Abstract
Management of supply network risks is a critical competency for today's global enterprises. Current practices and tools, however, have limited capabilities and do not allow for systemic exploration of alternate risk strategies. We develop a computational model of risk diffusion in global supply networks that is grounded in techniques from complex systems, network analysis, and epidemiological risk modeling. We draw on a unique, curated dataset of firms, their supply networks, and financial risk in the global electronics industry. Specifically, we assess and visualize the impact of network structure on risk diffusion and supply network health, and determine the impact of visibility on reduction and potential mitigation of cascading risks. Our approach enables decision makers to identify risks and determine potential paths of their diffusion. In doing so, we advance our understanding of the design and development of computational risk management tools in a global supply network context.
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