Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case

https://doi.org/10.1016/j.tre.2020.101922Get rights and content

Highlights

  • Epidemic outbreaks are a special case of supply chain (SC) risks.

  • We articulate the specific features of epidemic outbreaks in SCs.

  • We demonstrate a simulation model for epidemic outbreak analysis.

  • We use an example of coronavirus COVID-19 outbreak.

Abstract

Epidemic outbreaks are a special case of supply chain (SC) risks which is distinctively characterized by a long-term disruption existence, disruption propagations (i.e., the ripple effect), and high uncertainty. We present the results of a simulation study that opens some new research tensions on the impact of COVID-19 (SARS-CoV-2) on the global SCs. First, we articulate the specific features that frame epidemic outbreaks as a unique type of SC disruption risks. Second, we demonstrate how simulation-based methodology can be used to examine and predict the impacts of epidemic outbreaks on the SC performance using the example of coronavirus COVID-19 and anyLogistix simulation and optimization software. We offer an analysis for observing and predicting both short-term and long-term impacts of epidemic outbreaks on the SCs along with managerial insights. A set of sensitivity experiments for different scenarios allows illustrating the model’s behavior and its value for decision-makers. The major observation from the simulation experiments is that the timing of the closing and opening of the facilities at different echelons might become a major factor that determines the epidemic outbreak impact on the SC performance rather than an upstream disruption duration or the speed of epidemic propagation. Other important factors are lead-time, speed of epidemic propagation, and the upstream and downstream disruption durations in the SC. The outcomes of this research can be used by decision-makers to predict the operative and long-term impacts of epidemic outbreaks on the SCs and develop pandemic SC plans. Our approach can also help to identify the successful and wrong elements of risk mitigation/preparedness and recovery policies in case of epidemic outbreaks. The paper is concluded by summarizing the most important insights and outlining future research agenda.

Keywords

Supply chain
Risk management
Resilience
Epidemic outbreak
Coronavirus
COVID-19
SARS-CoV-2
Pandemic plan
Simulation
Digital twin

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