Table of Contents
Acknowledgements …………………………………………………………………………………………… vii
Contents ……………………………………………………………………………………………………………. ix
List of Tables ……………………………………………………………………………………………………. xii
List of Figures ………………………………………………………………………………………………….. xiii
1. Introduction ……………………………………………………………………………………………………. 1
1.1. Background and motivations …………………………………………………………………… 1
1.1.1. Supply chain …………………………………………………………………………………… 1
1.1.2. Four key trends in managing supply chains ………………………………………… 3
1.1.3. Riskier supply chains ………………………………………………………………………. 7
1.1.4. Solution: Passively avoiding the trends or Actively managing the risk? …. 9
1.1.5. The necessity of modeling and simulation in managing disruptions …….. 11
1.2. Research objectives and thesis storyline ………………………………………………….. 13
1.3. Outline of the thesis ……………………………………………………………………………… 14
2. Handling supply chain disruptions: two different views ………………………………….. 17
2.1. Introduction …………………………………………………………………………………………. 17
2.2. Handling disruptions in supply chains- two common perspectives ……………… 18
2.3. Importance of both views in handling supply chain disruptions …………………. 19
2.4. An overview of frameworks to handle disruptions in supply chains ……………. 21
2.5. Chapter summary …………………………………………………………………………………. 27
3. Handling supply chain disruptions: an integrated framework ………………………… 29
3.1. Introduction …………………………………………………………………………………………. 29
3.2. Framework development process …………………………………………………………… 29
3.3. Integrated Framework for Managing Disruption Risks in Supply Chains
(InForMDRiSC) ……………………………………………………………………………………………… 32
3.3.1. Some introductory definitions …………………………………………………………. 32
3.3.2. The Integrated Framework structure ………………………………………………… 34
3.4. Evaluation of framework ………………………………………………………………………. 42
3.5. Chapter summary …………………………………………………………………………………. 49
4. Handling supply chain disruptions: A review of key issues ……………………………… 51
4.1. Introduction …………………………………………………………………………………………. 51
4.2. Risk Identification ………………………………………………………………………………… 52
4.2.1. Risk identification method ……………………………………………………………… 52
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4.2.2. Risk classification scheme ……………………………………………………………… 56
4.3. Risk Quantification ………………………………………………………………………………. 59
4.3.1. Likelihood estimation methods ……………………………………………………….. 59
4.3.2. Impact estimation methods …………………………………………………………….. 60
4.4. Risk Evaluation & Treatment ………………………………………………………………… 62
4.4.1. Risk acceptance …………………………………………………………………………….. 64
4.4.2. Risk reduction ………………………………………………………………………………. 64
4.4.3. Risk avoidance ……………………………………………………………………………… 70
4.4.4. Risk transfer …………………………………………………………………………………. 71
4.5. Risk Monitoring …………………………………………………………………………………… 71
4.6. Disruption Detection …………………………………………………………………………….. 72
4.6.1. Visibility and information access …………………………………………………….. 72
4.6.2. Information analysis tools ………………………………………………………………. 72
4.6.3. Disruption causal analysis ………………………………………………………………. 73
4.7. Disruption Reaction & Recovery ……………………………………………………………. 73
4.7.1. Resource finding and (re-)allocation ……………………………………………….. 74
4.7.2. Communication and information sharing …………………………………………. 74
4.7.3. Coordination of activities and actors ……………………………………………….. 75
4.8. Learning & SC Redesign ………………………………………………………………………. 75
4.9. The analysis of literature and identified gaps …………………………………………… 75
4.10. Chapter summary …………………………………………………………………………………. 78
5. Modeling for disruption management: choice of simulation paradigm ……………. 81
5.1. Introduction …………………………………………………………………………………………. 81
5.2. How to develop a simulation model: an overview of main steps ………………… 84
5.3. Supply chains as socio-technical systems ………………………………………………… 87
5.4. Supply chains as Complex Adaptive Systems ………………………………………….. 90
5.4.1. Micro-level properties of complex adaptive systems …………………………. 91
5.4.2. Macro-level properties of complex adaptive systems …………………………. 94
5.5. Modeling requirements for disruption management in supply chain …………… 96
5.6. Overview of simulation paradigms for complex socio-technical systems …….. 97
5.6.1. System Dynamics (SD) ………………………………………………………………….. 98
5.6.2. Discrete-Event Simulation (DES) ………………………………………………….. 100
5.6.3. Agent-based Modeling (ABM) ……………………………………………………… 102
5.7. Choice of simulation paradigm …………………………………………………………….. 104
5.7.1. Capturing micro-level complexity …………………………………………………. 105
5.7.2. Capturing macro-level complexity ………………………………………………… 108
5.7.3. Flexibility in modeling for disruptions management in supply chains … 111
5.8. Choice of agent-based modeling as simulation paradigm ………………………… 112
5.9. Analysis of supply chain simulation literature ………………………………………… 114
5.10. Chapter summary ……………………………………………………………………………….. 118
