Supply Chain Resilience for a FMCG Company

Chen Yueming

Abstract

Recently, fast-moving consumer goods companies were facing supply chain disruption due to Covid-19 pandemic. There was an urgent need to determine the resilient supply chain profile and identify the most optimal strategies for supplier selection and order allocation in the event of unplanned outages. In this paper, we incorporated cost, quality, delivery, flexibility, opportunity and risk concept to construct an analytic hierarchy process (AHP) model, which helps to evaluate various aspects of the suppliers. Next, order allocation problem of FMCG companies among multiple suppliers was analysed by developing a linear programming model under both normal situation and emergency situation. Supplier capacity, minimum order quantity, rejection rate and delivery lateness rate were used as constraints. The model is illustrated through a numerical study based on research on the case company and the result shown that by placing pre-positioned order at the backup suppliers in the event of a supply chain disruption helps to minimize economic loss due to the product shortage. Also, by avoiding out of stock on shelf could eliminate risk of losing a customer to a competitor, jeopardizing reputation and more. The model formulation and application set a future research foundation for supplier selection and order allocation under supply disruption.