Abstract
This is the first study that presents a supply chain (SC) resilience measure with the ripple effect considerations including both disruption and recovery stages. SCs have become more prone to disruptions due to their complexity and strategic outsourcing. While development of resilient SC designs is desirable and indeed critical to withstand the disruptions, exploiting the resilience capabilities to achieve the target performance outcomes through effective recovery is becoming increasingly important. More adversely, resilience assessment in multi-stage SCs is particularly challenged by consideration of disruption propagation and its associated impact known as the ripple effect. We theorize a new measure to quantify the resilience of the original equipment manufacturer (OEM) with a multi-stage assessment of suppliers’ proneness to disruptions and the SC exposure to the ripple effect. We examine and test the developed notion of SC resilience as a function of supplier vulnerability and recoverability using a Bayesian network and considering disruption propagation using a real-life case-study in car manufacturing. The findings suggest that our model can be of value for OEMs to identify the resilience level of their most important suppliers based on forming a quadrant plot in terms of supplier importance and resilience. Our approach can be used by managers to identify the disruption profiles in the supply base and associated SC performance degradation due to the ripple effect. Our method explicitly allows to uncover latent, high-risk suppliers to develop recommendations to control the ripple effect. Utilizing the outcomes of this research can support the design of resilient supply networks with a large number of suppliers: critical suppliers with low resilience can be identified and developed.
Similar content being viewed by others
References
Altay, N., Gunasekaran, A., Dubey, R., & Childe, S. J. (2018). Agility and resilience as antecedents of supply chain performance under moderating effects of organizational culture within humanitarian setting: a dynamic capability view. Production Planning and Control, 29(14), 1158–1174.
Arons, S. (2017). BMW to stop production in China, South Africa on Shortage. Bloomberg. URL https://www.bloomberg.com/europe. Accessed 18 Apr 2019.
Automotive News. (2018). http://edit.autonews.com/article/20180730/OEM10/180739995/&template=print&nocache=1. Accessed September 11, 2018.
Baharmand, H., Comes, T., & Lauras, M. (2017). Defining and measuring the network flexibility of humanitarian supply chains: Insights from the 2015 Nepal earthquake. Annals of Operations Research 1–40.
Bao, S., Zhang, C., Ouyang, M., & Miao, L. (2017). An integrated tri-level model for enhancing the resilience of facilities against intentional attacks. Annals of Operations Research. https://doi.org/10.1007/s10479-017-2705-y.
BBC News. (2011). Japan disaster: Supply shortages in three months. http://www.bbc.com/news/business-12782566. Accessed 18 Apr 2019.
Behl, A., & Dutta, P. (2018). Humanitarian supply chain management: A thematic literature review and future directions of research. Annals of Operations Research 1–44.
Blackhurst, J., Rungtusanatham, M. J., Scheibe, K., & Ambulkar, S. (2018). Supply chain vulnerability assessment: A network based visualization and clustering analysis approach. Journal of Purchasing and Supply Management, 24(1), 21–30.
Bode, C., & Wagner, S. M. (2015). Structural drivers of upstream supply chain complexity and the frequency of supply chain disruptions. Journal of Operations Management, 36, 215–228.
Boutselis, P., & McNaught, K. (2019). Using Bayesian networks to forecast spares demand from equipment failures in a changing service logistics context. International Journal of Production Economics, 209, 325–333.
Brandon-Jones, E., Squire, B., Autry, C., & Petersen, K. (2014). A contingent resource-based perspective of supply chain resilience and robustness. Journal of Supply Chain Management, 50(3), 55–73.
Brusset, X., & Teller, C. (2017). Supply chain capabilities, risk, and resilience. International Journal of Production Economics, 184, 59–68.
Carbonara, N., & Pellegrino, R. (2017). How do supply chain risk management flexibility-driven strategies perform in mitigating supply disruption risks? International Journal of Integrated Supply Management, 11(4), 354–379.
Cavalcantea, I. M., Frazzon, E. M., Forcellinia, F. A., & Ivanov, D. (2019). A supervised machine learning approach to data-driven simulation of resilient supplier selection in digital manufacturing. International Journal of Information Management, 49, 86–97.
Chen, H. Y., Das, A., & Ivanov, D. (2019). Building resilience and managing post-disruption supply chain recovery: Lessons from the information and communication technology industry. International Journal of Information Management, 49, 330–342.
