2016 Volume 67 Issue 2 Pages 73-82
In recent years, supply chain risk management has become a hot research topic for researchers and practitioners. A diamond style supply chain, which is characterized by one parts supplier providing its parts to many companies and finally deliver to many assemblers, was identified in the manufacturing industry in Japan after the March 11 disaster in 2011, To prevent indirect loss from the supply chain disruption, Japanese companies are now collecting information of the supplier's supplier, so as to enable visualization of the physical flow of materials in the supply chain. In this research, we propose a method which we call the Supply Chain Visualization System (SCVS), which enables visualization of the supply network and validation of the usefulness of the method through roleplaying experiments using a simple three stages simple supply chain. Through the experiments, we found that the down stream companies in the supply chain are able to increase profits utilizing the SCVS as the result of proper decisionmaking regarding procurement. Interestingly, those companies that believed they do not have relationship with the disrupted company also reported an increase in profit. They benefited from the agile response of the final product assembler to the supply chain disruption, which assures continuous operation. Therefore, all suppliers except the disrupted supplier were able to continue production and maintain profitability. Furthermore, to mitigate supply chain disruption risks, three strategies, such as redundancy, robustness and flexibility, and two combinations of the three strategies were tested in three different business environments. We found that the strategy that enhances system redundancy (increased safety stock level) is not the best option under some system condition such as the conditions set in this research. From the simulation, we concluded that the best strategy to mitigate supply chain disruption depends on the system conditions.
