Resilient supply chains for essential perishable supplies: enhancing flexibility through multi-sourcing

This study presents a quantitative model that evaluates the impact of supplier diversification on supply chain resilience. It focuses on the supply of essential perishable products, such as vaccines, from unreliable suppliers prone to delays. An optimisation model is developed to determine the optimal supplier mix and is solved using a Particle Swarm Optimization algorithm. The model accounts for constant demand, suppliers with varying reliability levels, diverse fixed and variable costs, and delivery times subject to random delays. Due to the perishability of the products, maintaining safety stock is challenging; therefore, a quadratic penalty for stock-outs is incorporated. The study reveals that multi-sourcing can substantially reduce the total cost compared to relying on a single supplier, while also enhancing resilience. Cost savings increase with the number of suppliers, particularly when the penalty for unmet demand is high; however, the marginal benefits eventually diminish. A computational study indicates that using two suppliers instead of one can reduce expected total costs by 34.65%.