On product characteristics in multi-product two-echelon resilient network design

Kurzfassung/Abstract

Ocean shipping is integral to today’s global and interconnected supply chain networks. To supply products to the hinterland, inland waterway transport is vital due to its economic advantages wherever possible. However, major inland waterways are prone to recurring disruptions caused. These disruptions lead carriers to impose surcharges, which can severely affect firm performance. To mitigate these disruptions, different resilience strategies, which potentially influence each other, need to be evaluated for each product within the product portfolio. In this paper, we decide on the resilience strategies and transportation flows for a two-echelon inbound supply chain with multiple products that are needed to produce a single finished good under transportation cost and lead time uncertainty to minimize total expected costs. The problem is formulated as a two-stage stochastic mixed-integer linear program. To solve large instances, we propose model enhancements that strengthen the formulation and a heuristic approach to particularly solve large problem instances. We present a case study based on a chemical company at the border of the Rhine River. Considering disruptions, the cost-efficient mix of resilience strategies significantly depends on the specific product characteristics. Considering multiple products jointly reduces resilience costs by up to 79% compared with solving the problem separately for each product. Moreover, historical shifts in disruption probabilities and impacts over the past four decades require an adjustment of the resilience mix. Our findings demonstrate that multi-product considerations are essential for resilient supply chain network design and that resilience strategies must be tailored to product characteristics and evolving disruption risks.