Abstract
Many real-world systems are subject to external perturbations, damages, or attacks with potentially ruinous consequences. The internal organization of a system allows it to effectively resist to such perturbations with more or less success. In this work, we study the resilience properties of the global automotive supply-chain by considering the bow-tie structure of the directed network stemming from customer-supplier relationships. Data have been retrieved by Bloomberg supply chain database between 2018 to 2020. Our analysis involves 3,323 companies connected by 11,182 trade links and spanning 135 economic sectors. Our results indicate that the size of propagation of a perturbation depends on the area of the bow-tie structure in which it initially originates. Also, it is possible to identify resistance structures within some bow-tie areas. Thus, we provide insights into the fragility and resilience of different network components and the diffusion paths of perturbations across the system. Interestingly, the level of abstraction used allows our results to generalize beyond the case in question to many systems that can be represented through directed graphs.
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Notes
- 1.
Bloomberg defines “main” as top-ranking suppliers and customers according to revenues or cost of goods sold. The number of main suppliers and customers is not the same for every company and typically is in the range of a few to twenty units.
- 2.
This approach follows Bellamy et al. [7]. They used Bloomberg’s Supply Chain Relationship Database (SPLC) to recreate a network of connections between 3,106 companies to understand how administrative environmental innovations (AEIs) relate to environmental disclosure.
- 3.
The Global Industry Classification System (GICS) consists of 11 sectors, 24 industry groups, 69 industries and 158 sub-industries, where each level is more granular than its predecessors so that, for example, an industry is a more specific definition of economic activity that an industry group (Global Industry Classification Standard (GICS®) Methodology, retrieved 7 June 2021). We collected data on sub-industries.
- 4.
According to IBISWorld, Global Car & Automobile Sales (retrieved 12 August 2021), the average size of the global automotive market over the same period was 3,690 billion USD.
- 5.
We define “tail nodes” according to their in- and out-degrees; all nodes that have a degree higher than the first quartile of the overall distribution are tail nodes. For in degree, this means that a tail node has at least five upstream edges, while for out degree the threshold of downstream edges is four.
- 6.
The lowest the measure, the better the fit.
- 7.
For the out-degree distribution, Log-normal is favored to Poisson- and Power-law at < 0.0001 significance level of the test. Also, Log-normal is favored to Poisson at < 0.0001 significance level of the test for in-degree distribution.
- 8.
Some strongly connected components may exist within other areas. In this case, however, they are only within them and therefore share part of their characteristics (see Sect. 4). Thus, we call Scc the main area, and references to any minor Scc’s will be correctly disambiguated.
- 9.
Since our network is weakly connected by construction, there are no isolated components. Also, note that the in- and out-component areas may have nodes interconnecting inside them, but it is not possible to reach any node from any other within them. The same applies to tubes and tendrils areas.
- 10.
This is in line with most extant research, such as Inoue and Todo [22]. Investigating proactive responses to shocks is an interesting topic but beyond the scope of this article. We leave it for future investigation.
- 11.
Sometimes it happens that an avalanche starting in the In zone hits some nodes belonging to Tubes, because one or more of the failed nodes in the In zone are suppliers of one or more nodes belonging to the Tubes zone. However, tubes have few nodes (see Table 3), so they are not worth discussing.
- 12.
Although, back propagations through Tubes can reach the In zone because they bypass the Scc. Frontier (which is upstream with respect to the Scc zone), but once they have reached the frontier, they cannot invade the In zone, because the nodes of this zone have at least one customer in the In zone itself or in the Scc, areas not reached by the shock.
- 13.
Again, in case it is not necessary to lose all customers to damage a node. Also, secondary Scc’s may be the core of larger resistance structures.
- 14.
The typical size of shocks for Rid is larger than that for the automotive system, because the slightly larger size of the Scc, In and Out zones.
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Flori, E., Zhu, Y., Paterlini, S., Pattarin, F., Villani, M. (2023). Spread of Perturbations in Supply Chain Networks: The Effect of the Bow-Tie Organization on the Resilience of the Global Automotive System. In: De Stefano, C., Fontanella, F., Vanneschi, L. (eds) Artificial Life and Evolutionary Computation. WIVACE 2022. Communications in Computer and Information Science, vol 1780. Springer, Cham. https://doi.org/10.1007/978-3-031-31183-3_4
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