Supply Chain Design Research Articles

Designing supply chain strategies against epidemic outbreaks such as COVID‐19: Review and future research directions

AbstractThe supply chain is vulnerable to disruptions, which can lead to operational failure. Therefore, it is crucial to investigate and monitor the risks associated with such disruptions. Epidemics, including the profound impact of COVID‐19, exemplify disruptive risks that engender complexities throughout the value chain. COVID‐19 has caused significant disruptions to the global supply chain due to the preexisting fragile supply chains, resulting in the unavailability of essential raw materials, halts in production, and imbalances between supply and demand. It has forced the supply chain community to rethink their risk mitigation strategies. Despite its significance, there are a few studies on the existing options and strategies to mitigate the risks associated with epidemics such as COVID‐19. This special issue explores state‐of‐the‐art knowledge of various risks and their mitigation strategies, presenting optimized models and solutions. This editorial seeks to introduce valuable insights and illuminate promising avenues for future research by reviewing existing studies. The comprehensive understanding derived from this editorial and the accompanying articles of this special issue will benefit both researchers and practitioners, enabling them to navigate the multifaceted landscape of epidemic‐induced disruptive risks in the supply chain and adopt suitable mitigation strategies. Furthermore, this special issue lays a solid foundation for implementing advanced methods for managing and mitigating the disruptive risks that epidemics pose to the supply chain.

Optimal financing strategy and contract design of supply chain with yield uncertainty under cap-and-trade regulation

PurposeThe purpose of the study is to investigate the financing channels and carbon emission abatement preferences of supply chain members, and further examine the optimal contract design of the retailer.Design/methodology/approachThis paper develops a low-carbon supply chain composed of one retailer and one manufacturer, in which the retailer provides trade credit to the manufacturer. Considering the cap-and-trade regulation, the manufacturer with uncertain yield makes decision on whether to invest in emission abatement. There are bank loan and trade credit to finance production for the manufacturer and green credit to finance emission abatement investment. Meanwhile, the retailer may provide the manufacturer with three kinds of contracts to improve emission abatement efficiency, namely, revenue sharing, cost sharing or both sharing.FindingsThe results show that the retailer prefers to offer financing service at lower interest rate, but trade (and green) credit financing is always optimal for manufacturer and supply chain. The investment in emission abatement is value-added to all players. The sharing contracts offered by the retailer at lower sharing ratios can realize Pareto improvement of the system regardless of the financing scheme. However, comparing with the revenue or cost sharing contract, the existence of optimal sharing ratios makes the both sharing contract more favorable to the retailer.Practical implicationsThe findings provide guidance for the emission-dependent manufacturer in financing and emission abatement decisions, as well as recommendations for the retailer to offer loan service and sharing contract.Originality/valueThis paper integrates green credit into bank loan or trade credit to analyze the financing decision of the manufacturer with uncertain yield and further considers the influence of three kinds of sharing contracts introduced by the retailer on improving operational performance.

Value‐driven Optimization Campaign Addressing Manufacturing, Supply Chain and Overall Aircraft Design Domains in the Early Development Stage

AbstractIn the last decades, several studies demonstrate how the integration of manufacturing and supply chain in the early design phase brings significant advantages to industries. Within the European Project (AGILE 4.0, 2022), a value‐driven methodology concurrently coupling design, manufacturing and supply chain has been developed. This study aims at addressing a new challenge: the identification of non‐dominated solutions simultaneously accounting for manufacturing, design and supply chain variables. For this purpose, an optimization design campaign has been addressed in this research activity and the main results are‐here presented.

Insights on Resilience and Flexibility During COVID-19 Pandemic: A Study on Wheat Supply Chains in Pakistan

