Research On Mechanism And Control Of Disruption Risk Propagation In Supply Chain Networks

Supply chain has been evolved into a complex network where some connected agents, including supplier, manufacturer, distributor and retailer and so on, work together in order to transform raw material into finished goods and meet the demand of market. Since there is a close relationship among agents, disruption which one agent is subject to can accumulate, amplify, mutant, and propagate along the supply chain network. As a result, the disruption risk may evolve into a serious crisis. This kind of phenomenon caused by some serious events has seriously affecting supply chain and compels people to pay enough attention to its cause.Recently the relationship between domestic enterprises and oversea ones has been closer. Apparently, one enterprise not only can benefit from supply chain management, but also improve the relevance of risks between it and other enterprise in the practice of supply chain management. The relevance has an important effect on supply chain network because it may become one pathway or mechanism which disruption risks occurred in one agent propagate throughout the supply chain network. How to avoid and control disruption risk propagation has been an issue for Chinese enterprise, and it is critical to study and reveal the mechanism of disruption risk propagation in supply chain.With perspective in the relationship between the structure and function of supply chain system, a method integrating Macro-Structure and Micro-Agent, combing qualitative and quantitative analysis, and combing empirical research with computer simulation is presented in this dissertation. Based on complex network theory, complex adaptive system, network evolving theory and risk management, the paradigm of complex adaptive supply chain network analysis is presented, which is used to study the mechanism of supply chain disruption risk propagation from two aspects including macro-structure and micro-agent. At the aspect of macro-structure, some important models including the evolving model of complex adaptive supply chain network and supply chain disruption risk propagation model are built up. Bases on those models, the dissertation analyzes the propagation speed and the propagation scope of disruption risk in case of different network structure and different initial failed nodes. At the aspect of micro-agent, this dissertation discusses how supply chain agents'behavior affects the disruption risk propagation, and show how the fluctuation of price, supply and demand propagates through the complex adaptive supply chain network. According to these conclusions from aforementioned research, some strategies of disruption risk control have been discussed in the dissertation.All in all, this dissertation focuses on three fundamental, questions: 1). How does risk propagation in complex supply chain network describe and assess? 2).How do disruption risks propagate throughout supply chain network? 3).Are there some simple strategies and rules that control the disruption risk propagation in order to mitigate those risks and reduce the impact of propagation. Those discussed issues contribute to show why supply chain disruption risk propagation must be considered, what supply chain disruption risk propagation is, how we discussed supply chain disruption risk propagation and how we control the supply chain disruption risk propagation. Based on them, a theoretical framework about risk propagation in supply chain is presented, and shows the mechanism of propagation. All of them enrich the theory of supply chain risk management and emergency management, while they do help enterprises to practice in supply chain risk management and emergency management. The main work and conclusions are presented as following:1. The dissertation summarized the existed literatures on studies of supply chain disruption risk propagation and control. This dissertation summarized the basic theory on supply chain disruption risk propagation, including supply chain risk management, complex adaptive system, and propagation dynamics in complex network. Based on these theories, the paradigm of complex adaptive supply chain network analysis is presented. The dissertation presents that adopting the paradigm of complex adaptive supply chain network analysis to study supply chain disruption risk are both new trend and new methodology.2. A theoretical framework is presented to study disruption risk propagation in supply chain. According to the framework, the research topic has been presented to answer what supply chain disruption risk propagation is. And then, this dissertation analyzes the supply chain vulnerability to answer why supply chain disruption risk propagation must be considered. Especially, the paradigm of complex adaptive supply chain network analysis is presented to answer how we study supply chain disruption risk propagation and some strategies have been discussed to answer how we control the supply chain disruption risk propagation.3. Studies on the dynamics of structure of disruption risk propagation in supply chain. Based on the paradigm, some characteristics of supply chain disruption risk propagation have been presented, and then a complex adaptive supply chain network is established. The dissertation focuses on how a single disruption event propagates throughout