System dynamics modelling for supply chain disruptions

Unexpected events or black swan events could highly deteriorate supply chain performance. Hence, proactive and reactive strategies should be considered when planning for disruptions in a multi-echelon supply chain. In this study, a system dynamics framework is introduced to observe the supply chain behaviour and evaluate the impacts of disruptions. The model enables the examination of full and partial disruptions and the incorporation of expediting orders after a disturbance. The effects of disruptions on the service levels, costs, profits and inventory levels, of the supply chain are analysed. The usage of the framework and the findings can serve to define disruption policies, and assist in the decisions relating to the supply chain design. After running several scenarios, it was determined that the disruptions happening in the downstream levels have more impacts on the SC performance than the disruptions in the upstream levels. Hence, the disruption policies for the downstream levels should have higher priority. Moreover, the results suggest that expediting after disruptions do not offer benefits to the long-term supply chain performance.