Optimal supply chain strategies reduce costs and increase reliability.
The article explores how companies can manage risks in their supply chain when facing disruptions. They found that the best strategy depends on factors like how often disruptions happen and how long they last. If disruptions are rare but long, it's better to have backup suppliers or carry extra inventory. But if disruptions are frequent but short, it's more cost-effective to have some inventory and use reliable suppliers. Having a mix of strategies can be best if the unreliable supplier has limited capacity or if the company is risk-averse. Being able to switch suppliers quickly can also help reduce costs.