COVID-19 pandemic differs from natural disasters or human-made interruptions (Guan et al, 2020). The duration and magnitude of the coronavirus outbreak (the scope of the disruption's impact on related enterprises) are catastrophic compared to other experienced disruptions (Moosavi & Hosseini, 2021). The knowledge and BCP transferred from partners were the fundamental measures in overcoming the risk related to the pandemic.…”

“…The impact of the COVID-19 pandemic is considerably different from other supply chain disruptions (i.e., earthquakes, floods, civil unrests, and terrorist attacks) in two terms: (1) magnitude -the scale and duration of the impact caused by the disruption on related enterprises; and (2) duration -the time that the impact caused by the disruption on the supply chain lasted (Guan et al, 2020;Moosavi & Hosseini, 2021). Based on Nakamura and Managi (2020), an organisation should understand the short and long-term implications and reasonable risk assessments on a new phenomenon, such as the coronavirus epidemic.…”

Resilience and complexity measurement for energy efficient global supply chains in disruptive events

“…( Ivanov and Dolgui, 2020 ) stated that complex networks in the SC have become more fragile due to severe disruptions such as pandemics that alter the structures and dynamics of the SC. Further, the simulation techniques such as system dynamics modelling allow developing a variety of resilience measure plans, considering severe interruptions ( Moosavi & Hosseini, 2021 ). Therefore, to help businesses, these approaches are integrated with complexity theories to investigate the impact of COVID-19 on the resilience of countries.…”

Integrating Resilience and Sustainability Criteria in the Supply Chain Network Design. A Systematic Literature Review

“…The design of resilient chains for MSEs must consider these complexities because these companies have important contributions in regional development due to their local character and history [14]. This fact has been magnified due to the pandemic of COVID-19 that has generated a great impact in supply chains both in magnitude (scale of the impact) and duration (length of the impact) [15]. Thus, the resilience of supply chains has become important considering the local disturbances that can spread upstream and downstream affecting the entire chain.…”