Value chain Approach for modelling resilience of tiered supply chain networks

Abstract

Recent advances in network theory has encouraged the supply chain researchers to investigate the resilience of various supply chain network (SCN) topologies. In a typical SCN model, nodes and links represent the firms and their exchange relationships, respectively. A key requirement in such SCN models is accounting for node and link level heterogeneity, which can be used to more realistically represent the intricacies of real world SCNs. However, this requirement remains largely unaddressed in the contemporary literature. Accordingly, this work attempts to customize the standard network theoretic growth models and resilience metrics, to more closely represent the real world SCN characteristics. In particular, the model proposed in this paper accounts for: (1) the evolution of SCNs through fitness based attachment, (2) the tiered nature observed in real world SCNs, (3) the value added process, from upstream to the downstream of a typical supply chain, which captures heterogeneity of nodes at each tier, (4) the heterogeneity in link weights, and (5) the partial functionality, instead of complete omission, of nodes when simulating failures. The simulation results presented indicate that the proposed model, which closely represents the specific heterogeneous features between the individual network constituents, can be effectively utilized to gain valuable insights on resilience characteristics of real world SCNs.