INVESTIGATION OF RISKS & DISRUPTIONS IN A PRODUCT SUPPLY CHAIN

Abstract

The supply chains around the world face constant threats from risks of disruption. The need of the hour is to find effective ways to tackle the constant risks ficed by business operations. This work investigates various supply side risks and resulting disruptions. both internal and external to the focal organization in an aerospace product supply chain. A framework and a simulation model are developed based on the industrial case study taken up at an aerospace component manufacturer, which is considered as the focal firm. It sources from a network of global suppliers and caters to the internal customer primarily as well as Indian Defense Forces. The objective is to study the causes and effects of disruptions to make the supply chain less risk prone and more resilient. The analysis of possible risk scenarios is done through a framework mainly based on the FMEA (Failure Mean Effect Analysis) methodology in the first phase. Potential disruptions along with the product and information flow are modeled using Discrete Event Simulation Technique in the second phase. The assessment from FMEA framework helps to form a risk orientation & formulate various disruption scenarios. On the other hand. Simulation is used to measure and compare the performance of supply chain, when it functions normally and when it is subjected to disruptions. thereby quantifying the disruption impact of some supply side risks. The investigation of risks and disruptions in the supply chain reveals that raw material obsolescence, delay in material supply and shelf life expiry oiraw material, are more severe out of the other supply side risks. Therefore, they demand allocation of more resources and time. For all the supply side risks identified, risk mitigation measures have been suggested. The analysis by simulation model concludes that disruptions result in significant and measurable reduction in the average finished inventory stock, fulfilled orders and an increase in the average back orders. When the disruption impact is higher. the back ordered demand goes to such high levels so as to make it difficult for the firm to recover. thereby exposing its customer to schedule delays and also resulting in loss of goodwill.