Supply Risk Research Articles

Understanding climate risk externalities through the global supply chains: a framework and review of the literature on existing approaches

PurposeBusinesses are increasingly vulnerable and exposed to physical climate change risks, which can cascade through local, national and international supply chains. Currently, few methodologies can capture how physical risks impact businesses via the supply chains, yet outside the business literature, methodologies such as sustainability assessments can assess cascading impacts.Design/methodology/approachAdopting a scoping review framework by Arksey and O'Malley (2005) and the PRISMA extension for scoping reviews (PRISMA-ScR), this paper reviews 27 articles that assess climate risk in supply chains.FindingsThe literature on supply chain risks of climate change using quantitative techniques is limited. Our review confirms that no research adopts sustainability assessment methods to assess climate risk at a business-level.Originality/valueAlongside the need to quantify physical risks to businesses is the growing awareness that climate change impacts traverse global supply chains. We review the state of the literature on methodological approaches and identify the opportunities for researchers to use sustainability assessment methods to assess climate risk in the supply chains of an individual business.

Multi-scenario flexible contract coordination for determining the quantity of emergency medical suppliers in public health events.

Determining the optimal number of emergency medical suppliers for the government to contract with in the context of public health events poses a challenging problem. Having too many suppliers can result in increased costs, while having too few suppliers can potentially expose the government to supply risks. Striking the right balance between these two factors is crucial in ensuring efficient and reliable emergency response and management. This study examines the process of determining the appropriate number of suppliers in emergency medical supply chain. By incorporating option contracts and employing the total cost of government procurement as the objective function, the analysis focuses on the impact of relevant parameters on the optimal number of suppliers. Furthermore, the study investigates the optimal supplier quantities under different types of option contracts. The proposed decision model for determining the optimal number of suppliers in this paper considers three key factors: the supply risk associated with emergency medical supplies, the reserve cost of government procurement, and the responsiveness of emergency medical supplies. Additionally, a method is introduced for selecting the quantity of emergency medical suppliers based on flexible contracts. This approach offers a scientific foundation for the government to effectively address the challenge of supplier quantity selection when faced with risks related to shortages, expiration, and the combination of both.

Development of multi-period, multi-product model to mitigate supply risk with capacity constraint and discount

Development of multi-period, multi-product model to mitigate supply risk with capacity constraint and discount

System dynamics analysis of Retailer's emergency strategies when facing irrational demand and supply disruption

Emergency events, such as epidemics, typhoons, and floods, can lead to increased demand instability, resulting in a higher risk of supply–demand imbalances in supply chains. Companies often face challenges in managing irrational demand and supply disruptions due to their limited experience. In this paper, we utilize system dynamics (SD) and susceptible-infected-recovered (SIR) model to examine the phenomenon of irrational consumer demand within the context of supply disruption. Specifically, we focus on analyzing such demand patterns across three external supply scenarios: sufficient, stable, and learning types. Furthermore, we consider emergency strategies (pricing, transshipment, and hybrid) for the retailer based on the consideration of either delayed or non-delayed delivery mechanisms. The results show that the upsurge of irrational demand following an emergency outbreak is usually short term and enormous. A higher level of panic effect leads to increased irrational demand, whereas a stronger conformity effect results in faster increases and declines of such demand during early and later stages, respectively. Furthermore, the emergency strategies should aim to mitigate the negative impacts of the disruption retailer operations and improve the retailer's emergency capabilities. Numerical analysis indicates that the retailer can increase its profit in the sufficient-type external supply scenario by adopting a pricing strategy that incorporates a delayed delivery mechanism. When facing a stable-type scenario, the recommendation is the hybrid strategy. In a learning-type scenario, the retailer should consider using the hybrid strategy with non-delayed delivery as the default option, but use a pricing strategy if delayed delivery is necessary.

