Optimization of the Supply Chain Network design by using scenario planning to build resilience.

Abstract

Different geopolitical tensions, economic upheavals and operational instability make the logistics network challenging to manage against disruptions. These events can make the network see an escalation in cost and resources needed, and the time to recover from these disruptions and stabilize the network. A case study of Nouryon was analyzed, identifying the freight cost and carrier’s availability as the most vulnerable area to study. The movement of stock is needed from the production sites in Sweden and France to the production site in Finland in order to cope with their demand that is going to be higher than their own production. To manage this, a cost optimization model was constructed to select the optimal allocation of each customer under 3 different scenarios to calculate the minimum total cost of the logistical network and energy consumed resulting in the flow from Sweden and France needed to the customer network in Finland. After evaluating each scenario and the costs incurred, there is a further analysis to determine the feasibility and the resources needed to execute the network changes according to the flow recommended by the optimization model in each lane.