Managing Supply Chain Risk and Vulnerability: Tools and Methods for Supply Chain Decision Makers

236 Pages·2009·4.33 MB·English

by  Jennifer Blackhurst

Managing Supply Chain Risk and Vulnerability
Teresa Wu (cid:2) Jennifer Blackhurst
Editors
Managing Supply Chain Risk
and Vulnerability
Tools and Methods
for Supply Chain Decision Makers
123
Editors
Assoc.Prof.TeresaWu Assoc.Prof.JenniferBlackhurst
DepartmentofIndustrialEngineering DepartmentofLogistics,Operations
IraA.FultonSchoolofEngineering andManagementInformationStudies
ArizonaStateUniversity CollegeofBusiness
P.O.Box875906 IowaStateUniversity
Tempe,AZ85287-5906 Ames,IA50011
USA USA
[email protected] [email protected]
ISBN 978-1-84882-633-5 e-ISBN 978-1-84882-634-2
DOI 10.1007/978-1-84882-634-2
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Contents
1 BookIntroduction ::::::::::::::::::::::::::::::::::::::::::: 1
JenniferBlackhurst,TeresaWu
References..................................................... 5
SectionI UnderstandingandAssessingRiskintheSupplyChain
2 EffectiveManagementofSupplyChains:RisksandPerformance ::: 9
BobRitchie,ClareBrindley
2.1 Introduction.............................................. 9
2.2 SupplyChainRisk ........................................ 10
2.2.1 RiskandUncertainty............................... 10
2.2.2 RiskandOutcomes................................ 12
2.3 SupplyChainRiskManagement............................. 16
2.4 Performance ............................................. 17
2.4.1 PerformanceCriteria............................... 18
2.4.2 RiskandPerformance–Timeframe .................. 19
2.5 PerformanceandRiskMetrics .............................. 20
2.6 Risk-Performance:Sources,ProfilesandDrivers ............... 22
2.7 RiskManagementResponses ............................... 24
2.8 Conclusions.............................................. 26
References..................................................... 26
3 ManagingSupplyChainDisruptions
viaTime-BasedRiskManagement:::::::::::::::::::::::::::::: 29
ManMohanS.Sodhi,ChristopherS.Tang
3.1 Introduction.............................................. 29
3.2 Background.............................................. 30
3.3 Time-BasedRiskManagement.............................. 31
3.3.1 ResponseTimeandImpact ......................... 32
3.3.2 ModelingDisruptionImpactoverTime ............... 33
3.3.3 Time-BasedRiskManagementinPractice............. 35
v
vi Contents
3.4 RiskandRewardConsiderations ............................ 37
3.5 Conclusion............................................... 38
References..................................................... 39
4 PrioritizationofRisksinSupplyChains ::::::::::::::::::::::::: 41
Mohd.NishatFaisal
4.1 Introduction.............................................. 41
4.2 LiteratureReview ......................................... 43
4.2.1 Risk............................................. 43
4.2.2 SupplyChainRiskManagement..................... 44
4.2.3 SupplyChainRiskMitigationStrategies .............. 45
4.3 SupplyChainRisksTaxonomy.............................. 46
4.3.1 RisksinPhysicalSub-Chain ........................ 47
4.3.2 RisksinFinancialSub-Chain........................ 49
4.3.3 RisksinRelationalSub-Chain....................... 49
4.3.4 RisksinInformationalSub-Chain.................... 51
4.4 Methodology............................................. 52
4.4.1 ANumericalApplication .......................... 56
4.5 ConcludingRemarks ...................................... 61
References..................................................... 63
5 AGeneralizedSimulationFramework
forResponsiveSupplyNetworkManagement :::::::::::::::::::: 67
JinDong,WeiWang,TeresaWu
5.1 Introduction.............................................. 67
5.2 ReviewofSupplyChainSimulation.......................... 68
5.3 GBSE:ASupplyChainSimulationEnvironment .............. 70