Green supplier selection under supply risks using novel integrated fuzzy multi-criteria decision making techniques

Green supplier selection is one of the core business processes in the practice of sustainable supply chains, which enables firms to improve their performance to reduce harmful environmental impacts in all inbound activities. In this challenging and more dynamic business environment, materials supply can suffer from disruptions. This study aims to select suppliers based on environmental aspects by considering supply risks under an uncertain environment. Combined multi-criteria decision-making techniques are developed to address such complexity. Integrated fuzzy Analytical Hierarchy Process-Combined Compromise Solution (Fuzzy AHP-CoCoSo) and Fuzzy Stepwise Weight Assessment Ratio Analysis-Failure Mode and Effects Analysis (Fuzzy SWARA-FMEA) are applied to evaluate suppliers based on green criteria and supply risks. Data Envelopment Analysis (DEA) is used to aggregate the overall score for the final selection. A case study of green supplier selection in a manufacturing company is presented. Extensive analysis is performed to investigate the dependencies of supply risks based on the supplier selection criteria.

Assessing the supply risks of critical metals in China's low-carbon energy transition

The unprecedented low-carbon energy transition has heightened concerns about the security of critical metals (CMs) supplies that are essential for clean energy technologies. As the world's largest consumer and importer, China’s CMs supply may face significant challenges due to geopolitical uncertainties, price volatility, and other dynamics. Here, we introduce a risk-modeling framework to holistically gauge the multifaceted supply risks for 30 CMs embedded in clean energy technology spanning from 2008 to 2020. Our analysis indicates that approximately one-third of CMs supplies grapple with elevated risk, and half of these CMs are associated with electric vehicle manufacturing. These risks stem mainly from significant disruption potential (e.g., lithium and palladium) and substantial import reliance (e.g., nickel and niobium). Although China's overall CMs supply risk has remained relatively stable, the nation has grown increasingly susceptible to disruptions, especially with the surge in clean energy initiatives and associated price hikes. Our detailed analysis of the risk comparison reveals that China's supply risk for nine metals (e.g., copper and chromium) exceeds that of other countries that consume large amounts of CMs. Therefore, by adopting focused strategies related to metals, both governments and industries could benefit from global partnerships, strategic stockpiling, early warning mechanisms and sustainable supply chain management, paving the way for a smooth low-carbon energy transition for China.

Organizational and technological reliability of complex buildings with recourse supply risks modeling

Introduction. In recent days, the resources of a construction project (СP) are limited; therefore, the main tasks of managing the resource supply of construction production (RSСP) are optimal planning of resources and management of material and technical support. This includes managing the resources, supply, inventory management and distribution of resources by type of construction and installation work (CIW).Materials and methods. For a systematic analysis of the functioning of a construction project, organizational and technological subsystems are identified that have the greatest impact on the quality and reliability of construction systems. These include construction scheduling, resource support for construction and estimates that determine the cost characteristics of construction production.Scientific novelty. As a criterion for determining the effectiveness of the construction process, the article proposes to use the organizational and technological reliability (OTR) of complex development, taking into account resource supply. The article examines the factors influencing this criterion, as well as determines the indicators of factors and the interval values of the risk assessment of OTR. The values of the OTR indicator are obtained, which is the probability of completing the project on time, and the classification of factors affecting OTR is supplemented.Results. Contractors and developers provide construction facilities with all necessary resources according to the technological sequence of production of the CIW, established calendar plans and construction schedules. The organisation of complete supplies of resources through enterprises and divisions of production and technological equipment, as well as production and acquisition bases will provide for the redistribution of necessary resources to fulfill the production program between the construction sites of complex development.The novelty of the study lies in the modelling of the organizational and technological reliability of complex development, taking into account the risks of resource supply.Discussion and conclusion. To ensure successful resource provision, it is necessary to take into account the risks and take into account, within the framework of information programming, the organizational and technological reliability of the technological processes of the construction project, taking into account the specific conditions and factors of the implementation of the integrated development project.