6. Modeling for disruption management: an ABM framework …………………………. 121
6.1. Introduction ……………………………………………………………………………………….. 121
6.2. A framework for supply chain disruption modeling ………………………………… 122
6.3. Supply chain modeling ……………………………………………………………………….. 124
6.3.1. System sub-model ……………………………………………………………………….. 124
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6.3.2. Environment sub-model ……………………………………………………………….. 157
6.4. Disruption modeling …………………………………………………………………………… 158
6.5. Disruption management modeling ………………………………………………………… 161
6.6. Software implementation …………………………………………………………………….. 163
6.7. Chapter summary ……………………………………………………………………………….. 166
7. Lube oil SC case: model development and use for normal operation ……………… 167
7.1. Introduction ……………………………………………………………………………………….. 167
7.2. Case description …………………………………………………………………………………. 167
7.3. Computer model development ……………………………………………………………… 174
7.4. Simulation set-up ……………………………………………………………………………….. 181
7.5. Validation and verification ………………………………………………………………….. 187
7.6. Experimental set-up ……………………………………………………………………………. 192
7.7. Model application for normal operation of supply chain ………………………….. 196
7.7.1. Experiment set-up 1: inventory management in MPE supply chain ……. 196
7.7.2. Experiment set-up 2: negotiation-based order acceptance process ……… 204
7.8. Model application for supply chain disruption management …………………….. 217
7.9. Model application for pre-disruption process …………………………………………. 219
7.9.1. Numerical Experiment 1: mitigation of supplier risk ……………………….. 221
7.9.2. Numerical Experiment 2: managing multiple types of disruptions …….. 224
7.10. Model application for post-disruption process ……………………………………….. 226
7.10.1. Numerical Experiment 1: model application for Disruption Detection .. 229
7.10.2. Numerical experiment 2: model application for Disruption Reaction &
Recovery 230
7.10.3. Numerical experiment 3: model application for Disruption Learning &
Network Redesign ……………………………………………………………………………………… 236
7.11. Discussion on modeling framework ……………………………………………………… 238
7.12. Application of modeling framework for future cases ………………………………. 243
7.13. Chapter summary ……………………………………………………………………………….. 249
8. Conclusions and future research ………………………………………………………………….. 251
8.1. Conclusions ……………………………………………………………………………………….. 251
8.1.1. An integrated framework for handling disruptions in supply chains …… 251
8.1.2. A modeling framework for disruption management in supply chains …. 255
8.2. Reflection ………………………………………………………………………………………….. 259
8.2.1. Reflection on InForMDRiSC development and application ………………. 259
8.2.2. Reflection on simulation framework development and application ……. 260
8.2.3. Reflection on agent based modeling (ABM) …………………………………… 260
8.3. Recommendations for future research …………………………………………………… 261
8.3.1. Extending the Integrated Framework (InForMDRiSC) …………………….. 261
8.3.2. Developing the modeling framework …………………………………………….. 261
8.3.3. Research on socio-technical complexity of supply chains ………………… 262
8.3.4. Recommendations for further research on supply chain risk management
262
Appendix A: Description of steps in the existing frameworks ……………………………. 265
Appendix B: The list of experts for framework evaluation ……………………………….. 273
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Appendix C: The extended structure of InForMDRiSC ……………………………………. 275
C.1. Introduction …………………………………………………………………………………………… 275
C.2. The extended structure of InForMDRiSC ………………………………………………….. 275
C.3. The illustrative case ………………………………………………………………………………… 286
Appendix D: Supply chain disruption/risk literature ………………………………………… 299
Appendix E: Application of ABM in Supply chain simulation literature …………… 305
Bibligraphy …………………………………………………………………………………………………….. 307
Summary ………………………………………………………………………………………………………… 345
Samenvatting ………………………………………………………………………………………………….. 349
Abstract
The degree of supply chain risk faced by many companies has risen dramatically and the impact of disruptions can cascade easily across companies’ and countries’ borders. To handle this increased vulnerability, systematic approaches and decision making tools are needed to provide support in managing supply chain disruptions. In this thesis, an integrated process: InForMDRiSC, and an agent-based simulation framework are presented and discussed. These two contributions are complementary means for managing supply chain disruptions. InForMDRiSC describes the steps to be followed in managing supply chain disruptions, whereas the simulation framework supports the building of simulation models for specific supply chains which enable decision makers to experiment with different strategies and tactics to prevent or recover from supply chain disruptions.
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