The influence of the network topology on the agility of a supply chain

Abstract: The right performance of a supply chain depends on the pattern of relationships among firms. Although there is not a general consensus among researchers yet, many studies point that scale-free topologies, where few highly related firms are combined with many low-related firms, assure the highest efficiency of a supply chain. This paper studies the network topology that leads to the highest agility of the supply chain when sudden demand changes occur. To do this, an agent-based model of a supply chain with restricted relationship between agents is built. The model includes three tiers, where the flow of material is distributed from the bottom supplier to the final customer passing necessarily through firms in every tier. Agility is measured in the model simulations through the order fulfillment rate. Unlike to previous theoretical and lab results, the simulation of the model shows that the highest levels of agility are not obtained with a scale-free topology. Instead, homogeneous distribution of links, such as those induced by regular or Poisson probability laws, shows higher agility values than heterogeneous distributions. Other previous recommendations, such as redundancy or having multiple suppliers, are confirmed by the simulations. The general conclusion is that the most suitable network topology in terms of agility depends on the specific conditions of the supply chain and the aspects of the performance to be analyzed.