The Covid-19 pandemic has disrupted global supply chains, including those in the food industry, posing significant challenges to food security and sustainable production. This study focuses on investigating the resilience of Pakistan's wheat supply chain during the pandemic, with a particular emphasis on the concept of supply chain flexibility. Through structured interviews with 50 individuals involved in the wheat supply the study examines the impact of proactive capability, supply chain design, and reactive capability on the resilience of the wheat supply chain. The findings reveal that proactive capability in the wheat supply chain demonstrated flexibility in various aspects, except for sourcing. Integration among departments showed collaboration, but issues were encountered in information sharing and efficiency. The readiness of the supply chain showed detection ability but lacked training and strong security measures. Supply chain design complexities were observed in direct dealings and a lack of flexibility in flow. Reactive capability indicated challenges in quick response, crisis mitigation, and recovery, emphasizing the importance of response teams and financial readiness. The study provides valuable insights for supply chain managers, highlighting areas for improvement such as sourcing strategies, information management, quality control, and financial support. Future research could explore other sectors and agricultural products, investigating different geographical areas, and increasing the sample size. By further understanding the dynamics of supply chain resilience and flexibility, organizations can better prepare for and respond to disruptions, ensuring the continuity of critical food supply chains during crises.

Направления внедрения цифровых логистических технологий и сервисов в международных цепях поставок на рынке энергоресурсов с учетом их возобновляемости

The article formulates the prerequisites for the introduction of digital logistics technologies and services in the energy market, which consist in a high level of competition and tariff pressure, require the search for new opportunities to reduce capital and operating costs. The state and interstate regulation of the energy market, which manifests itself in the adoption of strategic trade and political decisions, requires the development and implementation of market mechanisms for the adaptation of supply chain participants and the creation of new economic ties. A customer-oriented approach to the design of supply chains in the energy market defines the introduction of digital technologies and services to create a more comfortable customer environment: increased transparency and ease of use, interconnection with other services, cheaper energy. There are defined the main directions of the introduction of digital logistics technologies and services. It is revealed that the differences in the design of supply chains in the energy market, taking into account their renewability, are based on the object of material flow management. In the supply chains of non-renewable energy sources, the object of management is resources (coal, oil and petroleum products, gas and gas chemistry products, etc.) and processes aimed at their exploration, production, processing, transportation, storage and consumption. In the supply chains of renewable energy sources, the object of management is the generated electric energy, as well as equipment and technologies for its production and storage – turbines for nuclear and hydroelectric power plants, wind generators, solar panels, storage devices for storing electric energy, etc. It has been inferred that certain digital logistics technologies and services in international supply chains on the energy market will take place subject to the resource renewability.

An Optimization Approach for A Biogas Supply Chain using Goal Programming and Mixed Integer Linear Programming

Environmental concerns prompt the world for a transition to renewable energy sources from fossil energy. Reducing the dependency on non-renewable sources of energy is prerequisite for the sustainable world and less environmental pollution. Biogas energy, which is one of the most important renewable energy sources, is produced by burning organic wastes and can be used in many different fields. In this study, a two-stage approach is undertaken to optimize a biogas supply chain design by incorporating of 30 districts in Izmir. In the first stage, the selection of the most suitable biogas plants is considered by the goal programming approach, which is of great importance to decide the optimal location with high energy potential. The most suitable sites for the biogas plants are obtained as Konak and Narlıdere districts. In the second stage, the location problem of the biogas vehicle charging stations (BVS) for biogas vehicles is handled considering the results of the first stage using mixed integer linear programming (MILP) approach. Computational results demonstrate that it would be more appropriate to establish BVS in 12 districts of İzmir. The model and solution approach are pioneering for supply chain problems and an efficient tool for renewable energy plans.

Optimal strategies for production plan and carbon emission reduction in a hydrogen supply chain under cap-and-trade policy

Hydrogen is now being seen as one of the most promising carbon-free and abundant energy sources on the path to net-zero emissions. However, high transportation, storage, and carbon emission costs in hydrogen supply chains are critical economic barriers that hinder the development of the hydrogen economy. Consequently, hydrogen refuelling stations have to face a trade-off between self-produced and purchased hydrogen quantities while considering transportation and storage costs. Furthermore, hydrogen manufacturers and refuelling stations have to make a trade-off between their hydrogen outputs and carbon emission reduction quantities under a cap-and-trade policy. We develop a differential game model that draws on and extends the literature on hydrogen supply chain design and operation to address this dual dilemma. Therein, state variables include the hydrogen retail price and carbon emission trading price, and control variables involve the hydrogen outputs and carbon emission reduction amounts of the hydrogen manufacturer and refuelling station. We use the feedback control technique to find optimal solutions and implement numerical simulations to validate solutions and the sensitivity of parameters. The results suggest that carbon emission reduction efficiency, hydrogen wholesale price, and carbon trading reference price significantly impact the optimal decisions of production plans and carbon emission reduction. This study may provide theoretical guidance for promoting hydrogen utilisation, cost reduction and low-carbon development.

