Design of a resilient shock absorber for disrupted supply chain networks: a shock-dampening fortification framework for mitigating excursion events

Abstract

This article interweaves the widely published empirical frameworks with a new paradigm proposing stochastic dynamic decision-making tools that could be employed for capturing the trade-offs among multiple and conflicting-in-nature criteria so as to provide a design of a resilient shock absorber (RSA) for disrupted supply chain network (SCN). Modern SCNs encounter ‘excursion events’ of different kinds mainly due to uncertain and turbulent markets, catastrophes, accidents, industrial disputes/strikes in organisations, terrorism and asymmetric information. An ‘excursion event’ is an unpredictable event that effectively shuts down or has a relatively large negative impact on the performance of at least one member of a system for a relatively long amount of time. In this article, design of an analytical framework has been conceptualised that allows an SCN to avoid propagating the ill effects of the ‘excursion events’ further and maintains the network at a desired equilibrium level. A broad analytical view of econophysics has been conceptualised using the definition of a ‘system’ from physics. An example derived from the 9/11 case has been delineated in order to illustrate the efficacy of the proposed design. The devised RSA facilitates the assessment of resiliency strategies for SCNs prone to excursion events that are characterised by low probability of occurrence and high impact. The shock-dampening fortification framework also enables practitioners to identify and assess quantitatively the islands of the excursion events in SCN.