Ripple effect mitigation capabilities of a hub and spoke distribution network: an empirical analysis of pharmaceutical supply chains in India

Abstract

In this study, we focus on ripple effect mitigation capability of the Indian pharmaceutical distribution network during disruptions like COVID-19 pandemic. To study the mitigation capabilities, we conduct a multi-layer analysis (network, process, and control levels) using Bayesian network, mathematical optimisation, and discrete event simulation methodologies. This analysis revealed an associative relationship between ripple effect mitigation capabilities and network design characteristics of upstream supply chain entities. Using stochastic optimisation and Lagrangian relaxation, we then find ideal candidates for regional distribution centres at the downstream level. We then integrate these downstream locations with other supply chain entities for building the network optimisation and simulation model to analyse overall performance of the system. We demonstrate utility of our proposed methodology using a case study involving distribution of N95 masks to ‘Jan Aushadhi’ (peoples’ medicines) stores in India during COVID-19 pandemic. We find that supply chain reconfiguration improves service level to 95.7% and reduces order backlogs by 10.7%. We also find that regional distribution centres and backup supply sources provide overall flexibility and improve occupational health and safety. We further investigate alternate mitigation capabilities through fortification of suppliers’ workforce by vaccination. We offer recommendations for policymakers and managers and implications for academic research.

KEYWORDS:

• Ripple effect
• pharmaceutical supply chain
• N95 masks
• Bayesian network
• stochastic hub location
• discrete event simulation

Data availability statement

The data that support the findings of this study are available from the corresponding author, upon reasonable request.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Rohit Sindhwani

Rohit Sindhwani is an Assistant Professor in Operations Management Group at Institute of Management Technology Ghaziabad, India. He holds a Ph.D. in Operations Management from Indian Institute of Management Lucknow and an MBA from the Department of Industrial and Management Engineering from Indian Institute of Technology Kanpur, India. His research areas are the application of optimisation and simulation in supply chain resilience and disruption, humanitarian and healthcare logistics, and hub location problems. He has published in reputable international journals like the International Journal of Production Research, IEEE Transactions on Engineering Management, International Journal of Operational Research, Journal of Asia Business Studies, among others.

Jayanth Jayaram

Jayanth Jayaram is a Professor of Marketing and Supply Chain Management and Ph.D. Program Coordinator at the Price College of Business, University of Oklahoma. Previously he was a Moore Research Fellow and Professor of Management Science at the University of South Carolina. Dr Jayaram holds a Ph.D. in supply chain management from Michigan State University (1998). He also holds an MBA from Central Michigan University and a bachelor’s degree in mathematics from the University of Bombay. Dr Jayaram is professionally qualified as a Chartered Accountant in India and is a Certified Purchasing and Supply Management Professional from U.S.A.

Dr Jayaram has research interests in ripple effect in supply chains, sustainability, and inter-organisational relationships. He has published several research articles in various leading journals, including Journal of International Business Studies, Journal of Operations Management, Production and Operations Management, Decision Sciences, and IEEE Transactions on Engineering Management. He has been reappointed for the second term as a Department Editor of Journal of Operations Management. He serves as a Senior Editor for Journal of Business Logistics and as an Associate Editor of International Journal of Production Research and Journal of Supply Chain Management. He is part of the Editorial Board of IEEE Transactions on Engineering Management as well as Production and Operations Management.

Venkataramanaiah Saddikuti

Venkataramanaiah Saddikuti is a Professor of Operations Management at Indian Institute of Management Lucknow. He has over 32 years of teaching and research experience including corporate research at Honeywell Singapore. He was a research fellow at Singapore MIT Alliance (SMA) program at Nanyang Business School Singapore. He worked at Honeywell labs Singapore, Indian Institute of Technology Madras and Indian Institute of Management Indore. He has published more than 100 research papers in peer reviewed journals (like International Journal of Production Research, International Journal of Production Economics, Journal of Operational Research, Production Planning and Control, International Journal of the Operational Research Society, Journal of Asia Business Studies, Journal of Health Management, etc.) and conferences (Decision Sciences, INFORMS, POMS, SOM, ICPR, EURO, etc.). His research interest includes Supply networks, Operations Scheduling, healthcare supply chains, digital health, affordable healthcare delivery models, procurement, cluster development studies. He was a Fulbright Scholar at Arizona State University, USA. He has undergone training on global participant centered learning at Harvard Business School. He was a certified professional in Lean Healthcare. He has received Nelson Mandela Leadership award and Jagatik Ayurvigyan Samman Award for his work in healthcare management. He has trained more than 600 MBA students in healthcare management and a mentor for Startups in healthcare.