Dual-Sourcing Procurement Strategies Under Supply Chain Disruption Risk

In recent years, due to the emergencies such as natural disasters, terrorist attacks, general strikes and so on, supply chain disruption risk probability is gradually increasing. It is aroused the notification to manufacturing enterprises which is relying on the single supplier. Based on the social and economic globalization, the links between different subjects of supply chain become more closely, but more vulnerable. Any upstream supplier disruptions caused by emergencies will bring heavy influence to the whole supply chain. The core responsibilities of purchasing and supply chain management are not to reduce the cost, but to ensure the continuity and stability of supply chain. Therefore, choosing effective procurement strategies to deal with interruption of supply chain risk is the key to enterprise success, dual-sourcing procurement is better than single-sourcing procurement to adapt the market demand.Procurement is an important process of the supply chain, it is necessary for the company to ensure supply, maintain daily operation and reduce disruption risk. Since 1980 s,due to the rapid development of Internet technology, the e-commerce market gradually become a new trading platform, and increasingly change people’s consumption habits. As the first window of enterprise in the face of market, the procurement mode and channels have been changed deeply due to the development of electronic commerce. The O2 O business model represents B2 B and B2 C model evolutional stage, it is also the necessary step of C2 B model. The O2 O e-commerce procurement creates a new mode of enterprise procurement, through combine the online e-commerce platform with the offline activities to integrate the whole supply chain.O2 O e-commerce market sourcing is a new platform for corporate procurement, but as a new purchasing channel still has some potential risks. The interests conflict between online and offline channels, the trust problems between suppliers and retailers, the butterfly effects of the economic globalization, which will lead to supply disruption and bring a heavy storm to retailers.Considering how to reduce the risk of supply disruptions, based on the research of the procurement strategies under the disruption risk, this paper uses the O2 O procurement as the new purchasing channel, in addition, combine the offline traditional market as the supplement to the online O2 O procurement, then puts forward four different purchasing strategies: temporary remedial procurement, leader-follower purchasing strategy, simultaneous purchasing strategy, option purchasing strategy. In these four procurement strategies, I use the O2 O electricity purchasing platform as the leader supplier, the traditional market as the back-up supplier. This research uses the suppliers disruption risk probability and quantity as basic variables, builds the retailer’s expected revenue function model, and designs the market demand satisfied the uniform distribution, then works the related parameters sensitivity analysis by using Matlab. At last, using the numerical simulation to compare these four different strategies, it is concluded that the option purchasing in the O2 O procurement is the best strategy when dealing with supply chain disruption risk, it can increase the purchasing flexible, and maximize the retailer expected revenue, so can be used effectively to prevent and avoid the interruption risk.