Cities can benefit from complex supply chains

Date:
April 19, 2023
Source:
Penn State
Summary:
During the early days of the pandemic, consumers faced shortages
and abrupt price increases on common goods ranging from toilet
paper and coffee to bicycles and lumber. While the complexity
of supply chains may contribute to the problem in some cases,
researchers found that complex and diverse supply chains may
actually protect cities from shortages under stress.


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FULL STORY ========================================================================== During the early days of the pandemic, consumers faced shortages and
abrupt price increases on common goods ranging from toilet paper and
coffee to bicycles and lumber. While the complexity of supply chains may contribute to the problem in some cases, Penn State researchers found
that complex and diverse supply chains may actually protect cities from shortages under stress.

They published their work in Urban Sustainability,

========================================================================== "Longstanding research has found that if supply chains get too complex,
they can become problematic," said corresponding author Alfonso Mejia, associate professor of civil and environmental engineering. "But the
opposite tends to be true in nature: In ecological systems, there is
a well-known connection between complexity and resiliency." Diversity increases complexity, which is a good thing in nature, Mejia said.

The diversity of an ecosystem -- having many species that can do various
tasks -- makes that system less vulnerable in the face of wildfires,
floods and other natural disasters.

"The redundancy of multiple species doing the same things in different
ways enables an ecosystem to better respond to shocks," Mejia said. "If
one goes away, the other can continue. We believed that what we learn
from nature could be applied to human systems." The researchers began
looking at supply chains from that perspective, examining whether the complexity of a diverse supply chain -- one that sources products from
many different suppliers -- makes a city more resilient.

With nature as inspiration, Mejia and his team examined 2012-15 data
from the U.S. Departments of Transportation and Energy that showed the
movement of goods from 39 product categories across 69 major U.S. cities.

The researchers developed an algorithm to analyze the impact of two
measures of complexity in this movement of supplies: the diversity of
sources needed for a product and the volume of that product coming into
the city. Using a machine learning algorithm and regression models, they compressed the large datasets and identified key patterns to predict
the risk of supply shortages in cities experiencing shock.

"We found that complexity can be a good thing," Mejia said. "Cities with diverse supply chains -- sources from a broad range of domestic and
global suppliers -- appear to be better protected against shocks and
experience less- intense shortages." The researchers found that the
potential for benefits from complexity is most evident in medium-size
cities with populations of 100,000-500,000 people.

"Large cities like New York and Chicago, just by being large and having
less dependency on specific supply partners, are less affected by supply
chain interruptions," Mejia said. "But medium cities are hurt by a lack
of diversity when sourcing the supplies they need." Mejia said he plans
to test the model with data from more cities over a longer timeframe of
pre- and post-pandemic years.

Penn State, the National Science Foundation and The Ministry of National Education of Turkey supported this work.

* RELATED_TOPICS
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========================================================================== Story Source: Materials provided by Penn_State. Original written by Mary Fetzer. Note: Content may be edited for style and length.


========================================================================== Journal Reference:
1. Nazlı B. Doğan, Alfonso Mejia, Michael Gomez. Cities can
benefit from complex supply chains. npj Urban Sustainability,
2023; 3 (1) DOI: 10.1038/s42949-023-00100-5 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2023/04/230419125116.htm

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