Comparative analysis of lean and agile supply chain strategies for effective vaccine distribution in pandemics: A case study of COVID-19 in a densely populated developing region

Mass vaccination programs should employ effective strategies to design a resilient vaccine supply chain for immunizing populations quickly and efficiently. The need for more flexible and responsive vaccine supply chain design is highlighted during the pandemic, where authorities are required to effectively execute vaccine distribution. Our study proposes a scientifically driven approach to identify suitable supply chain strategies for vaccine distribution, enhancing the effectiveness of mass vaccination. We propose a two-stage approach for identifying the best supply chain strategy that supports faster vaccine rollouts, reducing infections and deaths during the pandemic. We optimize the vaccine distribution network under both supply chain strategies using Mixed Integer Programming (MIP) for four disruption scenarios in the first stage. Second, we have used systems dynamics simulation and the Susceptible-Exposed-Infectious-Recovered (SEIR) model for pandemics to identify the impact of vaccination. In all disruption scenarios, vaccine distribution using the Lean strategy is less costly, and the Agile strategy reduces lead time and supports faster vaccine rollout. We show achieving a cost-saving or lead-time saving using either supply chain strategy becomes increasingly difficult when the severity of disruptions at storage increases. Our study suggests a novel methodology that determines the most suitable strategy for vaccine distribution which minimizes infections and deaths under several disruption scenarios. The decision-makers can identify appropriate supply chain strategies for vaccine delivery to densely populated developing regions, using the proposed framework which compares supply chain strategies’ impact on vaccine distribution network design.

A multi-objective simulation-based decision support tool for wine supply chain design and risk management under sustainability goals

Sustainable Supply Chain Network Design (SCND) poses a complex challenge, as it often requires trade-offs in decision-making. The problem becomes even more challenging when there is a need to integrate risk management into the design process. It is steered by this challenge that the purpose of the paper is twofold. First, it proposes a Simulation-Based Decision Support System (SBDSS) for a real case study of a Portuguese wine SCND problem. Second, it analyzes different wine Supply Chain (SC) configurations under risk situations and sustainability objectives. The main contributions of this research are as follows. First, it concerns the method that was employed, which, contrarily to traditional approaches in literature (e.g., stochastic or genetic programming), consists of a simulation approach, in which agents and their interactions in an environment with uncertainty are modeled. Second, for the generation of non-dominated solutions, a simheuristic was employed, which combines multi-objective optimization with simulation. Finally, the type of industry that was considered, due to the lack of cases focusing on it in literature. The results suggest that the proposed approach determines a set of Pareto-front solutions that consider the sustainability dimensions of SCND, as well as risk situations. Furthermore, the implications that several parameters have on the sustainability of the designed SCs were assessed, as well as the impacts that the considered risks have on the performance of SCs. In particular, it was found that transportation risks impacted considerably more the performance of the SC than the risks on the prices of energy and raw materials.

Delivering societal impact through supply chain design: insights from B Corps

PurposeThis paper examines how different configurations of societal impact are pursued by purpose-driven organizations (PDOs) and how these configurations align with the application of varying supply chain design (SCD) practices.Design/methodology/approachThis multi-method study uses quantitative data from 1588 B Corps and qualitative data from 316 B Corps to examine how PDOs align SCD with the pursuit of diverse types of societal impact. The authors first conduct a cluster analysis to group organizations based on the impact they create. Second, qualitative content analysis connects impact with enabling SCD elements.FindingsThe analysis of the five identified clusters provides detailed empirical insights on influencers, design decisions and building blocks adopted by PDOs to drive a range of societal impacts. Specifically, the nature of the impact pursued affects (1) whether a PDO will be more influenced by a need in the political environment or an opportunity in the industry environment, (2) the relative importance of the design of social flows versus material flows and (3) the need to develop new relational resources with beneficiaries versus leveraging existing capabilities to manage inter-firm processes.Originality/valueThis study responds to calls to disaggregate different dimensions of societal impact and examines the relationship between SCD and a breadth of sustainability impacts for different stakeholders. In doing so, the authors identify four SCD pathways organizations can follow to achieve specific societal impacts. This study is also the first to employ a supply chain perspective in the study of certified B Corps.

