Supply chain (SC) networks have become more prominent,
complex,
and challenging to manage, especially considering the multitude of
risks and uncertainty that may manifest. Studies have shown two basic
approaches to hedge against the negative impact of SC disruptions:
proactive and reactive. While the former methods suggest different
approaches to generating robust and resilient structures, the latter
approach ensures that the SC recovers effectively. A general shortcoming
of existing work is not considering SC dynamics. Consequently, disruptions
are considered static events without including the durations and recovery
policies. In this work, we develop a SC model that aids decision-making
in addressing disruptions by considering proactive and reactive strategies.
We adopted a discrete time-expanded model to solve the SC problem
and consider the disruption dynamics using the rolling horizon framework.
In the proposed SC model, a graph network represents the SC, where
the nodes consisting of suppliers, manufacturing sites, warehouses,
and customers interact using the arcs. The arcs determine the flow
of materials between nodes. Independent disruptions can occur at the
nodes and/or arcs, and the time of disruption is quantified using
the geometric distribution. In the advent of disruption, we have adopted
adjusting routing plans, inventory levels, capacity flexibility, and
other tactical and operational decisions to hedge against disruption.
To illustrate the proposed approach, we used a small problem to illustrate
the effect of arcs and node disruption in decision-making and a realistic
case study to demonstrate the proposed framework’s computational
complexity. The results suggested that the effect of node disruption
is more predominant because the initial network configuration limits
the flexibility at the nodes. Furthermore, it was shown that the SC
operated efficiently, as the solution offers a balance between the
service level and the total cost of operating the SC.