Systemic risk assessment in complex supply networks

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Ledwoch, Anna and Brintrup, Alexandra and Mehnen, Jörn and Tiwari, Ashutosh (2016) Systemic risk assessment in complex supply networks. IEEE Systems Journal. pp. 1-12. ISSN 1932-8184 (https://doi.org/10.1109/JSYST.2016.2596999)

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Abstract

The growth in size and complexity of supply chains has led to compounded risk exposure, which is hard to measure with existing risk management approaches. In this study, we apply the concept of systemic risk to show that centrality metrics can be used for complex supply network risk assessment. We review and select metrics, and set up an exemplary case applied to the material flow and contractual networks of Honda Acura. In the exemplary case study, geographical risk information is incorporated to selected systemic risk assessment metrics and results are compared to assessment without risk indicators in order to draw conclusions on how additional information can enhance systemic risk assessment in supply networks. Katz centrality is used to measure the node’s risk spread using the World Risk Index. Authority and hub centralities are applied to measure the link risk spread using distances between geographical locations. Closeness is used to measure speed of disruption spread. Betweenness centrality is used to identify high-risk middlemen. Our results indicate that these metrics are successful in identifying vulnerabilities in network structure even in simplified cases, which risk practitioners can use to extend with historical data to gain more accurate insights into systemic risk exposure.

ORCID iDs

Ledwoch, Anna, Brintrup, Alexandra, Mehnen, Jörn ORCID logoORCID: https://orcid.org/0000-0001-6625-436X and Tiwari, Ashutosh;
  • Item type:Article
    ID code:61173
    Dates:
    Date
    Event
    24 August 2016
    Published
    14 July 2016
    Accepted
    Notes:(c) 2016 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other users, including reprinting/ republishing this material for advertising or promotional purposes, creating new collective works for resale or redistribution to servers or lists, or reuse of any copyrighted components of this work in other works.
    Subjects:Social Sciences > Industries. Land use. Labor > Risk Management
    Department:Faculty of Engineering > Design, Manufacture and Engineering Management
    Depositing user: Pure Administrator
    Date deposited:29 Jun 2017 12:48
    Last modified:03 Dec 2024 03:18
    Related URLs:
    URI:https://strathprints.strath.ac.uk/id/eprint/61173
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