Chen, L., & Miller-Hooks, E. (2012). Resilience: An indicator of recovery capability in intermodal freight transport. Transportation Science, 46(1), 109–123.
Chen, X., Xi, Z., & Jing, P. (2017). A unified framework for evaluating supply chain reliability and resilience. IEEE Transactions on Reliability, 66(4), 1144–1156.
Chowdhury, M. H., & Quaddus, M. (2017). Supply chain resilience: Conceptualization and scale development using dynamic capability theory. International Journal of Production Economics, 188, 185–204.
Christopher, M., & Peck, H. (2004). Building the resilient supply chain. International Journal of Logistics Management, 15(2), 1–14.
Constantinou, A. C., Fenton, N., Marsh, W., & Radlinski, L. (2016). From complex questionnaire and interviewing data to intelligent Bayesian network models for medical decision support. Artificial Intelligence in Medicine, 67, 75–93.
Craighead, C. W., Blackhurst, J., Rungtusanatham, M. J., & Handfield, R. B. (2007). The severity of supply chain disruptions: Design characteristics and mitigation capabilities. Decision Science, 38(1), 131–156.
Dolgui, A., Ivanov, D., & Rozhkov, M. (2019). Does the ripple effect influence the bullwhip effect? An integrated analysis of structural and operational dynamics in the supply chain. International Journal of Production Research. https://doi.org/10.1080/00207543.2019.1627438.
Dolgui, A., Ivanov, D., & Sokolov, B. (2018). Ripple effect in the supply chain: An analysis and recent literature. International Journal of Production Research, 56(1–2), 413–430.
Dubey, R., Altay, N., & Blome, C. (2017). Swift trust and commitment: The missing links for humanitarian supply chain coordination? Annals of Operations Research 1–19.
Dubey, R., Altay, N., Gunasekaran, A., Blome, C., Papadopoulos, T., & Childe, S. J. (2018). Supply chain agility, adaptability and alignment: Empirical evidence from the Indian auto components industry. International Journal of Operations & Production Management, 38(1), 129–148.
Dubey, R., Gunasekaran, A., Childe, S. J., Papadopoulos, A., Blome, C., & Luo, Z. (2019). Antecedents of resilient supply chains: An empirical study. IEEE Transactions on Engineering Management, 66(1), 8–19.
Ellis, S. C., Henry, R. M., & Shockley, J. (2010). Buyer perceptions of supply disruption risk: A behavioral view and empirical assessment. Journal of Operations Management, 28(1), 34–46.
Elluru, S., Gupta, H., Karu, H., & Prakash Singh, S. (2017). Proactive and reactive models for disaster resilient supply chain. Annals of Operations Research 1–26.
Fenton, N., & Neil, M. (2013). Risk assessment and decision analysis with Bayesian networks. Boca Raton, FL: CRC Press.
Gao, S. Y., Simchi-Levi, D., Teo, C. P., & Yan, Z. (2019). Disruption risk mitigation in supply chains: The risk exposure index revisited. Operations Research, 67(3), 831–852.
Garvey, M. D., Carnovale, S., & Yeniyurt, S. (2015). An analytical framework for supply network risk propagation: A Bayesian network approach. European Journal of Operational Research, 243(2), 618–627.
Govindan, G., Jafarian, A., Azbari, M. E., & Choi, T. M. (2016). Optimal bi-objective redundancy allocation for systems reliability and risk management. IEEE Transactions on Cybernetics, 46, 1735–1748.
Han, J., & Shin, K. S. (2016). Evaluation mechanism for structural robustness of supply chain considering disruption propagation. International Journal of Production Research, 54(1), 135–151.
He, J., Alavifard, F., Ivanov, D., & Jahani, H. (2018). A real-option approach to mitigate disruption risk in the supply chain. Omega: The International Journal of Management Science. https://doi.org/10.1016/j.omega.2018.08.008.
Henry, D., & Ramirez-Marquez, E. (2012). Generic metric quantitative approaches for system resilience as a function of time. Reliability Engineering & System Safety, 99, 114–122.
Hosseini, S., Al Khaled, A., & Sarder, M. D. (2016a). A general framework for assessing system resilience using Bayesian networks: A case study of sulfuric acid manufacturer. Journal of Manufacturing Systems, 41, 211–227.
