Supply chain risk modelling and mitigation

In today’s global competitive environment, supply chains are more susceptible to vulnerability due to the increasing occurrence of internal and external risk events. In addition, the trend associated with lean management, which involves reducing inventory, leads to more dependency of supply chain partners on each other which exacerbates risk exposure of companies in the supply chain. This creates the need for more effective management of supply chain risks. In this research, a methodology based on Bow-Tie analysis and optimisation techniques is proposed to quantify and mitigate supply chain risks. The proposed methodology takes into consideration risk interconnections, and it identifies the best combination of mitigation strategies under budget constraints. A real case study from a high-end server manufacturing environment is presented. Results from the case study showed that the proposed methodology for risk modelling and mitigation can effectively be used to quantify the risks and achieve the required risk reduction at minimum cost while considering risk correlations.

[1]  Sarah S. Lam,et al.  A fuzzy-based integrated framework for supply chain risk assessment , 2015 .

[2]  Faisal Aqlan,et al.  Integrating lean principles and fuzzy bow-tie analysis for risk assessment in chemical industry , 2014 .

[3]  Sarah S. Lam,et al.  An integrated simulation–optimization study for consolidating production lines in a configure-to-order production environment , 2014 .

[4]  Jie Chen,et al.  Supply chain operational risk mitigation: a collaborative approach , 2013 .

[5]  Ali H. Diabat,et al.  Supply chain risk management and its mitigation in a food industry , 2012 .

[6]  Virgilio Cruz-Machado,et al.  Supply chain redesign for resilience using simulation , 2012, Comput. Ind. Eng..

[7]  Jose M. Cruz,et al.  Supply chain disruption risk management through strategic information acquisition and sharing and risk-sharing contracts , 2011 .

[8]  Dinesh Kumar,et al.  System dynamic methodological approach for design and analysis of risk in supply chain , 2011, First International Technology Management Conference.

[9]  Jörn-Henrik Thun,et al.  An empirical analysis of supply chain risk management in the German automotive industry , 2011 .

[10]  M. Giannakis,et al.  A multi-agent based framework for supply chain risk management , 2011 .

[11]  Y. K. Tse,et al.  Managing product quality risk in a multi-tier global supply chain , 2011 .

[12]  Gonca Tuncel,et al.  Risk assessment and management for supply chain networks: A case study , 2010, Comput. Ind..

[13]  Mahender Singh,et al.  Quantifying supply chain disruption risk using Monte Carlo and discrete-event simulation , 2009, Proceedings of the 2009 Winter Simulation Conference (WSC).

[14]  Jennifer Blackhurst,et al.  Managing supply chain risk and vulnerability: Tools and methods for supply chain decision makers , 2009 .

[15]  Soundar Kumara,et al.  Comparison of mitigation strategies for supplier risks: A multi agent-based simulation approach , 2009, 2009 IEEE/INFORMS International Conference on Service Operations, Logistics and Informatics.

[16]  Ashutosh Sarkar,et al.  Determining the optimal size of supply base with the consideration of risks of supply disruptions , 2009 .

[17]  V. Tummala,et al.  Assessing supply chain risks with the analytic hierarchy process: Providing decision support for the offshoring decision by a US manufacturing company , 2008 .

[18]  Vicky Manthou,et al.  Identifying and evaluating unexpected events as sources of supply chain risk , 2008 .

[19]  D. Waters.  Supply Chain Risk Management: Vulnerability and Resilience in Logistics , 2007 .

[20]  Antonio Espuña Camarasa,et al.  An agent-based approach for supply chain retrofitting under uncertainty , 2007, Comput. Chem. Eng..

[21]  Kevin B. Hendricks,et al.  Association Between Supply Chain Glitches and Operating Performance , 2005, Manag. Sci..

[22]  Germaine H. Saad,et al.  Managing Disruption Risks in Supply Chains , 2005 .

[23]  S. Chopra,et al.  Managing Risk To Avoid Supply-Chain Breakdown , 2004 .

[24]  L. Whitman,et al.  Methodology to mitigate supplier risk in an aerospace supply chain , 2004 .

[25]  George A. Zsidisin,et al.  Risk Management System – A Conceptual Model , 2009 .

[26]  G. Zsidisin,et al.  Supply chain risk : a handbook of assessment, management, and performance , 2008 .

[27]  Mark Goh,et al.  Production , Manufacturing and Logistics A stochastic model for risk management in global supply chain networks , 2007 .

[28]  Vinay Deshmukh,et al.  The design of a decision support system for supply chain risk management , 2006 .