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Summary

Behzad Behdani

Handling Disruptions in Supply Chains: An Integrated Framework and an Agent-based Model

The management of supply chains has been transformed by new business trends in the last two

decades. Globalization, outsourcing and Just-in-time delivery are examples of these trends. On the

one side, these trends in the supply chain management have brought substantial benefit in cost

reductions and improved competiveness. On the other side, supply chains have become more

vulnerable to potential disruptions. Companies are not just facing more risk factors in a long

globalized supply network, but the consequences of potential disruptions are also increasingly

severe, as the impact of an initiating event propagates faster through the network due to lower buffer

stocks and fragmentation of control in the value chain.

To cope with this increased vulnerability, companies need to actively manage (the risk of) disruptive

events in their supply chains. This calls for systematic frameworks to guide their efforts. Without

such frameworks, people have to rely only on their personal experience to manage disruptions.

Besides, due to the complexity of todays global supply chains, decision making tools are needed to

provide support in different stages of the supply chain disruption management process. This study is

conducted to address these issues.

- An integrated framework for managing disruptions in supply chains

In the supply chain management literature, handling supply chain disruptions is discussed from twodifferent perspectives. One is the pre-disruption or preventive perspective which focuses on pro-

active measures to avoid possible disruptions or to minimize the exposure to their potential impact.

The other perspective is the post-disruption or re-active perspective which defines what must be done

after a disruption has materialized in the real world. To systematically manage supply chain

disruptions, both perspectives are important and must be considered together in a comprehensive

process. Nevertheless, the literature illustrates few contributions actually emphasizing the need for

such a comprehensive integrated framework including both the pre- and post-disruption perspective.

Whereas these present compelling evidence of their benefit for specific cases, a generic framework

that incorporates both views and details the pre- and post-disruption steps and their inter-relations

was found to be lacking in the literature. It is this gap that the work presented in this thesis has

sought to fill.

The framework developed in this dissertation called InForMDRiSC (Integrated Framework for

Managing Disruption Risks in Supply Chains) describes the steps in handling disruptions in two

interconnected cycles (see Figure 1): the Risk Management Cycle which is about pre-disruption steps

and the Disruption Management Cycle which describes post-disruption steps in handling supply

chain disruptions. InForMDRiSC has been developed based on the available frameworks in the

literature and evaluated by domain experts in industry and academia. To make the framework

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operational, each step including supporting tools have been described in detail based on the existing

literature on supply chain risk/disruption management. In the analysis of literature, the majority of

contributions were found to focus on the pre-disruption steps, with different levels of attention for

different steps of the risk management cycle. Some steps, such as risk identification and risk

treatment, have been explored extensively while risk monitoring and risk quantification have been

given far less attention. This implies that, in making the integrated framework operational, some

steps could be detailed on the basis of literature available, whereas other steps need to be filled in,

building on practices and tools developed in related fields. Moreover, whereas some modeling and

simulation tools are presented to support decision making in the risk management cycle (pre-

disruption), the application of modeling and simulation for post-disruption management process has

not been addressed adequately in the existing literature. Besides, tools to support all steps in the

whole integrated process are lacking. To close this gap, a modeling and simulation framework was

developed and its application to supports relevant steps of InForMDRiSC was discussed in the rest of

this thesis.

Figure 1. The structure of the Integrated Framework for Managing Disruption Risks in

Supply Chains (InForMDRiSC)- An agent-based modeling framework for managing disruptions in supply chains

Making decisions in different steps of InForMDRiSC needs flexible simulation frameworks enabling

decision makers to explore a range of what-if scenarios and experiment with different disruption

management strategies. To develop a simulation framework, we started by choosing an appropriate

simulation paradigm. To this aim, a supply chain was characterized as a complex socio-technical

system. Following, Agent-based Modeling (ABM) has been chosen as the preferred simulation

approach which is best equipped to capture both the technical and social complexity (and theirinterrelations) of global supply chains. In addition, it provides the greatest flexibility in

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experimenting with different settings in a disruption management problem. To develop an agent-

based modeling framework for supply chain disruption management, next, a conceptual model has

been developed in three steps (Figure 2). Firstly, an agent-based representation of a supply chain was

introduced. The basis for this representation was looking at a supply chain as a socio-technical

system. Thus, the Agent (representing the decision making units in the system) was considered as the

central concept in the social sub-system, responsible for the control and operation of a set of

Technologies (representing the physical components in the system). The existing supply chain

management theories were also utilized to specify the main factors describing the structure and

operation of each supply chain. In the second step, a conceptual model of supply chain disruption

was formalized. Finally, we described how different disruption management practices can be defined

and implemented in the model. With these three steps a conceptual modeling framework for

disruption management in supply chains has been presented. The concepts in the conceptual

framework were encoded in Java programming language. A set of generic objects has been

developed which can be customized for specific cases by sub-classing and composing instances.

The application of this modeling framework is demonstrated and discussed in this thesis for the

specific case of a lube oil supply chain. Next, we showed how the simulation model developed can

be used to support decision making in different steps of InForMDRiSC.

Figure 2. The steps in developing the supply chain disruption modeling framework- Concluding remarks

The overall purpose of this thesis has been to provide support for handling supply chain disruptions.

To this aim, an integrated process and a simulation framework have been presented and discussed.

These two contributions are, in fact, complementary means for supply chain disruption management

forming a simulation-based integrated framework for handling disruptions in supply chains. Each

of these two can also be used separately and independently. On the one hand, even if we do not use

the simulation framework, InForMDRiSC can be considered as a process for disruption management.

On the other hand, the modeling framework can also be utilized independently to design simulation

models and experiment with different factors which influence normal supply chain operation and can

be manipulated to prevent or recover from supply chain disruptions. To further facilitate the

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application of InForMDRiSC and modeling framework in industrial cases, directions for future

research including organizational studies on integrating the pre- and post-disruption management

processes have been also discussed in this thesis.