Model to Assess Supply Chain Resilience

Model to Assess Supply Chain Resilience

J. Vargas D. GonzÁlez 

Department of Engineering, Pontificia Universidad Católica del Perú, Peru

Page: 
282-292
|
DOI: 
https://doi.org/10.2495/SAFE-V6-N2-282-292
Received: 
N/A
|
Accepted: 
N/A
|
Published: 
30 June 2016
| Citation

OPEN ACCESS

Abstract: 

The uncertainty in the current business environment is driven by events such as economic crises, climate change, global terrorism, shortage of resources and so on. This causes traditional supply chain operations models to become obsolete and not able to ensure the sustainability and competitiveness of the organizations. In this context, resilience is defined as the ability of a company/ community/ environment/ people to recover after it has been exposed to an important disturbing event, for instance, a natural disaster as a hurricane hitting the main suppliers, thus creating lack of raw materials in production lines. This article tackles how the assessment of the supply chain resilience, considering this capacity, enables one to be better prepared for an unstable risky environment and the post disaster consequences. We propose a model based on three categories of indicators; the first one is related to achieving an organizational resilience (to assess by results of responsiveness, flexibility and effectiveness), the second one is related to attaining business resilience (to assess by cash-to-cash, days of inventory, days of receivables and days of payables), and the third one is related to having a labour resilience (to assess by labour capabilities to overcome vulnerable living conditions). Two Peruvian supply chain companies (which belong to the food and pharmaceutical sectors) have been studied by using the model; the main results allow concluding that they have a low resilience level, because of their current three-category indicator results.

Keywords: 

agility, business continuity, resilience, supply chain.

  References

[1] Checa, N., Maguire, J. & Barney, J., The new world disorde. Harvard Business Review, 81, pp. 70–79, 2003.

[2] Drucker, P.F., Management Challenges for the 21st Century, Harper Collins Publisher: New York, 1999.

[3] Holling, C.S., An ecologist’s view of the malthusian conflict. In Population, Economic Development and the Environment, ed. K. Lindahl-Kiessling & H. Landderg, New York: Oxford University Press, pp. 79–103, 1994.

[4] Oliver-Smith, A., What is a disaster? In The Angry Earth: Disasters in Anthropological Perspective, ed. A. Oliver-Smith & S. Hoffman, New York: Routledge, pp. 18–34, 1999.

[5] Chen, I.J. & Paulraj, A., Towards a theory of supply chain management: the constructs and measurements. Journal of Operations Management, 22(1), pp. 119–150, 2004. http://dx.doi.org/10.1016/j.jom.2003.12.007

[6] Bennasar, M. & Vuitton, R., Livre Blanc, Résilience des organisations: pourquoi certains survivent et d’autres pas, LexsiPress, https://www.lexsi.com/sites/default/files/ publications/livre_blanc_-_resilience.pdf, 2011.

[7] Martha, J. & Vratimos, E., Creating a just-in-case supply chain for the inevitable next disaster. Mercer Management Journal, 14(1), pp. 70–77, 2002.

[8] Semchi-Levi, D., Snyder, L.V. & Watson, M., Strategies for uncertain times. Supply Chain Management Review, 6(1), pp. 11–12, 2002.

[9] Helferich, O.K. & Cook, R.L., Securing the Supply Chain: Management Report, CLM Publications: Oak Brook, 2002.

[10] Christopher, M. & Lee, H., Mitigating supply chain risk through improved confidence. International Journal of Physical Distribution & Logistics Management, 34(5), pp. 388–396, 2004. http://dx.doi.org/10.1108/09600030410545436

[11] Chopra, S. & Sodhi, M.S., Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review, 46(1), pp. 52–61, 2004.

[12] Sheffi, Y. & Rice Jr. J.B., A Supply chain view of the resilient enterprise. MIT Sloan Management Review, 47(1), pp. 14–48, 2005.

[13] Grossi, P. & Kunreuther, H., Catastrophe Modeling: a New Approach to Managing Risk, Springer-Verlag: NewYork, 2005.