Hosseini, S., & Barker, K. (2016a). A Bayesian network model for resilience-based supplier selection. International Journal of Production Economics, 180, 68–87.
Hosseini, S., & Barker, K. (2016b). Modeling infrastructure resilience using Bayesian networks: A case study of inland waterway ports. Computers & Industrial Engineering, 93, 252–266.
Hosseini, S., Barker, K., & Ramirez-Marquez, J. E. (2016b). A review of definitions and measures of system resilience. Reliability Engineering & System Safety, 145, 47–61.
Hosseini, S., Ivanov, D., & Dolgui, A. (2019a). Review of quantitative methods for supply chain resilience analysis. Transportation Research Part E, 125, 285–307.
Hosseini, S., Morshedlou, N., Ivanov, D., Sarder, M. D., Barker, K., & Al Khaled, A. (2019b). Resilient supplier selection and optimal order allocation under disruption risks. International Journal of Production Economics, 213, 124–137.
Ivanov, D. (2017). Simulation-based ripple effect modeling in the supply chain. International Journal of Production Research, 55(7), 2083–2101.
Ivanov, D. (2018). Revealing interfaces of supply chain resilience and sustainability: A simulation study. International Journal of Production Research, 56(10), 3507–3523.
Ivanov, D. (2019). “A blessing in disguise” or “as if it wasn’t hard enough already”: Reciprocal and aggravate vulnerabilities in the supply chain. International Journal of Production Research. https://doi.org/10.1080/00207543.2019.1634850.
Ivanov, D., & Arkhipov, A. (2011). Analysis of structure adaptation potential in designing supply chains in an agile supply chain environment. International Journal of Integrated Supply Management, 6(2), 165–180.
Ivanov, D., & Dolgui, A. (2018). Low-Certainty-Need (LCN) supply chains: A new perspective in managing disruption risks and resilience. International Journal of Production Research. https://doi.org/10.1080/00207543.2018.1521025.
Ivanov, D., Dolgui, A., & Sokolov, B. (Eds.). (2019). Handbook of ripple effects in the supply chain. New York: Springer. ISBN 978-3-030-14301-5.
Ivanov, D., & Sokolov, B. (2013). Control and system-theoretic identification of the supply chain dynamics domain for planning, analysis, and adaptation of performance under uncertainty. European Journal of Operational Research, 224(2), 313–323.
Ivanov, D., & Sokolov, B. (2019). Simultaneous structural-operational control of supply chain dynamics and resilience. Annals of Operations Research. https://doi.org/10.1007/s10479-019-03231-0.
Ivanov, D., Sokolov, B., & Dolgui, A. (2014a). The Ripple effect in supply chains: Trade-off ‘efficiency-flexibility-resilience’ in disruption management. International Journal of Production Research, 52(7), 2154–2172.
Ivanov, D., Sokolov, B., & Pavlov, A. (2014b). Optimal distribution (re)planning in a centralized multi-stage network under conditions of ripple effect and structure dynamics. European Journal of Operational Research, 237(2), 758–770.
Ivanov, D., Sokolov, B., Solovyeva, I., Dolgui, A., & Jie, F. (2016). Discrete recovery policies for time-critical supply chains under conditions of ripple effect. International Journal of Production Research, 54(23), 7245–7258.
Jensen, F. V., & Nielsen, T. D. (2007). Bayesian networks and decision graphs. Berlin: Springer.
Käki, A., Salo, A., & Talluri, S. (2015). Disruptions in supply networks: A probabilistic risk assessment approach. Journal of Business Logistics, 36(3), 273–287.
Kamalahmadi, M., & Parast, M. (2017). As assessment of supply chain disruption mitigation strategies. International Journal of Production Economics, 184, 210–230.
Kim, Y., Chen, Y.-S., & Linderman, K. (2015). Supply network disruptions resilience: A network structural perspective. Journal of Operations Management, 33–34, 43–59.
Kovacs, G., & Tatham, P. (2009). Responding to disruptions in the supply network-from dormant to action. International Journal of Business Logistics, 30(2), 215–229.
Kull, T. J., & Talluri, S. (2008). A supply risk reduction model using integrated multicriteria decision making. IEEE Transactions on Engineering Management, 55(3), 409–419.
