Research team develops pandemic-resilient supply chain model
A Mizzou Engineering team has developed a model that manufacturers can use to operate more strategically and efficiently during global pandemics. Associate Professor Ron McGarvey and PhD candidate Mohamed Salama in the Industrial and Manufacturing Systems Engineering Department outlined the proposal for a resilient supply chain during a global pandemic in the International Journal of Production Research.
“In this study, we’re considering the impact of disruptions to the workforce and facilities and transportation links within the supply chain,” said McGarvey, who has a joint appointment in the Truman School of Public Affairs. “We’re trying to address tradeoffs between two considerations. One is you want the supply chain to try to satisfy demand to the maximum extent possible while at the same time manage the risks that your workforce is exposed to.”
Within a supply chain, there are multiple echelons, such as facilities producing low-level components and also intermediate assembly plants. If any one of those sites were to go offline because of workforce shortages, it could cause a bottleneck in the entire process. For instance, a plant that assembles transmissions for automobiles is dependent on other plants that manufacture gears and driveshafts, which in turn are dependent on locations that produces bolts and washers.
“In each echelon, a company has a set of choices to make,” McGarvey said. “Who do we want to partner with and where are the facilities located? If we have four potential suppliers we might use, how do we want to balance between them? To minimize cost, you might choose to order all of your work from the cheapest place, but clearly that starts exposing you to risks if that site experiences a disruption.”
The model addresses future uncertainty by considering 10 different potential pandemic scenarios, , in which the pandemic severity varies across time and space between a level zero, indicating no risk, to level three, indicating full shutdown. A resilient supply chain design could allow for sourcing agreements with suppliers in multiple geographic regions. If one region, such as the United States were severely impacted, the existing agreement with suppliers in another region, such as East Asia, might allow for a temporary increase in parts obtained from overseas. In that case, transportation costs and capacity would be impacted , increasing the exposure risk to a different set of workers.
The model also takes into consideration the type of product being manufactured. While companies still want to meet demand for all consumer products, some items aren’t as critical during a pandemic as other products such as masks and hand sanitizer.
“You want to meet a maximum percentage of demand, but in some cases if you don’t meet it because it’s too risky, it just doesn’t happen,” McGarvey said. “In the case of socially critical products, not meeting demand isn’t acceptable. In that case, it might be more acceptable to prioritize production over economical loss.
“So, what this model allows you to do is, given this set of future pandemic scenarios and given your desired points on that tradeoff, it identifies facilities that should be used, along with transportation options between facilities.”
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