The consumption of goods and services depends heavily the efficiency of supply chains. Effective Supply chains depend upon the efficient interactions among complex networks of organizations. This efficiency of supply chain networks is a function of many factors. These include: the location within and number of the facilities in the network, supplier capacity for each facility in the network, safety inventory levels at each facility in the network as well as failure rate for each facility. All of this interorganizational coordination must be coordinated with customer demand patterns across various regions.
Like any chain, a supply chain is only as strong as its weakest link. Failure along one link of the supply chain affects the ability of the others to function effectively if at all. My research focuses on the failure rate of facilities along supply chains. Such failures may result from natural disasters as well as black swan effects. Black swan effects include unexpected, once-in-a generation events such as the current Coronavirus pandemic.
This research is critical as the knowledge it creates can prepare supply-chain network designers to factor the possibilities of such events into the networks they design. Anticipating failures enables network designers to build contingency actions into their plans to ensure supply chains remain resilient and robust in the face of disasters and to prevent them from collapsing.
There is much to learn in the eventual aftermath of the covid-19 pandemic. I expect and hope that companies will increase their flexible capacity (e.g. increased safety inventory), reduce their product selection, and inshore many of their production capacities from abroad and to redesign their supply chain largely global networks into more robust local supply networks.
Such changes will not be costless financially or in the potential increase in customer order response time. This in turn may result in higher product prices and reduce customer service levels. The main challenge for companies will be to balance the trade-off between the increased cost (due to increased safety inventory and using local labor) against potential savings (due to reduced supply chain disruptions). Another major challenge for government and government agencies in charge of managing such pandemics would be to take a more proactive role in managing the capacity of scarce medical resources (e.g. ventilators, personal protection equipment) during peak hospitalization of pandemic patients. During pandemics, capacity planning must be flexible enough to deal with an evolving environment.
These will affect my future research in three different areas: