Dynamic supply chain risk management plans for mitigating the impacts of the COVID-19 pandemic

Abstract

COVID-19 pandemic prompted supply chain (SC) disruptions and heightened demand for crucial items like facemasks and ventilators. Lockdowns and border closures hindered raw material supply and manufacturing capacity expansion. Consequently, manufacturers faced challenges in inventory, transport, and delivery, resulting in higher shortage costs, elevated SC expenses, and reduced SC efficacy. Using an integrated agent-based model (ABM) and optimisation, this paper examines COVID-19's multifaceted impacts on facemask SCs. It assesses four primary resilience strategies: enhancing manufacturing capacity, improving raw material supply, increasing transportation and distribution facilities, and maintaining dynamic inventory policy. Moreover, the model tested the proposed strategies under different scenarios by optimising the inventory policy and transportation strategies, leading to improved facemask production and delivery during extreme events. Our study found that increased production capacity through an optimal inventory and transportation strategy for a long period reduced the multiple impacts of the pandemic on facemask SCs, resulting in diminished total SC costs and increased consumer access to finished products. Based on demand forecasts, maintaining dynamically optimal reordering points and order up to levels can help maximise raw material supply and inventory levels, thereby minimising risks. Using these findings, future risks related to outbreaks and pandemics can be more effectively planned.

KEYWORDS:

• Risk management
• supply chain
• large-scale disruption
• resilience
• agent-based model

Disclosure statement

No potential conflict of interest was reported by the author(s).

Ethical approval

This article does not contain any studies with human participants or animals performed by any of the authors.

Data availability statement

The authors confirm that the data supporting the findings of this study are available within the article [and/or] its appendices.

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Notes on contributors

Towfique Rahman

Towfique Rahman is pursuing a PhD majoring in supply chain management and working as a casual/sessional academic at UTS Business School, University of Technology Sydney (UTS) and Macquarie Business School, Macquarie University, Sydney, Australia. Additionally, he has worked as a research assistant on diverse projects at UTS and Griffith University. He has a bachelor's degree from the Islamic University of Technology (IUT-OIC) and a master's degree from Bangladesh University of Engineering and Technology (BUET). Previously, he worked as a supply chain executive for well-known companies such as MJL Bangladesh Limited, a strategic alliance partner of ExxonMobil. Rahman has an impressive publication record, with numerous articles published in esteemed international journals, including the International Journal of Production Research, Journal of Cleaner Production, Computers & Industrial Engineering, Energy, Production Planning & Control, Annals of Operations Research and many more. He works as a reviewer for renowned international journals, such as the Journal of Cleaner Production and the International Journal of Production Research. Rahman's scholarly contributions have been well-received and have garnered significant citations. His research interests focus on resilient and sustainable supply chain management, supply chain risk management, energy-efficient supply chain, logistics, industry 4.0, circular economy, simulation, and supply chain network optimisation.

Sanjoy Kumar Paul

Sanjoy Kumar Paul is an associate professor of Operations and Supply Chain Management at the UTS Business School, University of Technology Sydney, Sydney, Australia. Sanjoy's research interests include supply chain risk management, resilience, and sustainability, applied operations research, modeling and simulation, and intelligent decision-making. Sanjoy has published more than 120 articles in top-tier journals and conferences, including the European Journal of Operational Research, Transportation Research Part E: Logistics and Transportation Review, International Journal of Production Economics, Journal of Business Research, International Journal of Production Research, Computers and Operations Research, Computers & Industrial Engineering, International Journal of Logistics Management, Business Strategy and the Environment, Journal of Cleaner Production, and Annals of Operations Research, among many others. He is also an associate editor, area editor, editorial board member, and active reviewer of several reputed journals. Sanjoy has successfully secured external grants from the Department of Defence, Department of Industry, Science, Energy and Resources, Department of Foreign Affairs and Trade, and Meat and Livestock Australia Limited. Sanjoy has received several awards in his career, including ASOR Rising Star Award from the Australian Society for Operations Research, Excellence in Early Career Research Award from UTS Business School, the Stephen Fester prize for most outstanding thesis from UNSW, and high impact publications awards for publishing articles in top-tier journals. Based on his citation records in 2020 and 2021, he was included in the top 2% of scientists in author databases of standardized citation indicators.

Nagesh Shukla

Nagesh Shukla is working on the digital supply chain, transportation, and logistics management (using explainable AI, IoT, simulation modelling and Edge AI). He is leading Logistics and Supply Chain Management Discipline at the School of Business Strategy and Innovation at Griffith Business School. He received his PhD from the University of Warwick (UK) and a bachelor's degree (Manufacturing Engineering) from the National Institute of Foundry and Forge Technology (INDIA). He leads the NVIDIA-supported TechSCS Lab (Technology for Supply Chain Sustainability Lab) at the School of Business Strategy and Innovation. The main aim of TechSCS lab is to fill the gap between technological advancements and business adoption of these technologies sustainably and innovatively. His lab develops teaching demos and prototypes for teaching, research and commercialization. Dr Shukla's research focuses on the development of (i) innovative AI models and applications for transport and logistics, (ii) digital transformation of supply chain and logistics, and (iii) data-driven decision support systems.

Renu Agarwal

Renu Agarwal is a Professor in Management at the UTS Business School with expertise in strategic, operations and supply chain management. Dr. Agarwal provides leadership in the disciplinary fields of service innovation, service value networks, supply chain management, dynamic capability building, management practices, management education, innovation and productivity, and policy making. In addition, she has been a lead investigator of several government and industry research projects on sustainable supply chain management, supplier relationship management, supply chain innovation, management practices, and Australian leadership capability standard projects and many more. Renu has published in top tier international journals which include the Decision Sciences, International Journal of Production Economics, International Journal of Operations and Production Management, International Journal of Production Research, Supply Chain Management: An International Journal, International Journal of Logistics Management, Journal of Cleaner Production amongst many. Renu has been the lead editor of several edited books: The Handbook of Service Innovation, the Global Value Chains, Flexibility and Sustainability edited book published by Springer, the Routledge Companion to Global Value Chains: Reinterpreting and reimagining megatrends in the world economy, and more recently the edited book Innovation, by Routledge.

Firouzeh Taghikhah

Firouzeh Taghikhah is a lecturer in the Discipline of Business Analytics at the University of Sydney Business School. As an early-career researcher, she is dedicated to harnessing the power of data science to further sustainable development goals and create meaningful impacts. Her research expertise lies at the intersection of computational modeling, artificial intelligence, and socio-environmental science. She employs these interdisciplinary skills to inform evidence-based policymaking in various domains, including food resilience, renewable energy, and public health. Her work has been recognized by several peer-reviewed top-tier journals, international awards, and grants, mostly related to applied computing and operational research. In 2023, Firouzeh has been featured as a rising data science star by the Australian Data Science Network. She received her PhD in Analytics from the Faculty of Engineering and Information Technology, University of Technology Sydney.