Robust food supply supply chains : an integrated framework for vulnerability assessment and disturbance management

The operation of supply chains (SCs) has for many years been focused on efficiency, leanness and responsiveness. This has resulted in reduced slack in operations, compressed cycle times, increased productivity and minimised inventory levels along the SC. Combined with tight tolerance settings for the realisation of logistics and production processes, this has led to SC performances that are frequently not robust. SCs are becoming increasingly vulnerable to disturbances, which can decrease the competitive power of the entire chain in the market. Moreover, in the case of food SCs non-robust performances may ultimately result in empty shelves in grocery stores and supermarkets. The overall objective of this research is to contribute to Supply Chain Management (SCM) theory by developing a structured approach to assess SC vulnerability, so that robust performances of food SCs can be assured. We also aim to help companies in the food industry to evaluate their current state of vulnerability, and to improve their performance robustness through a better understanding of vulnerability issues. The following research questions (RQs) stem from these objectives: RQ1: What are the main research challenges related to (food) SC robustness? RQ2: What are the main elements that have to be considered in the design of robust SCs and what are the relationships between these elements? RQ3: What is the relationship between the contextual factors of food SCs and the use of disturbance management principles? RQ4: How to systematically assess the impact of disturbances in (food) SC processes on the robustness of (food) SC performances? To answer these RQs we used different methodologies, both qualitative and quantitative. For each question, we conducted a literature survey to identify gaps in existing research and define the state of the art of knowledge on the related topics. For the second and third RQ, we conducted both exploration and testing on selected case studies. Finally, to obtain more detailed answers to the fourth question, we used simulation modelling and scenario analysis for vulnerability assessment. Main findings are summarised as follows. Based on an extensive literature review, we answered RQ1. The main research challenges were related to the need to define SC robustness more precisely, to identify and classify disturbances and their causes in the context of the specific characteristics of SCs and to make a systematic overview of (re)design strategies that may improve SC robustness. Also, we found that it is useful to be able to discriminate between varying degrees of SC vulnerability and to find a measure that quantifies the extent to which a company or SC shows robust performances when exposed to disturbances. To address RQ2, we define SC robustness as the degree to which a SC shows an acceptable performance in (each of) its Key Performance Indicators (KPIs) during and after an unexpected event that caused a disturbance in one or more logistics processes. Based on the SCM literature we identified the main elements needed to achieve robust performances and structured them together to form a conceptual framework for the design of robust SCs. We then explained the logic of the framework and elaborate on each of its main elements: the SC scenario, SC disturbances, SC performance, sources of food SC vulnerability, and redesign principles and strategies. Based on three case studies, we answered RQ3. Our major findings show that the contextual factors have a consistent relationship to Disturbance Management Principles (DMPs). The product and SC environment characteristics are contextual factors that are hard to change and these characteristics initiate the use of specific DMPs as well as constrain the use of potential response actions. The process and the SC network characteristics are contextual factors that are easier to change, and they are affected by the use of the DMPs. We also found a notable relationship between the type of DMP likely to be used and the particular combination of contextual factors present in the observed SC. To address RQ4, we presented a new method for vulnerability assessments, the VULA method. The VULA method helps to identify how much a company is underperforming on a specific Key Performance Indicator (KPI) in the case of a disturbance, how often this would happen and how long it would last. It ultimately informs the decision maker about whether process redesign is needed and what kind of redesign strategies should be used in order to increase the SC’s robustness. The VULA method is demonstrated in the context of a meat SC using discrete-event simulation. The case findings show that performance robustness can be assessed for any KPI using the VULA method. To sum-up the project, all findings were incorporated within an integrated framework for designing robust SCs. The integrated framework consists of the following steps: 1) Description of the SC scenario and identification of its specific contextual factors; 2) Identification of disturbances that may affect KPIs; 3) Definition of the relevant KPIs and identification of the main disturbances through assessment of the SC performance robustness (i.e. application of the VULA method); 4) Identification of the sources of vulnerability that may (strongly) affect the robustness of performances and eventually increase the vulnerability of the SC; 5) Identification of appropriate preventive or disturbance impact reductive redesign strategies; 6) Alteration of SC scenario elements as required by the selected redesign strategies and repeat VULA method for KPIs, as defined in Step 3. Contributions of this research are listed as follows. First, we have identified emerging research areas - SC robustness, and its counterpart, vulnerability. Second, we have developed a definition of SC robustness, operationalized it, and identified and structured the relevant elements for the design of robust SCs in the form of a research framework. With this research framework, we contribute to a better understanding of the concepts of vulnerability and robustness and related issues in food SCs. Third, we identified the relationship between contextual factors of food SCs and specific DMPs used to maintain robust SC performances: characteristics of the product and the SC environment influence the selection and use of DMPs; processes and SC networks are influenced by DMPs. Fourth, we developed specific metrics for vulnerability assessments, which serve as a basis of a VULA method. The VULA method investigates different measures of the variability of both the duration of impacts from disturbances and the fluctuations in their magnitude. With this project, we also hope to have delivered practical insights into food SC vulnerability. First, the integrated framework for the design of robust SCs can be used to guide food companies in successful disturbance management. Second, empirical findings from case studies lead to the identification of changeable characteristics of SCs that can serve as a basis for assessing where to focus efforts to manage disturbances. Third, the VULA method can help top management to get more reliable information about the “health” of the company. The two most important research opportunities are: First, there is a need to extend and validate our findings related to the research framework and contextual factors through further case studies related to other types of (food) products and other types of SCs. Second, there is a need to further develop and test the VULA method, e.g.: to use other indicators and statistical measures for disturbance detection and SC improvement; to define the most appropriate KPI to represent the robustness of a complete SC. We hope this thesis invites other researchers to pick up these challenges and help us further improve the robustness of (food) SCs.