A scenario-based sustainable dual-channel closed-loop supply chain design with pickup and delivery considering social conditions in a natural disaster under uncertainty: a real-life case study.

In the context of the COVID-19 pandemic, utilizing the potential of online markets to sell products has become increasingly important for creating competitive advantages and ensuring the growth and survival of businesses. The pandemic has disrupted traditional business practices, and with social distancing measures in place, consumers have turned to online channels to meet their needs. As a result, businesses that have adapted quickly to online markets have been able to maintain their customer base and revenue streams. Thus, considering the potential of online markets is of utmost importance in the current pandemic situation. In this regard, the present research aims to provide a practical framework for creating a green and sustainable closed-loop supply chain network (SCLSCN), including the integration of online markets, to assist managers in making decisions that support economic, environmental, and social goals. Accordingly, a multi-objective mixed integer linear programming (MOMILP) optimization model was designed under uncertain demand and disruption caused by natural disasters in Iran's home appliance industry. The study also considered changes in the capacities of online and marketplace sales channels, revealing a significant reduction in costs at each stage. The results show that the increase in demand has a direct impact on the production level, warehousing, and transportation costs, leading to social impacts on the model. However, the current system cannot handle an increase in demand of more than 20%, requiring managers to make decisions to increase production capacity or build new factories. Thus, the study highlights the importance of considering online markets as a means to adapt to disruptions caused by the pandemic and maintain a competitive edge.

Collaborative location routing problem for sustainable supply chain design with profit sharing.

To identify the sustainability synergies in a collaborative Moroccan dry food wholesale chain, we investigate the financial and ecological effects of implementing horizontal cooperation between three competitor shippers. For business-to-business networks, the key objective is to ensure last-mile delivery to their clients in metropolitan areas. The implementation of this alliance requires studying different aspects, among them the design of the transportation network, fair profit sharing, and collaborative delivery planning. Limited studies have considered the effects of integrating facility location and vehicle routing by addressing multiple goals in the design of a sustainable collaborative supply chain. We model the problem as a periodic two-echelon echelon-periodic location routing problem to integrate different decision levels. In order to investigate the trade-offs between the two opposing goals, a multi-objective approach is adopted. The Epsilon constraint method is used to generate a compromise between economic and ecological impacts. Cost and carbon emission sharing are assessed through the Shapley value mechanism. Furthermore, to determine the effect of parameter changes on the attained savings, a scenario analysis is performed. Results show the positive effect of collaboration among shippers and the importance of using integrated network design models. Environmental considerations in the pursuit of economic goals affect the gains produced and result in various transportation network structures. The performance of the coalition varies under different scenarios. Managerial implications are presented.

Designing a centralized distribution system for omni‐channel retailing

We study the optimal supply chain design for a dual‐channel retailer that operates physical and web‐based stores and has traditionally managed each one separately. With increased pressures from customers and decreased profits due to marked‐down leftover inventories in each channel, the retailer considers integrating the supply chain operations of both channels and using in‐store inventory more effectively across different channels. In contrast to the existing literature, we focus on the firm's choice of the best omni‐channel strategies considering demand segmentation, cost structure, and, more importantly, the inventory rationing ability of the firm. We formulate our problem as a two‐stage stochastic programming model and use first‐order optimality conditions to study the optimal inventory ordering decisions. Based on different omni‐channel strategy decisions, we explore four supply chain design options. We identify the optimal inventory ordering policy under each option and explicitly describe the optimality conditions on cost and demand under perfect and imperfect demand information. When the demand information is imperfect, the demand fulfillment decisions can be characterized as nested protection‐level policies. First, we show that omni‐channel strategies are not necessarily profitable under all settings as dictated by market conditions. Second, we demonstrate that when the company can allocate its inventory perfectly, running omni‐channel strategies may help better serve web‐based customers and in‐store customers. Finally, we show that, in the worst case, the imperfect demand information may result in losing all the claimed inventory integration benefits when running omni‐channel strategies.

