Disruption-resilient multi-echelon supply chains: a model integrating carbon emissions and social welfare investments

In today's complex, multi-echelon supply chain (SC) management landscape, the timely production and delivery of goods while upholding environmental sustainability and adhering to delivery schedules is a critical priority. Supply chain disruptions, such as the COVID-19 pandemic and the 2022 floods in Australia, pose significant challenges to the transportation sector and production processes. These events underscore the need for resiliency in SC design. Our model tackles these challenges using a mathematical framework that captures production disruptions, imperfections, and carbon emissions. The proposed model captures complexities, such as adjusting production speed and shipments under sequential disruptions, while maintaining delivery commitments. Manufacturers adjust production speeds to match third party logistics (3PL) schedules amid disruption variability, while 3PLs adapt shipment quantities to retailer demand during transportation disruptions, helping reduce carbon emissions. The supply chain allocates resources toward social welfare investments to offset environmental impacts from operations. This not only mitigates the societal impacts but also enables firms to benefit from tax rebates as incentives for environmental responsibility (without social investment, total integrated profit decreases by 1.292% (N=1,Nt=4)). Our approach jointly addresses production and transportation disruptions previously studied in isolation, providing strategic insights for enhancing SC resilience, fulfilling customer demand, and achieving sustainability objectives.