Langseth, H., & Portinale, L. (2007). Bayesian networks in reliability. Reliability Engineering & System Safety, 92(1), 92–108.
Levner, E., & Ptuskin, A. (2017). Entropy-based model for the ripple effect: Managing environmental risks in supply chains. International Journal of Production Research, 56(7), 2539–2551.
Liu, Z., Liu, Y., & Baoping, C. (2018). Risk analysis of blowout preventer by mapping GO models into Bayesian networks. Journal of Loss Prevention in the Process Industries, 52, 54–65.
Macdonald, J. R., Zobel, C. W., Melnyk, S. A., & Griffis, S. E. (2018). Supply chain risk and resilience: Theory building through structured experiments and simulation. International Journal of Production Research, 56(12), 4337–4355.
Marquez, D., Neil, M., & Fenton, N. (2010). Improved reliability modeling using Bayesian networks and dynamic discretization. Reliability Engineering & System Safety, 95(4), 412–425.
Massey, R. (2011). Tsunami force Sunderland Nissan to shut down for three days because of shortage of parts from Japan. Daily Mail. http://www.dailymail.co.uk/news/article-1374358/Tsunami-forces-Sunderland-Nissan-plant-shut-shortage-parts.html. Accessed 18 Apr 2019.
Nair, A., & Vidal, J. M. (2011). Supply network topology and robustness against disruptions-an investigation using multi-agent model. International Journal of Production Research, 49(5), 1391–1404.
Narasimhan, R., & Talluri, S. (2009). Perspectives on risk management in supply chains. Journal of Operations Management, 27(2), 114–118.
Ojha, R., Ghadge, A., Tiwari, M. K., & Bititci, U. S. (2018). Bayesian network modelling for supply chain risk propagation. International Journal of Production Research, 56(17), 5795–5819.
Pavlov, A., Ivanov, D., Dolgui, A., & Sokolov, B. (2018). Hybrid fuzzy-probabilistic approach to supply chain resilience assessment. IEEE Transactions on Engineering Management, 65(2), 303–315.
Pavlov, A., Ivanov, D., Pavlov, D., & Slinko, A. (2019). Optimization of network redundancy and contingency planning in sustainable and resilient supply chain resource management under conditions of structural dynamics. Annals of Operations Research. https://doi.org/10.1007/s10479-019-03182-6.
Pele, D. T., Lazar, E., & Dufour, A. (2017). Information entropy and measures of market risk. Entropy, 19(226), 1–19.
Petousis, P., Han, S. X., Aberle, D., & Bui, A. A. (2016). Prediction of lung cancer incidence on the low-dose computed tomography arm of the national lung screening: A dynamic Bayesian network. Artificial Intelligence in Medicine, 72, 42–55.
Prasad, S., Woldt, J., Tata, J., & Altay, N. (2017). Application of project management to disaster resilience. Annals of Operations Research. https://doi.org/10.1007/s10479-017-2679-9.
Qazi, A., Dickson, A., Quigley, J., & Gaudenzi, B. (2018). Supply chain risk network management: A Bayesian belief network and expected utility based approach for managing supply chain risks. International Journal of Production Economics, 196, 24–42.
Qazi, A., Quigley, J., Dickson, A., & Ekici, O. (2017). Exploring dependency based probabilistic supply risk measures for prioritizing interdependent risks and strategies. European Journal of Operational Research, 259(1), 189–204.
Rubbernews.com. (2018). Michigan supplier fire idles 4,000 at Ford truck plant in Dearborn. http://www.rubbernews.com/article/20180510/NEWS/180519997?template=printart. Accessed September 11, 2018.
Sahebjamnia, N., Torabi, A., & Mansouri, A. (2018). Building organizational resilience in the face of multiple disruptions. International Journal of Production Economics, 197, 63–83.
Scheibe, K. P., & Blackhurst, J. (2018). Supply chain disruption propagation: A systemic risk and normal accident theory perspective. International Journal of Production Research, 56(1–2), 43–59.
Shao, B. B. M., Shi, Z. M., Choi, T. Y., & Chae, S. (2018). A data-analytics approach to identifying hidden critical suppliers in supply networks: Development of nexus supplier index. Decision Support Systems, 114, 37–48.
