Study of supply chain disruptions at a high tech corporation

Abstract

Although supply chain disruptions are inevitable, frameworks have been developed for addressing supply chain risks. These frameworks present methods on mitigating, reducing or managing the risks through different approaches such as multiple sourcing. The research presented here identified two factors that contribute to successful recovery from supply chain disruptions. One factor is efficient communication between stakeholders in a supply chain. The communication needs to be present before a disruption occurs to enable fast detection. After a disruption occurs efficient communications will help minimize confusion and provide clear understanding of the recovery effort between stakeholders. The other factor is the inventory position downstream of the disruption. In particular, the available days of supply downstream from the disruption relative to the length of the disruption are crucial to the ability of a supply chain to recover from the disruption without disturbing the continuity of supply. In response to the effect of the days of supply compared to the recovery time a simple model is developed for assessing supply chain risk for an enterprise that sells products defined through a bill-of-materials.

(cont.) The model takes into consideration the complexity of a product as more parts and more levels are added to the bill of material. The supply chain risk score metric permits comparison across products, companies and industries. The model is simple to apply by analyzing each part in bill-of-materials by a ranking system comparing the recovery time to the days of supply downstream from the disruption. The supply chain risk score is to be used in parallel with other supply chain metrics in order to determine the best approach in reducing risks to an enterprise.