Assessing Metal Use and Scarcity Impacts of Vehicle Gliders

This study assesses the metal composition of two vehicle gliders, configured with different equipment levels and evaluates the risk of short and long-term metal scarcity. Entropy analysis is also used for insights on secondary metal recovery strategies. Fifty-five metals are evaluated, with gold, copper, bismuth, lead, molybdenum, and certain rare-earth metals (REMs) subject to the largest supply risks. Differences in equipment levels significantly impact the short-term supply risk for specific metals. Entertainment and communications equipment contain significant amounts of REMs, whereas mirrors and electrical infrastructure contain considerable shares of gold, silver and copper. Some metals are concentrated in a few components while some are dispersed across thousands, impacting recycling opportunities. The broad metal demand of the gliders underscores the automotive industry's role in supply risks for its own manufacturing needs and other societal domains. This emphasizes the significance of comprehensively evaluating metal requirements beyond powertrains for informed resource management.

Island hydrogeology in the tropics: Constraining a 3D variable-density groundwater flow and solute transport model with geophysics

Saltwater intrusion is the greatest risk to coastal community water supplies where they are dependent on fresh groundwater as the main source of supply. For small, fractured bedrock island aquifers, the fresh groundwater lens dynamics and transition zone geometry are complex. This study investigated the impacts of projected increases in groundwater pumping on a fresh groundwater lens to evaluate changes to the lens geometry and localized up-coning from the deeper, more saline aquifers beneath a small bedrock island in the tropics. A combination of traditional hydrogeological datasets and an airborne electromagnetic survey were used to develop a three-dimensional density-dependent groundwater flow and solute transport model using the SEAWAT code. This investigation represents one of very few studies that have taken such an approach. The model was calibrated using observed groundwater hydraulic heads and chloride concentration data, and calculated chloride values based on bulk conductivity measurements determined from inverted geophysical data. A staged calibration approach was adopted, firstly assessing the time-average lens extent and geometry, and secondly considering the seasonal groundwater level response. In the calibration, the geophysical data helped constrain the lens geometry in the absence of hydraulic head and chloride data. The calibrated model was used to test scenarios where groundwater pumping rates were increased above the current demand of 452 m3 d−1, showing that the lens is likely to be stable, i.e., its available storage is not expected to contract excessively, for extraction rates of up to 3,000 m3 d−1. The combined use of geophysical data and a numerical modeling approach was advantageous in investigating the lens characteristics. It also demonstrated how these techniques can be used together to evaluate coastal water resources and to manage water supply risks for coastal communities. The study demonstrated that the freshwater lens can likely support the freshwater demands of the remote community, and is a preferred option compared with high-cost and more complicated options such as seawater desalination and managed aquifer recharge.

Supplier Development under Supply Risk and Reputational Risk

Supplier Development under Supply Risk and Reputational Risk

Recycling potential and development strategies of high-tech metals for low-carbon energy technologies

Low-carbon technology has become the focus of addressing global climate challenges but is facing the supply restriction of critical high-tech metals. Recycling has become a powerful measure to solve this issue. In the paper, a comprehensive recycling potential index (RPI) is constructed to evaluate the recycling potential of high-tech metals for low-carbon energy technologies in China from 2020 to 2050, and development strategies are proposed based on the evaluation results. The results indicate that the future trends of recycling potential show four evolution modes – either reaching or rapidly rising to a high level, increasing to the middle and middle-high level, unsteadily staying at the low and middle-low level, or remaining at a low and continuously decreasing level. According to the evolution trend, different strategies, including key development, reserves, digestion, and transfer, should be adopted in different stages. Co, Li, Dy, Nd, Tb, and Eu should be the focus of technology, funds and policy from both the government and enterprises due to their high recycling potential in the long term. Moreover, measures should be taken to encourage recycling and mitigate the supply risk of high-tech metals for low-carbon energy technologies, including tracking the development of low-carbon energy technologies, adjusting the list of critical high-tech metals, promoting recycling technology, and exploring substitute resources.

