COVID-19 Disruption Strategy for Redesigning Global Supply Chain Network across TPP Countries

Takaki Nagao, Hiromasa Ijuin, Tetsuo Yamada, Keisuke Nagasawa and Lei Zhou
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Takaki Nagao: Department of Informatics, The University of Electro-Communications, 1-5-1 Chofugaoka, Tokyo 182-8585, Japan
Hiromasa Ijuin: Department of Informatics, The University of Electro-Communications, 1-5-1 Chofugaoka, Tokyo 182-8585, Japan
Tetsuo Yamada: Department of Informatics, The University of Electro-Communications, 1-5-1 Chofugaoka, Tokyo 182-8585, Japan
Keisuke Nagasawa: Graduate School of Advanced Science and Engineering, Hiroshima University, 1-4-1 Kagamiyama, Higashihiroshima 739-8527, Japan
Lei Zhou: Graduate School of Sciences and Technology for Innovation, Yamaguchi University, 2-16-1 Tokiwadai, Ube 755-8611, Japan

Logistics, 2021, vol. 6, issue 1, 1-26

Abstract: Background : COVID-19 has disrupted and adversely affected supply chains worldwide. A global supply chain network that considers disruptions is needed. This study strategically analyzes the economic and structural effects of disruption on a global supply chain network with customs duty and the trans-pacific partnership (TPP) agreement. Methods : We present a cost minimization model which helps in understanding the difficulty of supplying materials or products to factories or customers if the supplier’s cities are facing disruption. This enables us to model and evaluate simultaneous considerations of supplier disruption, customs duty, and TPP in redesigning a global supply chain network. This network is modeled and formulated using integer programming, disruption scenarios, and a sensitivity analysis for customs duty. Results : Regarding the impact of disruptions on suppliers, two patterns emerge in the reconfigured network: direct changes due to supplier disruptions and indirect changes due to factory relocation. The sensitivity analysis for customs duty shows that the TPP has a positive impact on cost maintained, even in the presence of disruptions. Conclusions : Suppliers should be switched depending on the scale of disruption; when many distant suppliers need to be switched, the factory should be relocated to the country where these suppliers are located.

Keywords: pandemic plan; resilience; bill of material (BOM); free trade agreement (FTA); integer programming (IP); resilient supply chain; business continuity plan (BCP) (search for similar items in EconPapers)
JEL-codes: L8 L80 L81 L86 L87 L9 L90 L91 L92 L93 L98 L99 M1 M10 M11 M16 M19 R4 R40 R41 R49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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