5.3.1 GBSEArchitecture ................................ 71
5.3.2 GBSEforSupplyChainSimulation .................. 73
5.4 Experiments.............................................. 78
5.4.1 Notation ......................................... 80
5.4.2 ScenarioI:ImpactofDemandForecastAccuracy....... 81
5.4.3 ScenarioII:ImpactofSupplierSelection.............. 83
5.4.4 ScenarioIII:ImpactofDifferentTransportationMode... 83
5.4.5 ScenarioIV:ImpactofQualityUncertainty............ 85
5.5 Conclusion............................................... 87
References..................................................... 87
SectionII DecisionMakingandRiskMitigationintheSupplyChain
6 ModelingofSupplyChainRiskUnderDisruptions
withPerformanceMeasurementandRobustnessAnalysis:::::::::: 91
QiangQiang,AnnaNagurney,JuneDong
6.1 Introduction.............................................. 91
6.2 TheSupplyChainModelwithDisruptionRisks
andRandomDemands..................................... 94
Contents vii
6.2.1 TheBehavioroftheManufacturers................... 97
6.2.2 TheBehavioroftheRetailers ....................... 98
6.2.3 TheMarketEquilibriumConditions ..................100
6.2.4 TheEquilibriumConditionsoftheSupplyChain .......101
6.3 AWeightedSupplyChainPerformanceMeasure...............103
6.3.1 ASupplyChainNetworkPerformanceMeasure........103
6.3.2 SupplyChainRobustnessMeasurement...............104
6.4 Examples................................................105
6.5 SummaryandConclusions .................................109
References.....................................................109
7 TheEffectsofNetworkRelationships
onGlobalSupplyChainVulnerability::::::::::::::::::::::::::: 113
JoseM.Cruz
7.1 Introduction..............................................113
7.2 TheGlobalSupplyChainNetworksModel....................115
7.2.1 TheBehavioroftheManufacturers...................120
7.2.2 TheMulticriteriaDecision-MakingProblem
FacedbyaManufacturer ...........................121
7.2.3 TheOptimalityConditionsofManufacturers...........122
7.2.4 TheBehavioroftheRetailers .......................122
7.2.5 ARetailer’sMulticriteriaDecision-MakingProblem ....123
7.2.6 TheOptimalityConditionsofRetailers ...............124
7.2.7 TheConsumersattheDemandMarkets...............125
7.2.8 TheEquilibriumConditionsoftheNetwork ...........126
7.2.9 Remark..........................................129
7.3 TheSupplyChainNetworkEfficiency
andVulnerabilityMeasures.................................129
7.4 NumericalExamples ......................................131
7.5 ManagerialImplications ...................................137
7.6 Conclusions..............................................138
References.....................................................138
8 AStochasticModelforSupplyChainRiskManagement
UsingConditionalValueatRisk:::::::::::::::::::::::::::::::: 141
MarkGoh,FanwenMeng
8.1 Introduction..............................................141
8.2 AStochasticModelwithConditionalValueatRisk.............143
8.3 SampleAverageApproximationProgram .....................146
8.4 AnIllustrationoftheStochasticModel .......................149
8.5 AWineSupplyChainProblem..............................151
8.6 Conclusion...............................................155
References.....................................................156
viii Contents
9 RiskIntermediationinSupplyChains::::::::::::::::::::::::::: 159
Ying-JuChen,SridharSeshadri
9.1 Introduction..............................................159
9.1.1 RelevantLiterature ................................164
9.2 Model,Assumptions,andAnalysis...........................165
9.2.1 ASingleRetailer..................................166
9.3 MultipleContracts ........................................172
9.4 RiskAversionandChannelStructure.........................174
9.5 ContinuousFormulationandtheOptimalityoftheMenu ........177
