Modelling Disruption Management

Supply chains are becoming increasingly competitive in order to meet customer demands. The task of optimizing highly evolved supply chains is not easy, especially when it is particularly sensitive to unexpected disruption. In this research, the researchers in the group (Paul, Hishamuddin, Sarker and Essam) developed real-time recovery mechanisms for (i) a two-stage batch production-inventory system where the production may be disrupted, for a given period of time, either at one or both stages, and (ii) a two stage serial supply chain system, consisting of one manufacturer and one retailer, where the production is disrupted for a given period of time during the production up time. The models are capable of determining the recovery schedule for the involved entities (such as manufacturer and the retailer), and ensuring that the total relevant costs are minimized, while seeking to recover the original schedule by the end of the recovery time window. The models were solved using new heuristics developed in this paper, which performed well in giving quality solutions within reasonable time. The presented model is useful to assist decision makers to take a pro-active approach for maintaining business continuity in the event of a disruption in the supply chain system. Some numerical examples and a real-world case study are presented to explain the benefits of our proposed approach.

Figure: Recovery plan from the multiple disruptions in a two-stage production-inventory system