Sheffi, Y. (2007). The resilient enterprise: Overcoming vulnerability for competitive advantage. Cambridge, MA: The MIT Press.
Sheffi, Y., & Rice, J. (2005). A supply chain view of the resilient enterprise. MIT Sloan Management Review, 47(1), 41–48.
Sierra, L. A., Yepes, V., Garcia-Segura, T., & Pellicer, E. (2018). Bayesian network method for decision-making about social sustainability of infrastructure projects. Journal of Cleaner Production, 176, 521–534.
Simchi-Levi, D., Schmidt, W., Wei, Y., Zhang, P. Y., Combs, K., Ge, Y., et al. (2015). Identifying risks and mitigating disruptions in the automotive supply chain. Interfaces, 45(5), 375–390.
Smith, D., Veitch, B., Khan, F., & Taylor, R. (2017). Understanding industrial safety: Comparing fault tree, Bayesian network, and FRAM approaches. Journal of Loss Prevention in Process Industries, 45, 88–101.
Sokolov, B., Ivanov, D., Dolgui, A., & Pavlov, A. (2016). Structural quantification of the ripple effect in the supply chain. International Journal of Production Research, 54(1), 152–169.
Song, B., Lee, C., & Park, Y. (2013). Assessing the risks of service failures based on ripple effects: A Bayesian network approach. International Journal of Production Economics, 141, 493–504.
Sturlaugson, L., Perreault, L., & Sheppard, J. W. (2017). Factored performance functions and decision making in continuous time Bayesian networks. Journal of Applied Logic, 22, 28–45.
Svensson, G. (2000). A conceptual framework for the analysis of vulnerability in supply chains. International Journal of Physical Distribution Logistics Management, 30(9), 731–749.
Talluri, S., Kull, T. J., Yildiz, H., & Yoon, J. (2013). Assessing the efficiency of risk mitigation strategies in supply chains. Journal of Business Logistics, 34(4), 253–269.
Tang, C., Yi, Y., Yang, Z., & Sun, J. (2016). Risk analysis of emergent water pollution accidents based on a Bayesian network. Journal of Environmental Management, 165(1), 199–205.
Tang, C. S. (2006). Robust strategies for mitigating supply chain disruptions. International Journal of Logistics: Research and Applications, 9(1), 33–45.
Torabi, S. A., Baghersad, M., & Mansouri, S. A. (2015). Resilient supplier selection and order allocation under operational and disruption risks. Transportation Research Part E, 79, 22–48.
Tukamuhabwa, B. R., Stevenson, M., Bubsy, J., & Zorzini, M. (2015). Supply chain resilience: Definition, review and theoretical foundations for future study. International Journal of Production Research, 35(18), 5592–5623.
Uusitalo, L. (2007). Advantages and challenges of Bayesian networks in environmental modeling. Ecological Modeling, 203(3–4), 312–318.
Wagner, S. M., & Neshat, N. (2010). Assessing the vulnerability of supply chains using graph theory. International Journal of Productions Economics, 126(1), 121–129.
Wamba, S. F., Gunasekaran, A., Dubey, R., & Ngai, E. W. (2018). Big data analytics in operations and supply chain management. Annals of Operations Research, 270(1–2), 1–4.
Wang, Q. (2008). Probability distribution and entropy as a measure of uncertainty. Journal of Physics A: Mathematical and Theoretical, 41(6), 065004.
Yoon, J., Talluri, S., Yildiz, H., & Ho, W. (2018). Models for supplier selection and risk mitigation: A holistic approach. International Journal of Production Research, 56(10), 3636–3661.
ZeroHedge. (2011). Latest Japanese supply chain disruptions summary. https://www.zerohedge.com/article/latest-japanese-supply-chain-disruption-summary. Accessed 18 Apr 2019.
Zhao, K., Kumar, A., Harrison, T. P., & Yen, J. (2011). Analyzing the resilience of complex supply network topologies against random targeted disruptions. IEEE Systems Journal, 5(1), 28–39.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Hosseini, S., Ivanov, D. A new resilience measure for supply networks with the ripple effect considerations: a Bayesian network approach. Ann Oper Res 319, 581–607 (2022). https://doi.org/10.1007/s10479-019-03350-8
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10479-019-03350-8