A Quantitative Analysis of Disruption Risk in a Multi-Echelon Supply Chain

30 Pages Posted: 28 Aug 2009 Last revised: 11 Jul 2011

See all articles by Amanda J. Schmitt

Amanda J. Schmitt

MIT Center for Transportation & Logistics

Mahender Singh

Malaysia Institute for Supply Chain Innovation (MISI)

Date Written: July 10, 2011

Abstract

We demonstrate how system resilience can be improved by focusing on a supply chain network as a whole. We analyze inventory placement and back-up methodologies in a multi-echelon network and view their effect on reducing supply chain risk. We focus on risk from both supply disruptions and demand uncertainty and compare their impacts and mitigating strategies. A simulation model developed to capture an actual network for a consumer packaged goods company is used for the analysis. We present analysis and insights for multi-echelon networks and show how network utilization and proactive planning enable reductions in supply chain disruption impact.

Keywords: supply chain disruptions, multi-echelon inventory, simulation, supply chain risk management, resilience

Suggested Citation

Schmitt, Amanda J. and Singh, Mahender, A Quantitative Analysis of Disruption Risk in a Multi-Echelon Supply Chain (July 10, 2011). Available at SSRN: https://ssrn.com/abstract=1463417 or http://dx.doi.org/10.2139/ssrn.1463417

Amanda J. Schmitt (Contact Author)

MIT Center for Transportation & Logistics ( email )

77 Massachusetts Ave., E40
Cambridge, MA 02139
United States

Mahender Singh

Malaysia Institute for Supply Chain Innovation (MISI) ( email )

Persiaran Tebar Layar
Selangor, Shah Alam 40150
Malaysia

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