Design of supply chain topology to mitigate demand and supply risks

To achieve competitive advantage, companies have been driven to improve their supply chain by outsourcing their non-core business. However, this increases the external risks, such as the demand and supply risks. Companies face challenges in defining effective supply chain topology to mitigate supply chain risks. In this research, we design supply chain network topologies to mitigate the demand and supply risks. Four supply chain network topologies have been designed to represent different supply chain strategies: efficient, responsive, risk-hedging, and agile strategies. An agent-based modeling approach is proposed to evaluate the performance of the supply chain network topologies under different demand and supply risk scenarios. From the results, we can identify the effective supply chain network topology to mitigate the disruption for a particular risk scenario.