Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case

• Published in: Transportation research. Part E, Logistics and transportation review Vol. 136; p. 101922
• Main Author: Ivanov, Dmitry
• Format: Journal Article
• Language: English
• Published: Netherlands Elsevier Ltd 01.04.2020
• Subjects: Coronavirus; COVID-19; Digital twin; Epidemic outbreak; Pandemic plan; Resilience; Risk management; SARS-CoV-2; Simulation; Supply chain; Supply chain; COVID-19; SARS-CoV-2; Epidemic outbreak; Coronavirus; Simulation; Digital twin; Risk management; Pandemic plan; Resilience
• ISSN: 1366-5545; 1878-5794; 1878-5794
• DOI: 10.1016/j.tre.2020.101922

•Epidemic outbreaks are a special case of supply chain (SC) risks.•We articulate the specific features of epidemic outbreaks in SCs.•We demonstrate a simulation model for epidemic outbreak analysis.•We use an example of coronavirus COVID-19 outbreak. Epidemic outbreaks are a special case of supply chain (SC) risks which is distinctively characterized by a long-term disruption existence, disruption propagations (i.e., the ripple effect), and high uncertainty. We present the results of a simulation study that opens some new research tensions on the impact of COVID-19 (SARS-CoV-2) on the global SCs. First, we articulate the specific features that frame epidemic outbreaks as a unique type of SC disruption risks. Second, we demonstrate how simulation-based methodology can be used to examine and predict the impacts of epidemic outbreaks on the SC performance using the example of coronavirus COVID-19 and anyLogistix simulation and optimization software. We offer an analysis for observing and predicting both short-term and long-term impacts of epidemic outbreaks on the SCs along with managerial insights. A set of sensitivity experiments for different scenarios allows illustrating the model’s behavior and its value for decision-makers. The major observation from the simulation experiments is that the timing of the closing and opening of the facilities at different echelons might become a major factor that determines the epidemic outbreak impact on the SC performance rather than an upstream disruption duration or the speed of epidemic propagation. Other important factors are lead-time, speed of epidemic propagation, and the upstream and downstream disruption durations in the SC. The outcomes of this research can be used by decision-makers to predict the operative and long-term impacts of epidemic outbreaks on the SCs and develop pandemic SC plans. Our approach can also help to identify the successful and wrong elements of risk mitigation/preparedness and recovery policies in case of epidemic outbreaks. The paper is concluded by summarizing the most important insights and outlining future research agenda.