Resilience strategies in an intertwined supply network: Mitigating the vulnerability under disruption ripple effects

Abstract

Intertwined supply network (ISN) is a complex system consisting of multiple interconnected supply chains orchestrated by different focal firms. The inherent interconnectedness of an ISN makes it vulnerable to localized disruptions, which can propagate through intricate supplier-buyer relationships, causing unpredictable disruption ripple effects that exacerbate vulnerabilities. While existing literature provides valuable insights into the vulnerability of supply networks with a single focal firm, less attention has been given to ISN comprising multiple competing focal firms. This study proposes an agent-based model to simulate the diffusion of disruption ripple effects in a realistic ISN. The model is used to assess the relative effects of firms' structural and operational attributes on vulnerability and to compare the effectiveness of three mainstream resilience strategies—resistance, adaptation, and recovery—in mitigating the overall vulnerability of ISN. Furthermore, the interaction of resilience strategies initiated by different focal firms in the ISN is explored. The results suggest that focal firms should prioritize their own structural attributes and those of their neighboring firms to address vulnerabilities effectively. Moreover, focal firms can identify partners with higher reciprocity and engage in cooperation for resilience investment. This study contributes to the understanding of ISN vulnerability and provides practical insights for developing effective resilience strategies in complex supply networks.