The impact of nonlinear dynamics on the resilience of a grocery supply chain
Purpose of this paper The resilience of supply chain replenishment systems is an performance important attribute and especially so in the retail sector where initiatives such as Efficient Consumer Response have led to lower inventory holding while attempting to maintain high levels of on shelf availability. A common approach to testing for resilience of such systems would be through simulation modelling, especially where batching of orders occurs, for example. However, with developments in non linear control theory, there is an opportunity to use more sophisticated analytical approaches to evaluate and improve resilience. The aim of this paper is to demonstrate the value of an analytical approach with empirical testing on a replenishment system used by a grocery retailer. Design/methodology/approach An Industrial Dynamics (ID) approach is used for framing and building a credible representation of the grocery retailer's replenishment system. Initially a nonlinear causal loop and block diagram representations of the actual system were developed based on empirical data collection. Mathematical analysis of the model, based on nonlinear control engineering techniques in combination with ID simulation, have been used to understand the behaviour of stock and shipment output responses in the distribution centre given step and periodic demand signals. Findings Mathematical analysis through nonlinear control theory techniques has led to insights into the dynamic behaviour of the replenishment control model. This allowed the identification of specific behavioural changes in the supply chain stock and shipment responses, which are key indicators for assessing supply chain resilience, without going through a time consuming simulation process. Transfer function and describing function analyses served as guidelines for undertaking ID simulation. Value The integrated method we have used combines to best advantage the knowledge generated via the twin approaches of non linear control systems engineering analysis plus ID simulation. This duality maximises insight into the resultant causal relationships output from these procedures and hence enables the engineering of the optimal design for a real world supply chain. The consequence is the development of a robust system based approach which brings together two mutually supportive components, simulation and non linear control theory, to enhance supply chain resilience. The approach is illustrated using data concomitantly with a comprehensive grocery supply chain case study. Research limitations/implications This research is limited to the dynamics of single echelon supply chain system. Although the electronic point of sales data and the store replenishment system have been considered in the validation process, this study has focused on analysing the resilience performance of a replenishment system only. Future research will consider a multiechelon supply chain. Practical implications