Supply Chain Recovery Strategies for High Demand Products Based on the Impact of Capacity and Transportation Disruptions

Abstract

The outbreak of the COVID-19 has had a huge impact on the manufacturing supply chain, especially the supply chain of high-demand products, and is mainly reflected in the double interruption of production capacity and transportation. The research aims to use system dynamics to explore how government subsidies can play a role in supply chain recovery when government subsidies are limited, which provides a new idea for improving supply chain management. In order to explore the impact of government subsidy strategies on supply chain recovery in the context of supply chain disruptions, this paper takes high-demand products during the epidemic as the research object, and takes the government’s subsidy choices under the impact of production capacity and transportation disruptions as the entry point for recovery strategies. The cumulative total profit of chain members is used as a judgment indicator, and systems dynamics is used to conduct modeling and simulation to build a secondary supply chain for manufacturers and distribution centers and simulate eight scenarios of different levels of production capacity and transportation interruptions, clarifying the impact of government subsidies on supply the impact of chain recovery. The research results show that, for secondary supply chains, whether in the scenario of partial or complete transportation interruption, government subsidies to manufacturers make supply chain recovery more effective, government subsidies do not have an immediate recovery effect during production capacity and transportation interruptions, and that under the complete interruption of production capacity, the cumulative total value of the supply chain after increasing government subsidies has rebounded in a spiral.