Proactive and reactive models for disaster resilient supply chain

Abstract

Natural or man-made disasters lead to disruptions across entire supply chain, hugely affecting the entire distribution system. Owing to disaster, the supply chain usually takes longer time to recover and eventually leads to loss in reputation and revenue. Therefore, business organizations are constantly focusing on making its distribution network of a supply chain resilient to either man-made or natural disasters in order to satisfy customer demand in time. The supply chain distribution network broadly comprises of two major decisions i.e. facility location and vehicle routing. The paper addresses these distribution decisions jointly as location-routing problem. The paper proposes Location-Routing Model with Time Windows using proactive and reactive approaches. In proactive approach, the risk factors are considered as preventive measure for disaster caused disruptions. The model is extended for reactive approach by considering the disruptions such as facility breakdowns, route blockages, and delivery delays with cost penalties. The case illustration is discussed for proactive approach. In case of disaster caused disruptions, the reactive approach is illustrated using three disruption case scenarios. Using both proactive and reactive approach, designing the distribution system can make the overall supply chain a disaster resilient supply chain.