supply chain network, and analyzes the propagation speed and the propagation scope of disruption risk in case of different network structure and different initial failed nodes through computer simulation. Some features of supply chain disruption risk propagation are obtained by contrasting and analyzing four kinds of network topology. As a conclusion, the propagation speed and the propagation scope of disruption risk is related closely to network topology and the function of the initial failed node. Especially, it is more harmful for one hub that has been an initial failed than for one average node that does at disruption risk in supply chain network. It is important to prevent and control supply chain disruption risk propagation.4. Studies on how supply chain agents' behavior affects the disruption risk propagation. With perspective in supply chain disruption risk propagation, supply chain agents' decision behavior is regarded as a Stackelberg game. Based on the paradigm, the dissertation discusses the relationship between supply chain disruption risk propagation and supply chain agents' decision behavior such as pricing, ordering, demand fluctuation and profit optimization. And then, the mechanism of propagation in terms of micro-agent is presented. As a conclusion, the study shows that one agent's price change, supply fluctuation and demand fluctuation can spread throughout supply chain network, which causes other agents'pricing, supply and demand to fluctuate accordingly.5. Control strategies for disruption risk propagation in supply chain have been studied. The dissertation presents some control strategies for disruption risk propagation from two perspectives including control level and time. Those strategies are divided into four types, and one strategy each type is discussed. By simulation and case study, those strategies which can mitigate the negative impact are proved to be effective.The innovative points of this dissertation are as following:1. A theoretical framework is presented to study disruption risk propagation in supply chain. There have been a lot of literatures to study supply chain risk management with perspective in static analysis, but few literatures focus on the dynamic of supply chain risk such as disruption risk propagation. As a result, it is a new agenda for supply chain risk management. The dissertation not only presents a theoretical framework to study the mechanism of propagation but also studies how to control it so as to answer what supply chain disruption risk propagation is, why supply chain disruption risk propagation must be considered, how we discussed supply chain disruption risk propagation and how we control the supply chain disruption risk propagation.. It is an obvious innovation to study supply chain risk.2. Complex adaptive supply chain network model and the dynamics of supply chain disruption risk propagation are modeled. The dissertation presents creatively a super-network about disruption risk propagation in supply chain, and focuses on how a single disruption event propagates throughout supply chain network. And then a complex adaptive supply chain evolving network model and a dynamics model of disruption risk propagation are proposed. Based on them, the dissertation discusses the propagation speed and the propagation scope of disruption risk in case of different network structure and different initial failed nodes. The mechanism of supply chain disruption risk propagation is obtained by contrasting and analyzing different network topology. As a result, the mechanism of propagation which enriches supply chain risk management is uncovered from the perspective of macro-structure, and shows that it is a new perspective in studying the supply chain risk management to adopt complex network theory.3. Quantitatively studies on the mechanism of supply chain disruption risk propagation from perspective in supply chain agent's behavior. Most studies on supply chain risk control are prone to qualitative analysis up to now. Based on the paradigm of complex adaptive supply chain network analysis, the dissertation discusses quantitatively the relationship between disruption risk propagation and supply chain agents' behavior such as pricing decision, ordering decision, demand fluctuation and profit optimization and so on. As a conclusion, the mechanism of supply chain risk propagation is presented from perspective in micro-agent. Although there are still some deficiencies in the study, it is an important first step on exploring the mechanism of supply chain risk propagation.4. Effective and practical control strategies for disruption risk propagation in supply chain have been studied. A qualitative analysis method is usually used to study on supply chain risk control in most literatures. As a result, some conclusions from different literatures are even conflictive to some extent and there are short of practical values. The dissertation presents some control strategies for disruption risk propagation from two perspectives including control level and time. Those strategies are divided into four types, and one strategy each type is discussed. By simulation and case study, those strategies which can mitigate the negative impact are proved to be effective and practical.It is an obvious innovation of research contents and research method about supply chain risk management.