Advertisement

Supply Chain Risk Mitigation and the Application Potential of Complex Systems Approaches

  • Zhengping LiEmail author
  • Rajpreet Kaur Gulati
Part of the Proceedings in Adaptation, Learning and Optimization book series (PALO, volume 1)

Abstract

Supply chains are becoming more complex and vulnerable. How to mitigate supply chain risks (SCRs) becomes a critical issue in supply chain management (SCM). This paper reviews the researches on SCR mitigation and identifies the current status and limitations. A new framework on SCR mitigation is proposed which intends to draw a clear roadmap for identifying, prioritizing and mapping SCRs to mitigation policies, evaluating and implementing related mitigation policies. Considering the complexities of SCR issues, the paper also elaborates the application potential of complex systems (CS) approaches for SCR mitigation.

Keywords

supply chain risk mitigation complex systems mitigation policy 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Christopher, M.: Logistics and supply chain management. Financial Times/Prentice Hall (2010)Google Scholar
  2. 2.
    Wagner, S.M., Neshat, N.: Assessing the vulnerability of supply chains using graph theory. International Journal of Production Economics 126(1), 121–129 (2010)CrossRefGoogle Scholar
  3. 3.
    De Souza, R., Goh, M., Meng, F.: A risk management framework for supply chain networks. TLI - Asia Pacific White Papers Series (2007)Google Scholar
  4. 4.
    Naraharisetti, P.K., et al.: From PSE to PSE2—Decision support for resilient enterprises. In: FOCAPO 2008 – Selected Papers from the Fifth International Conference on Foundations of Computer-Aided Process Operations, vol. 33(12), pp. 1939–1949 (2009)Google Scholar
  5. 5.
    Christopher, M.: Logistics and supply chain management: creating value-adding networks. Pearson Education (2005)Google Scholar
  6. 6.
    Tang, C., Tomlin, B.: The power of flexibility for mitigating supply chain risks. International Journal of Production Economics 116(1), 12–27 (2008)CrossRefGoogle Scholar
  7. 7.
    Jüttner, U., Peck, H., Christopher, M.: Supply chain risk management: outlining an agenda for future research. International Journal of Logistics: Research and Applications 6(4), 197–210 (2003)CrossRefGoogle Scholar
  8. 8.
    Trkman, P., McCormack, K.: Supply chain risk in turbulent environments—A conceptual model for managing supply chain network risk. International Journal of Production Economics 119(2), 247–258 (2009)CrossRefGoogle Scholar
  9. 9.
    Sheffi, Y., Rice, J.: A supply chain view of the resilient enterprise. MIT Sloan Management Review 47(1) (2005)Google Scholar
  10. 10.
    Li, Z.P., Tan, P.S., Yee, Q.M., et al.: A Review of Complex Systems Technologies for Supply Chain Risk Management. In: IEEE International Conference on Systems, Man, and Cybernetics 2013, Manchester, UK (2013)Google Scholar
  11. 11.
    Christopher, M., Peck, H.: Building the resilient supply chain. The International Journal of Logistics Management 15(2), 1–14 (2004)CrossRefGoogle Scholar
  12. 12.
    Tang, C.S.: Perspectives in supply chain risk management. International Journal of Production Economics 103(2), 451–488 (2006)CrossRefGoogle Scholar
  13. 13.
    Tang, C.S.: Robust strategies for mitigating supply chain disruptions. International Journal of Logistics: Research and Applications 9(1), 33–45 (2006)CrossRefGoogle Scholar
  14. 14.
    Lee, H.L., Billington, C.: Material management in decentralized supply chains. Oper. Res. 41(5), 835–847 (1993)CrossRefzbMATHGoogle Scholar
  15. 15.
    Blackhurst, J., Wu, T., O’grady, P.: Network-based approach to modelling uncertainty in a supply chain. International Journal of Production Research 42(8), 1639–1658 (2004)CrossRefzbMATHGoogle Scholar
  16. 16.
    Blackhurst, J., et al.: An empirically derived agenda of critical research issues for managing supply-chain disruptions. International Journal of Production Research 43(19), 4067–4081 (2005)CrossRefGoogle Scholar
  17. 17.
    Thun, J.-H., Hoenig, D.: An empirical analysis of supply chain risk management in the German automotive industry. International Journal of Production Economics 131(1), 242–249 (2011)CrossRefGoogle Scholar
  18. 18.
    Carvalho, H., et al.: Supply chain redesign for resilience using simulation. Computers & Industrial Engineering 62(1), 329–341 (2012)CrossRefGoogle Scholar
  19. 19.
    Kull, T., Closs, D.: The risk of second-tier supplier failures in serial supply chains: Implications for order policies and distributor autonomy. European Journal of Operational Research 186(3), 1158–1174 (2008)CrossRefzbMATHGoogle Scholar
  20. 20.
