| Concerns about international terrorism have heightened awareness of the problem of supply chain robustness. However, while terrorist activities are particularly newsworthy, other sources of risk, such as natural disasters and political/economic shocks, may present a more pressing challenge to supply chain managers. It is clear that preparation for and management of major disruptive events is a critical part of supply chain management.;In the first phase of my Ph.D. research, I used a generic model of supply chain structure to study generic strategies for protecting supply chains against catastrophic disruptions. In this work, I considered a single final assembly facility fed by an arborescent network of supplier and assumed that the objective is to minimize the sum of the expected inventory and/or capacity protection cost and the expected cost of lost revenues from a failure. By decoupling the policies for addressing the risk of such failures from the policies for dealing with routine variability, I represented the basic tradeoffs in simple terms and showed that the optimal policy has well-defined structural features in some instances.;Supply chain disruptions can lead to both tactical (e.g., loss of short term sales) and strategic (e.g., loss of long term market share) consequences. More recently, I have been focusing on the distinction between short-term tactical costs and long-term strategic consequences of supply chain disruptions. To do this, I developed a framework for considering both types of risks, which makes use of basic inventory models to help calculate short-term costs and relies on a game theoretic model to analyze long-term market share impacts.;Overall, I have presented comprehensive modeling frameworks with which to evaluate and mitigate risks to a company from supply chain disruptions, and have found that while redundancy policies, using inventory and capacity, can be effective in reducing tactical risk (i.e., loss of sales), strategic risk (i.e., loss of market share) is better addressed via organizational preparation and speed of response in a crisis. |
