Impact of Cloud-Based Mechanism on Supply Chain Performance with Supply Disruption Risk

Abstract

Supply chain is virtually an open complex giant system. Given nonlinearity, uncertainty and dynamics in supply chains, the case of supply disruptions caused by natural disasters, terrorist attacks and other kinds of accidents is increasing. A throughput-based analysis reveals that cloud-based mechanism improves the information sharing and quality controlling during the process of supply chain management when supply disruption occurs. In this regard, we investigate how supply disruption affects supply chain performance in traditional supply chain and cloud-based supply chain system. Applying system dynamics simulation, this paper established a two-echelon supply chain simulation mode and analyzes how each of these sub-structures responds to a supply disruption. Result shows that cloud-based system is an advanced supply chain management model, compared to traditional mode, it can effectively decline inventory, reduce cost, improve to be out of stock and raise service levels when experiencing supply disruption.