COVID-19 and Beyond: Implications on Supply Chain Network Design
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The unprecedented nature of the COVID-19 pandemic—the global scope, long-lasting impacts, and the simultaneous supply and demand disruptions—calls for a rethink of supply chain network design beyond what was studied in the literature. This study provides managerial insights on the design and operations of supply chain networks for the new normal. Building on the latest theoretical development in supply chain disruption and using an extensive simulation study based on the data of confirmed COVID-19 cases and lockdown measures, we analyze the dynamics of alternative supply chain network strategies under various pandemicinduced disruption scenarios. Our study highlights the principle of robustness, that a supply chain network should be designed to withstand alternative disruption scenarios that could emerge, which can be achieved through strategic design elements. We find that flexibility offers strategic redundancies to effectively combat the sources of uncertainty that trigger the forward and reverse bullwhip effects. In addition, we find that flexibility complemented with the strategies of preparedness and agility can be especially valuable in robust network. In particular, preparedness (securing emergency backup suppliers) is most effective when flexibility is deployed downstream; whereas, agility (proactive stocking policies in response to imminent disruptions) can be most helpful when flexibility is deployed upstream.
Abstract
The unprecedented nature of the COVID-19 pandemic—the global scope, long-lasting impacts, and the simultaneous supply and demand disruptions—calls for a rethink of supply chain network design beyond what was studied in the literature. This study provides managerial insights on the design and operations of supply chain networks for the new normal. Building on the latest theoretical development in supply chain disruption and using an extensive simulation study based on the data of confirmed COVID-19 cases and lockdown measures, we analyze the dynamics of alternative supply chain network strategies under various pandemicinduced disruption scenarios. Our study highlights the principle of robustness, that a supply chain network should be designed to withstand alternative disruption scenarios that could emerge, which can be achieved through strategic design elements. We find that flexibility offers strategic redundancies to effectively combat the sources of uncertainty that trigger the forward and reverse bullwhip effects. In addition, we find that flexibility complemented with the strategies of preparedness and agility can be especially valuable in robust network. In particular, preparedness (securing emergency backup suppliers) is most effective when flexibility is deployed downstream; whereas, agility (proactive stocking policies in response to imminent disruptions) can be most helpful when flexibility is deployed upstream.
참고문헌 (30)
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