A multi-variable service supply management portfolio model for Telecom industry

Supply operations require some kind of classification according to the features of items. Based on the literature review and expert interview, a multi-variable service supply management portfolio model was developed to classify the procurable service items in the Telecom industry in a more realistic way with better precision. First, a multi-level relational reflective model was built based on four dimensions using the fuzzy Delphi method and the model was validated by factor analysis. Then, 50 service items were placed in 16 clusters of the portfolio model. For each category of services in the model, the pertinent supplier relationship management practices were proposed using the literature review accompanied by a focus group. The presented model contributed to the development of previous theoretical trends in supply management portfolio models by introducing a new dimension, called “pace of innovation in technology”, to those extracted from the literature review, such as “strategic importance of the items”, “supply risk”, and “extent of buyer captivity”. Despite the classical models targeting tangible goods and products, our model was customized for the service industry context and can be considered a starting point towards service supply market segmentation procedures according to the attributes of each service item category.

Mining green minerals with the Taliban: Addressing new sourcing risks from Afghanistan in the age of the green transition

For decades, Afghanistan's mineral fortune has fueled imaginaries. Described as holding trillions of dollars in rare earths, copper, lithium, gold, as well as rare gemstones, the country has attracted the attention of mineral dependent industries and jurisdictions. As the green transition away from fossil fuels is under way, ‘green minerals’ deposits hold the potential to recenter Kabul on global supply maps. While lithium and rare earths appear particularly attractive, the Mes Aynak copper deposit is now at the core of China's involvement in Afghanistan to transform the country as a major supplier. In parallel, security issues remain, with significant waves of violence aimed in particular to foreign investors. In this article we argue that the opening of the Afghan's mineral sector will spur new critical supply and reputational risks for corporate actors and is unlikely to significantly benefit a pauperized population. We identify three overarching risks that should be proactively tackled in international corporate risk management, to limit both reputational risks for these companies and favor a trickle down of at least some of the proceeds to the almost 40 million people under the Islamic Emirate's rule.

Pharmacy Compounding Regulation in the German Pharmaceutical Market. Part 1. Basic Regulatory Provisions (Review)

SCIENTIFIC RELEVANCE. There is a need to move towards an appropriate system of quality assurance in pharmacy compounding. At the same time, the development of a Russian regulatory system for pharmacy compounding requires a broad understanding of international experience.AIM. This study aimed at analysing the basic principles of pharmacy compounding regulation in the Federal Republic of Germany in order to identify best practices and determine ways to improve the legal and regulatory framework for compounding pharmacies in the Russian Federation.DISCUSSION. According to German law, pharmacies may dispense compounded medicinal products on an oral request from a patient. The German regulatory framework provides a mechanism delineating medicinal products compounded by pharmacies and those manufactured by pharmaceutical companies. The geographical and quantitative restrictions combined with the neutral pricing policy for pharmacies facilitate the establishment of a highly effective pharmaceutical supply system. In practice, this system helps set uniform prices for medicinal products throughout Germany while preventing pharmacy chains from monopolising the pharmaceutical market. These regulations can be considered regulatory mechanisms operating at the regional (land) level. Moreover, it is of key importance that German legislation divides compounded medicinal products into stock and extemporaneous preparations.CONCLUSIONS. German pharmaceutical practice features a number of innovations that can be borrowed for Russian pharmaceutical practice. Russian pharmaceutical legislation may benefit from adopting the concept of a “request from an individual” for dispensing compounded medicinal products that do not contain prescription-only active pharmaceutical ingredients (APIs). In order to improve the efficiency of the use of pharmaceutical-quality raw materials, including APIs, it is necessary to identify cases in which regular pharmacies can receive or purchase compounded medicinal products from compounding pharmacies and cases in which compounding pharmacies can purchase APIs from other compounding pharmacies. The authors recommend considering the possibility of defining the role, functions, and powers of self-regulating professional pharmacy organisations at various levels of governance in this social sphere of activity. Furthermore, the authors recommend creating a Russian mechanism to mitigate the risks of stock shortages and/or limited supply of medicinal products that would be similar to the German “standard authorisation” system and would encompass compounding pharmacies and pharmaceutical companies.

