Supply Chain Macro Risk Simulation with an Analytic Network Process Evaluation

Hella Abidi, Matthias Klumpp
(FOM University of Applied Sciences Institute for Logistics and Service Management (ild), Essen, Germany)

Abstract: In 2010 exemplary the volcanic ash disruption in Iceland caused a high damage along supply chains because over two days no flights were possible within Europe. The second big disaster which led to an interruption of supply chains was 2011 in Japan where many manufacturers were affected because of the interconnection of many supply chains by structural and geographic aspects. Supply chain risk management becomes more and more important for researchers and practitioners. In particular, due to our today’s environment the number of natural and man-made disasters has increased significantly over the years. Furthermore, due to the climate change there will be more disasters. Therefore, this research paper aims to develop a risk controlling measurement framework due to macro risks for the industries that act worldwide. The risk controlling measurement framework focuses on mitigation and control. Those have to be classified in two groups, proactive and reactive, because not all macro risks are similar and cause high damage. In this research paper first approach of classification risk factors to each macro risk event by showing the impact on supply chain can be seen as a satisfied result and is helpful for strategic decision by organizing and issuing a supply chain risk plan. In this research paper a soft operation research method, analytical network process, for a global supply chain in case of disruption by an environmental risk such as a natural disaster is applied.

Key words: supply chain risk management; analytical network process; natural disasters; global supply chain; supply chain resilience

JEL code: M16, C44