![Sample our Economics, Finance,Business & Industry journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5931/TOC-Subject-Sample-2021-Economics-Finance-Business-Industry.jpg"})
ABSTRACT
In the current era of turbulence, demand uncertainty and significant supply delays have become recurrent challenges for every global supply chain, which are accentuated by geopolitical issues, regional conflicts, natural disasters, etc. Companies are keen to decide when and where nearshoring and offshoring their supply locations and to adapt their inventory control policies to cope with significant perturbations. To deal with these challenges, we investigate the integration of inventory planning at the strategic level through a novel setting of the location-inventory problem under uncertainty. This problem is characterised by inbound multi-sourcing, order splitting among multiple suppliers, and optimised inventory decisions from sourcing to customers under uncertain demand and lead time. A two-stage stochastic optimisation model is proposed and solved using a Benders decomposition algorithm, supported by a sample average approximation approach. The results show that both lead time and demand uncertainties impact strategic and tactical decisions of the global supply network. Specifically, multi-sourcing and inbound order splitting policies have proven beneficial when the network faces a high lead time uncertainty. Based on an illustrative case of a global automobile spare parts supply network under different supply-side scenarios, managerial insights are gained on the benefit of onshore, nearshore, and offshore decisions. When facing a high lead time uncertainty, as in the pandemic case or any geopolitical episode, our findings suggest the necessity to rely on nearshoring for the supply side.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Data availability statement
The data related to the paper can be freely available by the authors upon request.
Notes
2 Competitive Alternatives (2016). KPMG's Guide to International Business Location Costs (kpmg.com).
Additional information
Funding
Notes on contributors
Minke Wang
Minke Wang is an assistant professor at the Civil Aviation Flight University of China (CAFUC). He holds a Ph.D. in Management Science and Engineering from the Southwestern University of Finance and Economics. He has been visiting research at Kedge Business School during his Ph.D. thesis studies. His research interests include robust and resilient supply chain design and management and optimising air transportation networks. He has published scientific papers on location-inventory problems, sustainable supply chain design, and air transportation in international journals such as Transportation Research Part-E, Journal of Advanced Transportation.
Mehdi Amiri-Aref
Mehdi Amiri Aref is Associate Professor in the Department of Operations Management and Information Systems (MOSI) at Kedge Business School and holds a PhD in Industrial Engineering From Mazandaran University, Iran, in 2013. He is involved in several European and French national projects. He has been visiting scholars at Newcastle University Business School, and University of Exeter Business School, UK. Mehdi's research interests include supply chain network design, inventory control and planning, risk management in supply chain operations, optimisation and simulation methods. He is the principal author of several scientific articles published in international journals such as European Journal of Operational Research, International Journal of Production Research, Transportation Research E, Transportation Research B, and International Journal of Advanced Manufacturing Technology.
Walid Klibi
Walid Klibi is a Professor of Supply Chain Management and Analytics at Kedge Business School (France), and a founding member of its Center of Excellence in Supply Chain (CESIT), since 2011. He obtained his Ph.D. in Business Administration at Laval University's Business School in Canada, in 2009. He holds since 2020 a habilitation degree in Applied Mathematics at the University of Bordeaux in France. His research interests relate primarily to Supply Chain design, resilience and robustness, distribution in omnichannel retailing, and hyperconnected urban logistics, with a focus on stochastic modelling and optimisation. Most of his research work is carried out in partnership with international companies. He is co-author of several international scientific and professional articles, and of an ‘award winner’ book in the field of Supply Chain, entitled ‘The Design of Value Creating Supply Chain Networks’. He is currently appointed as a research affiliate at the MIT Center for Transportation and Logistics (USA), and an affiliated faculty of the Supply Chain & Logistics Institute – Physical Internet Center - Georgia Tech (USA).
M. Zied Babai
M. Zied Babai is Senior Professor in Operations Management at Kedge Business School. He holds a PhD in Industrial Engineering from Ecole Centrale Paris (France) where he also worked as a Teaching and Research Assistant for four years. From October 2006 to September 2008, he joined the Centre for Operational Research and Applied Statistics at the University of Salford (UK), working on a project funded by the Engineering and Physical Sciences Research Council (EPSRC, UK). His research interests relate primarily to demand forecasting and inventory management with a special emphasis on the development of quantitative models. He is the Editor-In-Chief of Supply Chain Forum: An International Journal (Taylor & Francis), Area Editor of IMA Journal of Management Mathematics (Oxford Press) and Associate Editor of International Journal of Production Research (Taylor & Francis).