Role of Distribution Centers Disruptions in New Retail Supply Chain: An Analysis Experiment

Abstract

The convergence of physical stores and e-commerce has led to the emergence of a new retail business mode in the retail industry. In today’s world, new retail supply chains face the potential risks of disruption caused by natural and man-made disasters, and epidemics. In this paper, we simulate a three-stage new retail supply chain consisting of suppliers, manufacturers, and a retailer with online and offline channels in the AnyLogistix simulation and optimization software. We develop a simulation model to analyze the effects of various supply chain node disruptions on new retail supply chain performance and service level with consideration of four scenarios: disruption-free; manufacturer disruption; warehouse center disruption; offline store disruption. The main results show that supply chain node disruptions have negative impacts on the performance and service level. Besides, the warehouse center disruption has the most devastating effect on this new retail supply chain. Overall, this paper provides insights for decision-makers to consider disruption issues when designing resilient new retail supply chains.