Supply chain reconfiguration for new product development through risk management approach

Abstract

Nowadays, innovation is increasingly growing and the lifetime of products is decreasing. In this situation, New Product Development (NPD) is an advantage that makes it possible to survive in the competitive market. However, risks are unavoidable in NPD in any industry. Therefore, identifying, management, and mitigation of risks are considered of high significance for companies. By taking risk management into account, this study introduces a new multi-objective mathematical model for Supply Chain (SC) configuration in the presence of a new product. The considered SC is multi-echelon, multi-resource, multi-period, and multi-product. In order to manage the risk in this SC, appropriate mitigation strategies were chosen among various risk response strategies considering their cost and effectiveness. Furthermore, inuence of each choice on SC was accounted for in the mathematical model. The assumed model explored the optimum tactical and operational Supply Chain Management (SCM) decisions. The ability of the model was assessed by solving a numerical example. The result showed that the choice of various response strategies as well as new product production inuenced SC configuration.