An agent-based model for supply chain recovery in the wake of the COVID-19 pandemic

Towfique Rahman; Firouzeh Taghikhah; Sanjoy Kumar Paul; Nagesh Shukla; Renu Agarwal

doi:10.1016/j.cie.2021.107401

An agent-based model for supply chain recovery in the wake of the COVID-19 pandemic

Comput Ind Eng. 2021 Aug:158:107401. doi: 10.1016/j.cie.2021.107401. Epub 2021 May 18.

Authors

Towfique Rahman¹, Firouzeh Taghikhah^{2

2}, Sanjoy Kumar Paul¹, Nagesh Shukla³, Renu Agarwal¹

Affiliations

¹ UTS Business School, University of Technology Sydney, Sydney, Australia.
² Crawford School of Public Policy, Australian National University, Canberra, Australia.
³ School of Information, Systems and Modelling, Faculty of Engineering, and Information Technology, University of Technology Sydney, Sydney, Australia.

Abstract

The current COVID-19 pandemic has hugely disrupted supply chains (SCs) in different sectors globally. The global demand for many essential items (e.g., facemasks, food products) has been phenomenal, resulting in supply failure. SCs could not keep up with the shortage of raw materials, and manufacturing firms could not ramp up their production capacity to meet these unparalleled demand levels. This study aimed to examine a set of congruent strategies and recovery plans to minimize the cost and maximize the availability of essential items to respond to global SC disruptions. We used facemask SCs as an example and simulated the current state of its supply and demand using the agent-based modeling method. We proposed two main recovery strategies relevant to building emergency supply and extra manufacturing capacity to mitigate SC disruptions. Our findings revealed that minimizing the risk response time and maximizing the production capacity helped essential item manufacturers meet consumers' skyrocketing demands and timely supply to consumers, reducing financial shocks to firms. Our study suggested that delayed implementation of the proposed recovery strategies could lead to supply, demand, and financial shocks for essential item manufacturers. This study scrutinized strategies to mitigate the demand-supply crisis of essential items. It further proposed congruent strategies and recovery plans to alleviate the problem in the exceptional disruptive event caused by COVID-19.

Keywords: COVID-19 pandemic; Essential item; Recovery strategy; Risk and disruption; Supply chain resilience.