[14] Banks, E., Catastrophic Risk: Analysis and Management, Wiley Finance, 2006.

[15] Reed, J. & Simon, B., Car components hit by Japan aftershock. Financial Times, published on 28-03-2011.

[16] Reed, J. & Simon, B., Japan carmakers’ supply woes hit EU and US. Financial Times, 2011.

[17] Fujita, M. & Nobuaki, H., Japan and economic integration in east asia: post-disaster scenario. The Annals of Regional Science, 48(2), pp. 485–500, 2012. http://dx.doi.org/10.1007/s00168-011-0484-y

[18] Cyrulnik, B., Resilience: How Your Inner Strength Can Set You Free from the Past  Paperback, Tarcher: New York, 2011.

[19] Zsidisin, G.A. & Bob, R., Supply chain risk. International Series in Operations  Research & Management Science, 124(1), New York: Springer, 2008.

[20] A&T, Best Practices : Achieving Resilience – Best Practices in Business Continuity, published on 04-05-2004, available at http://www.bankofengland.co.uk/financialstability/fsc/Documents/ATTBestPractice.pdf

[21] CLSCM, Report: creating resilient supply chains: a practical guide, cranfield school of management, centre for logistics and supply chain management, CLSCM, 2003.

[22] Kirby, J., Supply chain challenges: building relationships. Harvard Business Review, 2003.

[23] Vargas, J., Lauras, M., Dupont, L. & Charles, A., Towards a demand forecast methodology for recurrent disaster. In Disaster Management and Human Health; Reducing Risk, Improving Outcomes, WIT Transactions on the Built Environment, ed. C.A. Brebbia, 133(1), Wessex Institute of Technology Press: UK, 2013.

[24] Vargas, J., Charles, A., Lauras, M. & Dupont, L., Designing realistic scenarios for  disaster management quantitative models. Proceeding of the 11th International Conference on Information Systems for Crisis Response and Management, ISCRAM, Pennsylvania: USA, 2014.

[25] UNDP, United Nations Development Programme. Reducing disaster risk: a challenge for development. A global Report, UN Press: New York, 2004.

[26] D’Ercole, R. & Metzger, P., La vulnérabilité territoriale : une nouvelle approche des risques en milieu urbain. European Journal of Geography, 447(1), 2009. http://dx.doi.org/10.4000/cybergeo.22022

[27] D’Ercole, R., Hardy, S., Metzger, P., Robert, J. & Gluski, P., Les dimensions spatiales et territoriales de la gestion de crise à Lima. Vertigo - La Revue Electronique en Sciences de l’Environnement, 12(1), 2012.

[28] Alinovi, L., Mane, E. & Romano, D., Measuring Household Resilience to Food Insecurity: Application to Palestian Houselhold, FAO Press, pp. 3–10, 2009.

[29] Kang-Yao, Y., Comment développer des supply chain resilientes? Supply Chain Magazine, 2005.

[30] Charles, A., Thesis doctoral. Improving the Design and Management of Agile Supply Chain: Feedback and Application in the Context of Humanitarian Aid, Ecole des Mines d’Albi, Université de Toulouse, 2010.

[31] Charles, A., Lauras, M. & Wassenhove, L.V., A model to define and assess the agility of supply chains: building on humanitarian experience. International Journal of Physical Distribution & Logistics Management, 40(8/9), pp. 722–741, 2010. http://dx.doi.org/10.1108/09600031011079355

[32] De Toni, A. & Tonchia, S., Definitions and linkages between operational and strategic flexibilities. Omega, 33(6), pp. 525–540, 2005. http://dx.doi.org/10.1016/j.omega.2004.07.014

[33] Slack N., The flexibility of manufacturing systems. International Journal of Operations & Production Management, 25(12), pp. 1190–1200, 2005. http://dx.doi.org/10.1108/01443570510633594

[34] Golden, W. & Powell, P., Towards a definition of flexibility: in search of the Holy Grail? Omega, 28(4), pp. 373–384, 2000. http://dx.doi.org/10.1016/S0305-0483(99)00057-2

[35] Vernon, F., Supply chain visibility: lost in translation? Supply Chain Management: An International Journal, 13(3), pp. 180–184, 2008. http://dx.doi.org/10.1108/13598540810871226

[36] SCC, Supply Chain Operations Reference Model 8.0, Technical report, 2006.

