System model of risks and trees of alternative solutions for improving the logistics chain at a manufacturing enterprise

Abstract

The subject of this article is the decision-making processes for improving the elements of the supply chain of a manufacturing enterprise under conditions of uncertainty and risks. The purpose of the research is to reduce the time and cost of in supply and distribution of products of manufacturing enterprises by considering possible risks through making rational management decisions. The article addresses the following tasks: examination of the characteristics of supply chain elements; investigation of the main problems of supply and distribution management and identification of ways to solve them; development of a systemic model of logistic risks for a manufacturing enterprise; and formation of decision trees for alternative decisions in strategic supply chain management at manufacturing enterprises. The methods applied include a systems approach, structural decomposition methods, a risk-oriented approach. The following results were obtained: features and problems of supply chain elements such as supply, production, storage, and distribution were examined and identified; main supply chain management tasks were investigated and solutions identified; problems in warehouse management were pinpointed; internal and external supply risks were identified; a systemic model of logistic risks for a manufacturing enterprise was formed, which main components are logistic problems, partial risks, their consequences, and possible management decisions to mitigate risks; decision trees were built for problems of raw material supply instability and transportation bottlenecks and delays; an alternative decision diagram was constructed for an illustrative example. Conclusions: To overcome the problem of raw material supply instability, it is recommended to develop diversification of supply sources, stock reservation, and the use of alternative transport routes. Building alternative decision trees in strategic management is an effective tool for making rational decisions by manufacturing enterprises in complex conditions of uncertainty and risks. They help to analyze alternatives and their consequences to choose a path to optimize the supply chain.