Global supply chain flow planning for Chinese manufacturing under the BRI: An SFG-DRO method

Abstract

The Belt and Road Initiative (BRI) has fostered the free flow of commodities and optimal distribution of resources for the global manufacturing supply chain (GMSC), meanwhile confronted with risks and uncertainties. This paper proposes the SFG-DRO method, which can well solve the flow distribution problem of GMSC under the BRI with uncertainties. The proposed method combines trend prediction from the stochastic frontier gravity (SFG) model with 1-Wasserstein fuzzy set-based distributionally robust optimization (DRO). Additionally, this paper integrates the principles of the column and constraint generation (C&CG) algorithm with the particle swarm optimization (PSO) algorithm to handle the above two-stage nonlinear problems efficiently. The results show that the SFG-DRO distribution method significantly reduces transportation costs by 25% and enhances security. By examining flow distribution across three key BRI channels, this paper identifies underexploited markets along the southward channel and substantial market potential with security risks along the northeast sea-land channel, proposing relevant improvement suggestions.