Replenishment policy based on information sharing to mitigate the severity of supply chain disruption

Replenishment policy based on information sharing to mitigate the severity of supply chain disruption

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Article ID: iaor201525475
Volume: 18
Issue: 1
Start Page Number: 3
End Page Number: 23
Publication Date: Jun 2014
Journal: International Journal of Logistics Systems and Management
Authors: , , ,
Keywords: inventory: order policies, combinatorial optimization, demand
Abstract:

Modern supply chains are attempting to gain competitive advantages in a fiercely competitive marketplace through adopting new initiatives and practices such as lean and just‐in‐time. These initiatives are suitable for a stable world but they could make the supply chain more vulnerable to the external disruptions such as natural and man‐made disasters. This paper aims at studying the dynamics of a disrupted supply chain under a coordination mechanism that is designed to achieve efficiency and resiliency. The proposed procedure relies on establishing a novel replenishment policy based on an information sharing approach to replace traditional policies. In this policy, replenishment orders will be divided into two streams, transmitting both real demand information and required inventory adjustments to the whole supply chain. A simulation model for a four‐echelon supply chain has been considered to evaluate the information sharing policy and to compare it with an order‐up‐to level policy, determining the dynamics of ordering and inventory before and after the disruption. The results showed how the suggested approach was successful in recovering the disrupted supply chain to a stable performance by reducing effects on inventory and ordering patterns.

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