Sustainable supply chain design under correlated uncertainty in energy and carbon prices

This paper aims to provide an improvement in the modeling of supply chain designs by incorporating correlated uncertainty among multiple parameters, resulting in a more resilient design. A new methodology to generate forecasts for historically correlated time series, regardless of their underlying probability distributions, is presented and applied to generate scenarios for energy and carbon prices, which historically proved to be correlated. These scenarios are then used in a stochastic computation to obtain a three-echelon supply chain design in Europe maximizing the economic performance. The emissions were monetarized through the incorporation of the European Union cap-and-trade emissions trading system into the model. The social impact of the supply chain network is measured in terms of the direct, indirect and induced jobs it creates, which are proportional to the economic performance. By combining the developed methodology with data mining algorithms, a reduction in the number of required scenarios by more than 90% was achieved. The numerical case study moreover shows that the stochastic design ensures an average reduction of emissions by more than 3 ktons compared to the use of a deterministic approach. In comparison, the computation of a stochastic supply chain design without parameter correlation takes 5 times longer.

A Decision Support Software Application for the Design of Agrophotovoltaic Systems in Republic of Korea

Agrophotovoltaic (APV) systems produce both solar energy and crops, so they are considered a sustainable alternative to traditional solar power plants, which can potentially destroy farmlands. However, it is challenging to diffuse APV systems because of their high installation and operating costs. Thus, to resolve the issue by maximizing the productivity and profits of an APV system, this study aims to propose a mobile-phone-based decision support system (DSS) for a supply chain network design for APV systems in South Korea using satellite imagery incorporating geographic information system (GIS) data. Particularly, polynomial regression models estimating annual corn (Zea mays) yields and the predicted generation of electricity were developed and integrated with the proposed DSS. Field experiment data provided by the APV system at Jeollanamdo Agricultural Research and Extension Services in South Korea were utilized. Two photovoltaic (PV) module types (mono-facial and bi-facial) and three different shading ratios for APV systems (21.3%, 25.6%, and 32.0%) were considered design factors for APV systems. An optimal network structure of 6 candidate APV systems and 15 agricultural markets was devised using the generalized reduced gradient (GRG) method. The profits of the six candidate APV systems are mainly affected by the transportation costs to the markets and the policy of the electricity selling prices. As a result, the proposed supply chain design framework successfully identifies an APV system network with maximum profits from crop production as well as electricity generation.

Integrating pre and post-disaster activities for designing an equitable humanitarian relief supply chain

The design of an efficient humanitarian relief supply chain (HRSC) for disaster management depends on the integration of pre- and post-disaster decisions, which reduces the suffering of the victims and saves lives. The use of strategies such as quantity flexibility contracts in the pre-disaster phase and evacuation management in the post-disaster phase significantly increase the efficiency of HRSCs for disaster management. Therefore, in this paper, for the first time, a comprehensive two-stage stochastic mixed-integer linear programming model is presented for integrating the pre- and post-disaster activities for possible disasters such as floods and earthquakes by considering quantity flexibility contract and equitable relief goods distribution. In addition, the proposed model determines the location of warehouses and inventory levels in these warehouses in the pre-disaster phase. It also deals with public donations and budget planning, planning vehicles and helicopters, locating hospitals and shelters, and optimizing the inventory flow between echelons in the post-disaster phase. In the proposed model, the quantity flexibility contract is applied to decrease the inventory level in the pre-disaster phase, and reduce the supply risk in the post-disaster phase. The efficiency and performance of the proposed model are evaluated using the data related to a possible earthquake in Karaj (one of the metropolises of Iran).

Research on the Application of Blockchain Technology in the Design of Analgesic Drug Supply Chain

The supply chain of analgesic drugs has many circulation links and trading levels, and the trading channels are complex; Information asymmetry and low logistics efficiency; Wholesale links account for a large proportion of costs. Too many trading links and complicated trading channels make the trading information asymmetric, opaque and disorderly, which will inevitably lead to the loss of efficiency and benefit in the circulation process. In this paper, the application of blockchain technology in the design of analgesic drug supply chain is studied. The analgesic drug data management center is maintained by the pharmaceutical enterprises themselves or the third party, which is mainly responsible for distributing the unique identification code of drugs, backing up all records of the whole cycle of drug production, storage, circulation and sales, and realizing the two-way traceability function of drugs. In the production process, pharmaceutical enterprises attach electronic labels from single products and outer packaging boxes to realize the traceability and anti-counterfeiting of drugs throughout their life cycle. Correspondingly, it also integrates the advantages and disadvantages of self-management and outsourcing. At this stage, enterprises can choose to subcontract non-core logistics business first, so that enterprises can focus on their core business and avoid wasting too much money and energy in logistics.

Antecedents and outcomes of supply chain resilience: Integrating dynamic capabilities and relational perspective

AbstractThis paper integrates a theoretical framework based on dynamic capabilities and relational perspective to provide a comprehensive understanding of the antecedents and outcomes of supply chain resilience. First, it discusses the antecedents of supply chain resilience and the internal relationships among antecedents combining dynamic capabilities and relational perspective. Second, it discusses the mechanism of supply chain resilience on sustainable operational performance (sustainable market performance and sustainable quality performance). Finally, based on organizational information processing theory, it proposes and explores the moderating effects of supply side disruption, facility disruption and catastrophic disruption on the relationship between supply chain resilience and sustainable operational performance. The conclusions enrich and develop the antecedents and outcomes of supply chain resilience, reveal the influencing factors of supply chain resilience from dynamic capabilities and relational perspective, and reveal the value of supply chain resilience to operational performance from the perspective of sustainability, providing a breakthrough for disruption mitigation strategies and enhance the confidence of managers in designing supply chain resilience; supply chain disruption types are included in the outcomes framework of supply chain resilience, which further provides theoretical guidance for enterprises to quickly recover normal operation from supply chain disruption shocks.

Model‐based systems engineering approaches to chemicals and materials manufacturing

AbstractModel‐based systems engineering (MBSE) is part of a long‐term trend toward model‐centric approaches adopted by many engineering disciplines. We establish the need of an MBSE approach by reviewing the importance, complexity, and vulnerability of the U.S. chemical supply chains. We discuss the origins, work processes, modeling approaches, and supporting tools of the systems engineering discipline (SE) and discuss limitations of the Process Systems Engineering (PSE) framework. We make the case for MBSE as a more generalizable approach. We introduce systems modeling strategies for MBSE, and a novel MBSE method that supports the automation tailored and extended to support the analysis of chemical supply chains. We demonstrate a specific use case of this method by creating a systems model for the manufacturing of an active pharmaceutical ingredient, Atropine. We conclude with a prospectus on developmental opportunities for extracting greater benefit from MBSE in the design and management of chemical supply chains.

Rearticulating supply chain design and operation principles to mitigate uncertainty in the Norwegian engineer-to-order shipbuilding sector

Engineering-to-order (ETO) systems are especially prone to high levels of uncertainty in demand, as well as from internal processes, supply side sources and their own control systems. Understanding and categorising the causes of uncertainty provides an opportunity for organisations to determine the principles and tactics for their mitigation. Previous scholars have developed a framework for ETO uncertainty reduction by the extension of the established ‘FORRIDGE’ principles from general manufacturing management. Although such a framework is claimed to be generic, it has only previously been applied in the UK construction industry. The aim of this paper is to determine—via a replication study—the reproducibility, reliability and validity of the ETO uncertainty reduction framework and extend it. A conceptual replication research study was undertaken involving a different population sample: the Norwegian shipbuilding sector. Based on previous research, we categorise ETO into two forms: innovate to order (ITO) and redesign to order (RTO). Targeting 10 Norwegian first-tier ship equipment manufacturers, the respondents were questioned regarding their sources of uncertainty and measures they adopted to mitigate these. Supply chain tactics for shipbuilding have been identified and mapped against the ETO uncertainty reduction principles and uncertainty sources for RTO and ITO types of ETO. Our study has highlighted the reliability of the FORRIDGE principles. We extend the original set of tactics established in the construction sector so that the ETO uncertainty reduction principles can be used in another sector, and we indicate the significance of different tactics for ITO and RTO types of ETO. We make a methodological contribution by showing the application of a conceptual replication research design in an operations management context. Further research is required to test the principles in other ETO-intensive sectors.