Applying system dynamics modelling to building resilient logistics : a case of the Humber Ports Complex

• Main Author: Buor, John Kwesi
• Published: University of Hull 2015
• Subjects: 658; Business
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.676686

This research employs system dynamics modelling to analyse the structural behaviour of the interactions between Disaster Preparedness, Environment Instability, and Resilience in maritime logistics chain as a response to policy change, or strategic risk management interventions, at ports on the Humber Estuary. Port authorities, logistics operators, agencies, transporters, and researchers have revealed that disasters lead to interruptions in free flow of supply chains, and has the potential to disrupt the overall performance of a logistics chain. There is strong evidence about the rise in frequency, magnitude, and disruption potentials of catastrophic events in recent times (e.g. 9/11 attack, the Japanese earthquake/Tsunami and the aftermath nuclear disaster, Hurricanes Katrina and Haiyan, Super Storm Sandy, and many more). However, it appears that risk managers are not able to anticipate the outcomes of risk management decisions, and how those strategic interventions can affect the future of the logistics chain. Management appears to misjudge (or miscalculate) risks, perhaps due to the assumed complexity, the unpredictability of associated disruptions, and sometimes due to individual managerial approach to risk management. The uncertainties and states assumed notwithstanding, investors and regulators have become increasingly intolerant for risk mismanagement. Shipowners and port authorities tend to managing cost instead of managing risk. Hence they appear to invest little time and fewer resources in managing disruptions in their logistics chains even though they seem to frequently conduct risk assessments. We suggest that disaster preparedness that leads to resilience in maritime logistics chain is the best alternative to preventing or reducing the impacts of disruptions from catastrophes. We aim at improving current level of understanding the sources of disruptions in port/maritime logistics system through analysing the interdependencies between key variables. The dynamic models from this research have revealed that there is strong influence relationships (interdependencies) between Disaster Preparedness, Environment Instability, and Resilience. We found that potential sources of disruptions along the spokes of maritime logistics system can be port physics related, however the subtle triggering factors appear to be port size related. We also found that policy interventions geared towards risk management have the potential to produce unintended consequences basically due to unacknowledged conditions. Thus the relevance of the research and the SD models was to provide strategic policy makers with real-time decision evaluation tool that can provide justification for acceptance or rejection of a risk management intervention prior to decision implementation.