Balancing Cost and Resilience in Supply Chain Network Design

Alice Lawrence

No wuk6m_v1, OSF Preprints from Center for Open Science

Abstract: In today's highly competitive and volatile business environment, designing a supply chain network that strikes an optimal balance between cost-efficiency and resilience is crucial for sustaining long-term performance. This paper explores the intricate challenge of balancing these two key objectives in supply chain network design. Cost reduction has traditionally been a central goal, driving decisions around supplier selection, transportation networks, and inventory management. However, increasing global disruptions—ranging from natural disasters to geopolitical tensions—highlight the need for robust supply chains that can adapt to unforeseen shocks. By integrating cost minimization with resilience strategies, organizations can develop networks that are not only efficient but also agile and adaptable in the face of change. Through a combination of theoretical frameworks and practical case studies, this research proposes a multi-criteria decision-making model that incorporates both cost and resilience factors. We examine various strategies, such as diversification, inventory buffering, and flexible transportation routes, while also considering trade-offs that may arise between financial performance and operational flexibility. The study concludes that while achieving an absolute balance is challenging, a dynamic, context-sensitive approach to supply chain design can enable firms to navigate the complexities of modern global markets with greater agility and confidence. Keywords: Supply chain network design, cost efficiency, resilience, multi-criteria decision-making, global disruptions, supply chain agility, operational flexibility, inventory management, transportation strategy, strategic trade-offs.

Date: 2024-07-22
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:wuk6m_v1

DOI: 10.31219/osf.io/wuk6m_v1

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