Virtual land trade and associated risks to food security in China

International trade can help alleviate the scarcity of arable land by importing agricultural and food products. In the context of climate change and socioeconomic development, the patterns in economic and resource flow embodied in the global food trade may be subject to further changes that present risks for economies with scarce land resources, such as China. These conditions exacerbate ongoing food security challenges, yet have so far not been well understood. Here, we combined the environmentally extended multiregional input-output (EE-MRIO) model, Geopolitical Supply Risk (GeoPolRisk) method, and scenario analysis to provide a comprehensive overview of global, virtual land trade patterns caused by China's food consumption and associated virtual land supply risk faced by China. Our results show that, from 1995 to 2015, China has experienced increasing GeoPolRisk of virtual land supply related to food consumption, roughly fivefold, mainly due to growth in total virtual land consumption and changes in trade structure. From 1995 to 2015, total food consumption-related virtual land in China has increased by approximately 35.1%, and the share of foreign land has increased from 6.3% to 43.3%, with the largest land sources shifting from low-income regions (such as Asia and Africa) to more industrialized regions (such as the United States and Australia). Meanwhile, socioeconomic development and dietary changes are the main antecedents to total virtual land consumption, potentially affecting GeoPolRisk. Our results suggest the need for urgent adjustments for a balanced distribution of virtual land sources and to promote healthy dietary transitions and improve agricultural productivity in the future. Our study offers significant information that can guide potential solutions to the sustainable use of land resources and reduce the GeoPolRisk of virtual land trade for decision-makers, thereby facilitating food security.

First economically and environmentally viable mobile commercial metallurgical plant based on advanced hydrometallurgical and electrochemical technologies able to produce cobalt metal from spent lithium-ion batteries

Background To counter climate change, it will be necessary to have a major transition of both energy and mobility systems. Electrification of mobility is one essential part of the solution. Nearly 65% of Cobalt is mined in Africa (e.g. Central African Republic and Democratic Republic of the Congo) and this dependency makes Europe vulnerable. It is essential to develop an efficient and robust technology capable of recycling this kind of waste. Methods Due to the risk of supply and to decrease the dependency of Europe in obtaining Cobalt, the first economically and environmentally viable mobile commercial metallurgical plant based on advanced hydrometallurgical and electrochemical technologies has been constructed (referenced as CROCODILE), which is able to produce cobalt metal from black mass from waste streams of spent batteries. The process validated on a pilot scale is made up of three different sections: leaching, liquid-liquid extraction and electrolysis. The first has the purpose of carrying out a selective leaching for cobalt, the second aims removing impurities from the lye and concentrating it into cobalt and the third concerns the recovery of metallic cobalt. During the intense demonstration campaign carried out, the optimization of the operating parameters of the whole process was carried out. Results From the experimental campaign carried out on the pilot scale, the following process yields were obtained: cobalt leaching 88.4%; maximum extraction of cobalt about equal to 60%; cobalt recovery of 63%wt in electrowinning. Conclusion A novel and innovative process for the recovery of Cobalt from black mass coming from the lithium-ion batteries has been validated at pilot scale. The Cobalt recovery rate and the purity obtained together with the low environmental impact of this process compared to conventional ones can contribute to both a greener future and make Europe independent from other markets such as that of China..