    Oke, A., Gopalakrishnan, M.: Managing disruptions in supply chains: A case study of a retail supply chain. International Journal of Production Economics 118(1), 168–174 (2009)CrossRefGoogle Scholar
  21. 21.
    Benyoucef, M., Canbolat, M.: Fuzzy AHP-based supplier selection in e-procurement. International Journal of Services and Operations Management 3(2), 172–192 (2007)CrossRefGoogle Scholar
  22. 22.
    Swink, M., Zsidisin, G.: On the benefits and risks of focused commitment to suppliers. International Journal of Production Research 44(20), 4223–4240 (2006)CrossRefGoogle Scholar
  23. 23.
    Sirivunnabood, S., Kumara, S.: Comparison of mitigation strategies for supplier risks: A multi agent-based simulation approach. In: IEEE/INFORMS International Conference on Service Operations, Logistics and Informatics, SOLI 2009. IEEE (2009)Google Scholar
  24. 24.
    Behdani, B., Adhitya, A.: Mitigating supply disruption for a global chemical supply chain - Application of agent-based modeling. In: Proceedings of the 11th International Symposium on Process Systems Engineering, Singapore (2012)Google Scholar
  25. 25.
    Doege, J., et al.: Risk management in power markets: The hedging value of production flexibility. European Journal of Operational Research 199(3), 936–943 (2009)CrossRefzbMATHGoogle Scholar
  26. 26.
    Swafford, P.M., Ghosh, S., Murthy, N.: The antecedents of supply chain agility of a firm: scale development and model testing. Journal of Operations Management 24(2), 170–188 (2006)CrossRefGoogle Scholar
  27. 27.
    Cucchiella, F., Gastaldi, M.: Risk management in supply chain: a real option approach. Journal of Manufacturing Technology Management 17(6), 700–720 (2006)CrossRefGoogle Scholar
  28. 28.
    Ben-Tal, A., et al.: Robust optimization for emergency logistics planning: Risk mitigation in humanitarian relief supply chains. Transportation Research Part B: Methodological 45(8), 1177–1189 (2011)CrossRefGoogle Scholar
  29. 29.
    Whang, S., Lee, H.: Value of postponement. In: Product Variety Management, pp. 65–84. Springer (1998)Google Scholar
  30. 30.
    Yang, B., Yang, Y.: Postponement in supply chain risk management: a complexity perspective. International Journal of Production Research 48(7), 1901–1912 (2010)CrossRefzbMATHGoogle Scholar
  31. 31.
    Klibi, W., Martel, A., Guitouni, A.: The design of robust value-creating supply chain networks: A critical review. European Journal of Operational Research 203(2), 283–293 (2010)CrossRefzbMATHGoogle Scholar
  32. 32.
    Klibi, W., Martel, A.: Modeling approaches for the design of resilient supply networks under disruptions. International Journal of Production Economics 135(2), 882–898 (2012)CrossRefGoogle Scholar
  33. 33.
    Pearson, M., Masson, R., Swain, A.: Process control in an agile supply chain network. International Journal of Production Economics 128(1), 22–30 (2010)CrossRefGoogle Scholar
  34. 34.
    Baghalian, A., Rezapour, S., Farahani, R.Z.: Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life case. European Journal of Operational Research 227(1), 199–215 (2013)CrossRefzbMATHMathSciNetGoogle Scholar
  35. 35.
    Kumar, S.K., Tiwari, M.K., Babiceanu, R.F.: Minimisation of supply chain cost with embedded risk using computational intelligence approaches. International Journal of Production Research 48(13), 3717–3739 (2009)CrossRefGoogle Scholar
  36. 36.
    Rajaram, K., Tang, C.S.: The impact of product substitution on retail merchandising. European Journal of Operational Research 135(3), 582–601 (2001)CrossRefzbMATHGoogle Scholar
  37. 37.
    Bitran, G.R., Dasu, S.: Ordering policies in an environment of stochastic yields and substitutable demands. Operations Research, 999–1017 (1992)Google Scholar
  38. 38.
    Chod, J., Rudi, N.: Resource flexibility with responsive pricing. Operations Research 53(3), 532–548 (2005)CrossRefzbMATHGoogle Scholar
  39. 39.
    Lariviere, M.A., Porteus, E.L.: Selling to the newsvendor: An analysis of price-only contracts. Manufacturing & Service Operations Management 3(4), 293–305 (2001)CrossRefGoogle Scholar
  40. 40.
    Cachon, G.P.: Supply chain coordination with contracts. In: Handbooks in Operations Research and Management Science, vol. 11, pp. 229–340 (2003)Google Scholar
  41. 41.
    Emmons, H., Gilbert, S.M.: Note. The role of returns policies in pricing and inventory decisions for catalogue goods. Management Science 44(2), 276–283 (1998)CrossRefzbMATHGoogle Scholar
  42. 42.
    Dana Jr., J.D., Spier, K.E.: Revenue sharing and vertical control in the video rental industry. The Journal of Industrial Economics 49(3), 223–245 (2001)CrossRefGoogle Scholar
  43. 43.
    Tsay, A.A., Lovejoy, W.S.: Quantity flexibility contracts and supply chain performance. Manufacturing & Service Operations Management 1(2), 89–111 (1999)CrossRefGoogle Scholar
