Research on Dynamic Analysis and Mitigation Strategies of Supply Chains under Different Disruption Risks

Qing Zhang, Weiguo Fan, Jianchang Lu, Siqian Wu and Xuechao Wang
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Qing Zhang: Department of Economics and Management, North China Electric Power University, Baoding 071003, China
Weiguo Fan: Department of Economics and Management, North China Electric Power University, Baoding 071003, China
Jianchang Lu: Department of Economics and Management, North China Electric Power University, Baoding 071003, China
Siqian Wu: Department of Economics and Management, North China Electric Power University, Baoding 071003, China
Xuechao Wang: Sustainable Process Integration Laboratory—SPIL, NETME Centre, Faculty of Mechanical Engineering, Brno University of Technology—VUT Brno, Technická 2896/2, 616 69 Brno, Czech Republic

Sustainability, 2021, vol. 13, issue 5, 1-29

Abstract: Due to the globalization of supply and production, supply chain management has tightened the connection between upstream and downstream enterprises. Although this modern strategy has significantly improved the efficiency of enterprises, the increasingly complex relationship between nodes also makes the supply chain system more vulnerable and unstable. As a result, the interruption of any node location in the supply chain will spread to other nodes via their diffusion, which could cause irreparable damage to the entire supply chain. Therefore, under this realistic background, only by quantitatively analyzing the specific impact on the supply chain of interruption events in different locations we can formulate active and effective mitigation strategies to achieve the effective recovery of node enterprises from interruption accidents. In this study, the system dynamics method was used to simulate the changes in inventory level, order accumulation, and profit level caused by disruption of supply, production, and sales of different node companies. The results show that the closer the node enterprise to the interruption source, the greater the risk of loss. Due to the conduction effect of the supply chain system, the risk spreads to other node enterprises. Based on the above results, corresponding mitigation strategies for enterprises to cope with different node interruptions are proposed to improve the overall efficiency and operational capabilities of the enterprise.

Keywords: disruption risks; dynamic impact; supply chain management; risk mitigation strategy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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