Improve supply chain resilience by multi-stage supply chain

Abstract

Due to the global expansion of Company A's supply chain network, it is becoming more vulnerable to many disruptions. These disruptions often incur additional costs; and require time to respond to and recover from these disruptions. The base paper supply chain was identified as the most vulnerable area of the Company A Jurong and South & Southeast Asia Cluster supply chain; and a multi-stage supply chain was proposed to improve the supply chain's resilience. A statistical model was constructed to select the optimal location of the central warehouse for the proposed multi-stage supply chain. After evaluating the resilience to disruptions and the cost effectiveness of supply chains, the multi-stage supply chain with central warehouse in Tanjung Pelepas, Malaysia was found to be overall most resilient and cost effective among all the supply chains. It also incurs a lower additional cost in the event of a disruption such as changes in exchange rates and demand forecast accuracy, fuel price fluctuation, labor cost increase and shipping disruptions. As a result, establishing this multistage supply chain is recommended.