  44. 44.
    Li, X., Marlin, T.E.: Robust supply chain performance via Model Predictive Control. Computers & Chemical Engineering 33(12), 2134–2143 (2009)CrossRefGoogle Scholar
  45. 45.
    Ben-Tal, A., Boaz, G., Shimrit, S.: Robust multi-echelon multi-period inventory control. European Journal of Operational Research 199(3), 922–935 (2009)CrossRefzbMATHGoogle Scholar
  46. 46.
    Tarantino, A.: Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices. John Wiley & Sons (2008)Google Scholar
  47. 47.
    Sun, J., Matsui, M., Yin, Y.: Supplier risk management: An economic model of P-chart considered due-date and quality risks. International Journal of Production Economics 139(1), 58–64 (2012)CrossRefGoogle Scholar
  48. 48.
    Speier, C., et al.: Global supply chain design considerations: Mitigating product safety and security risks. Journal of Operations Management 29(7-8), 721–736 (2011)CrossRefGoogle Scholar
  49. 49.
    Wang, J.: Mitigation strategies on scale-free networks against cascading failures. Physica A: Statistical Mechanics and its Applications 392(9), 2257–2264 (2013)CrossRefGoogle Scholar
  50. 50.
    Braunscheidel, M.J., Suresh, N.C.: The organizational antecedents of a firm’s supply chain agility for risk mitigation and response. Journal of Operations Management 27(2), 119–140 (2009)CrossRefGoogle Scholar
  51. 51.
    Sawik, T.: Selection of resilient supply portfolio under disruption risks. Omega 41(2), 259–269 (2013)CrossRefGoogle Scholar
  52. 52.
    Ji, G., Zhu, C.: Study on supply chain disruption risk management strategies and model. In: 2008 International Conference on Service Systems and Service Management. IEEE (2008)Google Scholar
  53. 53.
    Schmitt, A.J.: Strategies for customer service level protection under multi-echelon supply chain disruption risk. Transportation Research Part B: Methodological 45(8), 1266–1283 (2011)CrossRefGoogle Scholar
  54. 54.
    Schmitt, A.J., Singh, M.: A quantitative analysis of disruption risk in a multi-echelon supply chain. International Journal of Production Economics 139(1), 22–32 (2012)CrossRefGoogle Scholar
  55. 55.
    Ratick, S., Meacham, B., Aoyama, Y.: Locating backup facilities to enhance supply chain disaster resilience. Growth and Change 39(4), 642–666 (2008)CrossRefGoogle Scholar
  56. 56.
    Kleindorfer, P.R., Saad, G.H.: Managing disruption risks in supply chains. Production and Operations Management 14(1), 53–68 (2005)CrossRefGoogle Scholar
  57. 57.
    Zhao, R., et al.: Using game theory to describe strategy selection for environmental risk and carbon emissions reduction in the green supply chain. Journal of Loss Prevention in the Process Industries 25(6), 927–936 (2012)CrossRefGoogle Scholar
  58. 58.
    Zhu, Q.-H., Dou, Y.-J.: Evolutionary game model between governments and core enterprises in greening supply chains. Systems Engineering-Theory & Practice 27(12), 85–89 (2007)CrossRefGoogle Scholar
  59. 59.
    Sun, Y., Xu, X., Hua, Z.: Mitigating bankruptcy propagation through contractual incentive schemes. Decision Support Systems 53(3), 634–645 (2012)CrossRefGoogle Scholar
  60. 60.
    Barroso, A., Machado, V., Machado, V.C.: Supply Chain Resilience Using the Mapping Approach. In: Li, P. (ed.) Supply Chain Management. InTech (2011)Google Scholar
  61. 61.
    Li, Z.P., Yee, Q.M.G., Tan, P.S., Lee, S.G.: An Extended Risk Matrix Approach for Supply Chain Risk Assessment. In: IEEE international Conference on Industrial Engineering and Engineering Management (IEEM), Bangkok, December 10-13 (2013)Google Scholar
  62. 62.
    Zhang, A.N., Wagner, S.M., Goh, M., Terhorst, M., Ma, B.: Quantifying Supply Chain Disruption Risk Using VaR. In: The IEEE International Conference on Industrial Engineering and Engineering Management, Hong Kong (2012)Google Scholar
  63. 63.
    Ni, H., Chen, A., Chen, N.: Some extensions on risk matrix approach. Safety Science 48(10), 1269–1278 (2010)CrossRefGoogle Scholar
  64. 64.
    McElroy, M.W.: Integrating complexity theory, knowledge management and organizational learning. Journal of Knowledge Management 4(3), 195–203 (2000)CrossRefGoogle Scholar
  65. 65.
    Tang, O., Nurmaya Musa, S.: Identifying risk issues and research advancements in supply chain risk management. International Journal of Production Economics 133(1), 25–34 (2011)CrossRefGoogle Scholar
  66. 66.
    Giannakis, M., Louis, M.: A multi-agent based framework for supply chain risk management. Journal of Purchasing and Supply Management 17(1), 23–31 (2011)CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  1. 1.Singapore Institute of Manufacturing TechnologySingaporeSingapore

Personalised recommendations