Topological Approach for Modelling the Structure, Dynamics and Robustness of Supply Chain Networks

Abstract

Traditionally simple and linear supply chains have, in recent years, evolved towards highly complex networked systems, due to globalisation and product specialisation. Recent application of network models to supply chain systems have revealed the existence of non-trivial and universal topological footprints, which provide important system level insights. This thesis uses topological network models to investigate the structure, dynamics and robustness of supply chain networks (SCNs). Firstly, the common topological characteristics of real-world SCNs are identified, by considering both undirected inter-firm relationship and directed material flow SCNs. Based on this analysis, it is evident that the number of firm-level connections in each SCN follow the power law distribution with power law exponents in the range of 1.5 - 3.5. A fitness-based growth model is then presented to simulate such topologies. The mechanism through which this growth model operates is justified on the basis of risk averse firm behaviour. The second half of this thesis is concerned with the role of SCN topology on the evolution of cooperation and robustness. It is found that the SCN topology, the level of rationality of firms and the relative payoff differences are all essential elements in the evolution of co-operation when strategic inter-firm interactions in an SCN are represented as Prisoner Dilemma games. Finally, a novel methodology to quantify and improve the robustness of material flow SCNs is presented. Here, the specific case of a material flow SCN with multi-sourcing, which is characterised by a tiered structure with directed and weighted links, is considered. An indicative robustness metric is proposed to characterise the robustness of the SCN, considering the degree to which supply chains overlap with each other. Since this model incorporates information beyond the topology of the SCN, it is a useful tool for decision making by the practitioners.