Supplier-Selection Practices for Robust Global Supply Chain Networks: A Simulation Of The Global Auto Industry
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abstract
How can companies develop and maintain global supply chain networks that are robustthat is, capable of maintaining an uninterrupted flow of goods and materialswhen confronted with a geographically spreading disruption that could cause the shutdown of multiple suppliers at once? To answer this question, this article combines an empirical analysis of supply chain networks of three global automotive manufacturers with computational experiments. The results reveal that even when a small fraction of buyers adopt regionalizing supplier-selection practicesthose in which a buyer chooses geographically proximate suppliers, whether to the buyer or its current suppliersthe supply chain network becomes more robust.