Graphitization: Microstructural and microtextural transformations of residual char from international coal combustion ash

Natural graphite is a critical raw material and its substitution in some applications will contribute to reduce its supply risk. Coal ash, which is still produced in high amounts, contains a carbonaceous solid residue (char) that may be a substitute of natural graphite. For this purpose, char may be graphitized and used in electrocatalysis reactions, however char properties depend on coal rank, composition and combustion conditions that affect the graphitization process. Research on industrial coal char graphitization is limited, resulting in restricted comprehension of the contributing factors. In order to provide novel insights, industrial residual chars (derived from Poland, Portugal, Romania and South Africa) subjected to high-temperature treatments (carbonization at 1000 °C followed by treatment at 2600 °C under environmental pressure) were examined regarding their microstructural and microtextural transformations. The samples were studied by focussing on its heterogeneity, namely its specific properties and interactions, including elemental composition, optical character, and structure. Furthermore, the evolution of structural order of selected char morphotypes in samples derived from coal of similar rank was assessed using Raman microspectroscopy.The results highlighted a set of aspects that could have influenced the transformations experienced by the different chars during high temperature treatments (graphitization). It was found that Hydrogen might play a role in the graphitization ability of isotropic chars derived from low rank coal. The prior preferential orientation of the Basic Structural Units (BSU) contributes to achieve a higher graphitization degree, but it can be enhanced or hindered by other factors, e.g., hydrogen content. Raman microspectroscopy showed that char morphotypes from the same group underwent different transformations during graphitization, indicating that morphotypes or sections with unfused optical character may be more prone to graphitization. However, the existence of disordered domains and specific microtextures, such as polyhedral pores identified under TEM, likely hindered further graphitization. Further research on this topic is needed.

Modelling Binder Degradation in the Thermal Treatment of Spent Lithium-Ion Batteries by Coupling Discrete Element Method and Isoconversional Kinetics

Developing efficient recycling processes with high recycling quotas for the recovery of graphite and other critical raw materials contained in LIBs is essential and prudent. This action holds the potential to substantially diminish the supply risk of raw materials for LIBs and enhance the sustainability of their production. An essential processing step in LIB recycling involves the thermal treatment of black mass to degrade the binder. This step is crucial as it enhances the recycling efficiency in subsequent processes, such as flotation and leaching-based processing. Therefore, this paper introduces a Representative Black Mass Model (RBMM) and develops a computational framework for the simulation of the thermal degradation of polymer-based binders in black mass (BM). The models utilize the discrete element method (DEM) with a coarse-graining (CG) scheme and the isoconversional method to predict binder degradation and the required heat. Thermogravimetric analysis (TGA) of the binder polyvinylidene fluoride (PVDF) is utilized to determine the model parameters. The model simulates a specific thermal treatment case on a laboratory scale and investigates the relationship between the scale factor and heating rate. The findings reveal that, for a particular BM system, a scaling factor of 100 regarding the particle diameter is applicable within a heating rate range of 2 to 22 K/min.

Do blockchain capabilities help overcome supply and operational risks: Insights from firm market returns during COVID-19

Uncertainty and risk have become increasingly prominent issues in firm operating environments. Addressing uncertainties and risks brought by the historically disruptive COVID-19 pandemic crisis requires organizations to establish reliable, visible, and traceable information processing and sharing capabilities. Blockchain is a disruptive technology that can build capabilities to support operational resilience where uncertainty may manifest as risk or opportunity. Using an event study, we examine the COVID-19 pandemic relationship to stock returns for 217 blockchain-related firms—those that develop or apply blockchain technology—over five major pandemic life cycle periods. Our results indicate firms with blockchain capabilities have less mean negative stock price reaction—on average, a reduced 8.24 % shareholder value loss across crisis stages. Different blockchain application fields exhibit varied shareholder value effects—in general, production blockchain applications can help firms reduce more negative impact while financial blockchain applications show no significant mitigation effects. We further demonstrate how blockchain operational characteristics affect stock returns. Overall, blockchain technology provides effective risk buffer capabilities and can help manage shifting institutional fields—which the market views as building resilient capabilities resulting in competitive advantage to overcome known and unknown uncertainties and risks.

Platform pricing and blockchain adoption for capacity sharing with cross-network externality and supply risk

Platform pricing and blockchain adoption for capacity sharing with cross-network externality and supply risk