[37] Farris II, M.T. & Hutchison, P.D., Cash-to-cash: the new supply chain management metric. International Journal of Physical Distribution & Logistics Management, 32(4), pp. 288–298, 2002. http://dx.doi.org/10.1108/09600030210430651

[38] Randall, W.S. & Farris II, M.T., Supply chain financing: using cash-to-cash variables to strengthen the supply chain. International Journal of Physical Distribution & Logistics Management, 39(8), pp. 669–689, 2009. http://dx.doi.org/10.1108/09600030910996314

[39] Stevens, G.C. & Johnson, M., Integrating the supply chain…25 years on. International Journal of Physical Distribution & Logistics Management, 46(1), pp. 19–42, 2016. http://dx.doi.org/10.1108/IJPDLM-07-2015-0175

[40] Stewart, G., Supply chain performance benchmarking study reveals keys to supply chain excellence. Logistics Information Management, 8(2), pp. 38–45, 1995. http://dx.doi.org/10.1108/09576059510085000

[41] Yin, R., Case Study Research Design and Methods, Sage Press: California, 2009.

[42] WB, World Bank, [23-11-2015], available at http://data.worldbank.org/indicator, 2014. [43] MIDIS, Ministry of Development and Social Inclusion of Peru, [23-11-2015], available at http://www.midis.gob.pe/mapas/infomidis/, 2015.

[44] CEPLAN, Center of Strategic Planning of Peru, [23-11-2015], available at http://www. ceplan.gob.pe/documentos/peru-indicadores mundiales, 2015.

[45] MINCETUR, Ministry of Foreign Trade and Tourism of Peru, [23-11-2015], available at http://www.mincetur.gob.pe/newweb/Default.aspx?tabid=3250, 2015.

[46] DG, Gestión, El 85% de la población peruana tiene acceso al servicio de agua potable, [23-11-2015], available at http://gestion.pe/economia/mvcs-857-poblacion-peruanatieneacceso-al-servicio-agua-potable-2130028, 2015.

[47] DR, La República, El Perú baja dos puestos en educación: del 63 al 65, [23-11-2015], available at http://larepublica.pe/04-12-2013/el-peru-baja-dos-puestos-en-educaciondel-63-al-65, 2015.

[48] P21, Perú 21, El 40% de la red vial nacional aún no está pavimentada, [23-11-2015], available at http://peru21.pe/opinion/40-red-vial-nacional-aun-no-esta-pavimentada-2164527, 2015.

[49] LPP, La Prensa Perú, En el Perú hay un automóvil por cada 14 personas, [23-11-2015], available at http://laprensa.peru.com/economia/noticia-peru-hay-automovil-cada14-personas-4711, 2015.

[50] GFK, Reporte sobre la Seguridad ciudadana en el Perú, [23-11-2015], available at http://es.slideshare.net/GfKPeru/gf-k-enc-opmayo2014seguridadciudadana-4, 2015.

[51] SFP, The Statement of Financial Position 2014, Bolsa de Valores de Lima, available at http://www.bvl.com.pe/jsp/ShowEEFF_new.jsp?Ano=2014&Trimestre =A&Rpj=B30006&RazoSoci=&TipoEEFF=BAL&Tipo1=A&Tipo2=C&Dsc_Correlativo=0000&Secuencia=0, 2014.

[52] ISCR, The IncomeStatement, Bolsa de Valores de Lima, available at available at http://www.bvl.com.pe/jsp/ShowEEFF_new.jsp?Ano=2014&Trimestre =A&Rpj=B30006&RazoSoci=&TipoEEFF=GYP&Tipo1=A&Tipo2=C&Dsc_Correlativo=0000&Secuencia=0, 2014.