9.5.1 ContinuousTypeSpace ............................178
9.5.2 OptimalContractMenuintheContinuousCase ........178
9.6 FutureResearchandConclusion.............................182
References.....................................................184
10 ForecastingandRisk Analysisin Supply ChainManagement:
GARCHProofofConcept::::::::::::::::::::::::::::::::::::: 187
ShoumenDatta,DonP.Graham,NikhilSagar,PatDoody,
ReubenSlone,Olli-PekkaHilmola
10.1 Introduction..............................................187
10.2 SupplyChainManagementandDemandAmplification .........188
10.3 BeerGameandRoleofAdvancedForecastingMethods.........191
10.4 AdvancedStatisticalModels................................194
10.5 TemporaryConclusion.....................................200
References.....................................................201
11 SupplyChainRiskManagement:AnnotationofKnowledge
UsingaSemi-StructuredKnowledgeModel:::::::::::::::::::::: 205
Chun-CheHuang,Tzu-Liang(Bill)Tseng
11.1 Introduction..............................................205
11.2 TheGenerationandRepresentation
ofSemi-StructuredKnowledge..............................208
11.2.1 TheGenerationofSemi-StructuredKnowledge ........208
11.2.2 Semi-StructuredKnowledgeRepresentation ...........211
11.3 AnnotationFrameworkforSupplyChainRisk Management
Knowledge...............................................216
11.4 InteractionofAnnotatedSCRMKnowledgeDocuments
withtheBenchmarkOntology...............................223
11.4.1 ExtractingandMapping............................223
11.4.2 InteractionBetweenSSKandtheBenchmarkOntology .226
11.5 Conclusions..............................................230
References.....................................................231
List of Contributors
JenniferBlackhurst
Departmentof Logistics,OperationsandMISCollegeof Business, Iowa State
University,Ames,IA50011,USA
ClareBrindley
Nottingham Business School, Nottingham Trent University, UK,
e-mail:[email protected]
Ying-JuChen
UniversityofCalifornia,BerkeleyandUniversityofTexas,Austin
JoseM.Cruz
Departmentof Operationsand InformationManagement,Schoolof Business,
UniversityofConnecticut,Storrs,CT06269,e-mail:[email protected]
ShoumenDatta
Engineering Systems Division, Department of Civil and EnvironmentalEn-
gineering, MIT Forum for Supply Chain Innovation,School of Engineering,
MassachusettsInstituteofTechnology,77MassachusettsAvenue,
CambridgeMA02139
JinDong
IBM China Research Lab, ZhongguancunSoftware Park, Beijing 100193,
P.R.China
JuneDong
DepartmentofMarketingandManagement,SchoolofBusiness,StateUniversity
ofNewYorkatOswego,Oswego,NewYork,13126
ix
x ListofContributors
PatDoody
DepartmentofMathematicsandComputing,CentreforInnovationinDistributed
Systems,InstituteofTechnologyTralee,CountyKerry,Ireland
Mohd.NishatFaisal
InstituteofManagementTechnologyDubai,P.O.Box345006,DubaiInternational
AcademicCity,Dubai,UnitedArabEmirates,e-mail:[email protected]
MarkGoh
NUS Business School, The Logistics Institute – Asia Pacific, National Uni-
versity of Singapore, 7 Engineering Drive 1, Singapore 117543, Singapore,
e-mail:[email protected]
DonP.Graham
INNOVEXLLC
Olli-PekkaHilmola
LappeenrantaUniversityofTechnology,KouvolaResearchUnit,Prikaatintie9,
FIN-45100Kouvola,Finland
Chun-CheHuang
Departmentof InformationManagement,NationalChi Nan University,No. 1,
UniversityRoad,Pu-Li,Na-Tau,545,Taiwan,R.O.C.
FanwenMeng
NUS Business School, The Logistics Institute – Asia Pacific, National Uni-
versity of Singapore, 7 Engineering Drive 1, Singapore 117543, Singapore,
e-mail:[email protected]
AnnaNagurney
DepartmentofFinanceandOperationsManagement,IsenbergSchoolofManage-
ment,UniversityofMassachusetts,Amherst,Massachusetts01003
QiangQiang
DepartmentofFinanceandOperationsManagement,IsenbergSchoolofManage-
ment,UniversityofMassachusetts,Amherst,Massachusetts01003
BobRitchie
Lancashire Business School, University of Central Lancashire,
e-mail:[email protected]