Analyzing supply chain vulnerability through simulation

Abstract

Supply chain vulnerabilities have attracted little research attention despite being recognized as an important issue. To provide further insights into this issue, this chapter uses a simulation approach for analyzing supply chain vulnerability. Specifically, simulations are used to gain additional insights into multiechelon supply chains and the impact of supply disruptions. This study employs an integrated literature review of supply chain vulnerability and risk management and a discrete-event-simulation. The presented framework and simulation models provide important information about the feasibility of using a simulation for analyzing supply chain vulnerability. The results of this study suggest that supply chain vulnerability depends on both the complexity of the supply chain as well as the disruption risks inherent in it. To gain a more holistic view of an entire supply chain system, it is imperative to use proper tools to analyze vulnerabilities. Simulations can be used to model both the system complexity and the different levels of operation holistically and gain insights into managing supply chain vulnerability. By analyzing supply chain vulnerability, managers can ground their decisions in a more holistic understanding of the issue.