Modelling supply risks in interdependent manufacturing systems: A case study

Abstract

This paper proposes a supply-driven inoperability input-output model (SIIM) in analysing risks of manufacturing systems. The approach, derived from the Leontief s input-output model, was previously debated for its implausibility in analysing sectors in an economic system. This paper provides interesting insights in production risk analysis especially that the adoption of SIIM in micro-level systems particularly in manufacturing systems was not yet explored in the current literature. The resemblance of economic systems and manufacturing systems in terms of system components, input-output concept, and component-wise interdependencies makes the approach appealing and highly plausible. Thus, this work adopts SIIM in analysing the impact of supply perturbations in a manufacturing system brought about by natural and man-made disasters, economic shifts, and government policies. An actual case study was carried out in a manufacturing firm in the central Philippines and two scenarios were presented to illustrate the proposed approach. The proposed approach is highly significant for manufacturing and risk practitioners in formulating mitigation policies to achieve a resilient manufacturing system.