Analyzing The Supply Chain Localization Strategy Of Multi-Enterprises Based On The Super-network Model

The supply chains of multinational enterprises are globally located, which have caused many problems. For example, the fluctuation of currency, risk and natural disasters are threating the global supply chains. The soaring labor cost in developing countries makes the low cost strategy out of work. As the fuel price is increasing rapidly, resulting in higher transportation cost. Therefore, multinational enterprises are focusing on a localized way to operate their supply chains. Supply chain localization strategy has shortened the structure of global supply chain, which decreased the unpredictable risk and cost that arise when crossing districts or countries. Furthermore, supply chain localization strategy enables multinational enterprises to serve the local customers in a more prompt way, reaching a higher delivery performance. However, supply chain localization strategy requires multinational enterprises to take more efforts to change the present way of operation, so they are supposed to find a particular niche between a proper supply chain localization strategy and cost, as well as risk.This paper focused on the supply chain localization strategy, and created a supply chain super-network equilibrium model based on supply chain localization strategy. In this model, this paper considered the collaboration within a supply chain and the competition between different supply chains. The regular cost, risk and localization cost are considered as multi-objective decision, and the level of localization is set as a constraint. This model aims to analyze the impact of supply chain localization strategy on supply chain efficiency, product price, as well as product flow. For better calculation, the model is then converted into a variational inequality(VI) model. Case studies are given in the end for illustration and conclusion purpose.The main content of this paper includes the following:① Analyzed the characteristics of each steps of globalization strategy, and found out the restrictions that hampered the development of globalization strategy. Then portrayed the forms and advantages of localization strategy, and explained the relationship between globalization and localization strategy.② Figured out the motivations for supply chain localization strategy, and depicted the forms of localization strategy in a supply chain perspective. Analyzed the behaviors of each nodes in supply chain super-network.③ Established a supply chain localization model with multi-objective decision based on super-network equilibrium theory. Analyzed the optimization behavior of suppliers, manufacturers and markets, and considered the preference of each decision-makers. The regular cost, risk and localization cost were considered as multi-objective decision, and the level of localization was set as constraint. This model aimed to analyze the impact of supply chain localization strategy on supply chain efficiency, product price, as well as product flow. For better calculation, the model was then converted into a variational inequality(VI) model.④ Through a series of case study, this paper analyzed the impact of supply chain localization strategy of a particular company on the supply chain. At last, instructive conclusions were carried out. Extragradient method was applied in the calculation and the whole calculation process was realized with Matlab 8.3.