Designing a Resilient and Sustainable Logistics Network under Epidemic Disruptions and Demand Uncertainty

To face the new challenges caused by modern industry, logistics operations managers need to focus more on integrating sustainability goals, adapt to unexpected disruptions and find new strategies and models for logistics management. The COVID-19 pandemic has proven that unforeseen fragilities, negatively affecting the supply chain performance, can arise rapidly, and logistics systems may confront unprecedented vulnerabilities regarding network structure disruption and high demand fluctuations. The existing studies on a resilient logistics network design did not sufficiently consider sustainability aspects. In fact, they mainly addressed the independent planning of decision-making problems with economic objectives. To fill this research gap, this paper concentrates on the design of resilient and sustainable logistics networks under epidemic disruption and demand uncertainty. A two-stage stochastic mixed integer programming model is proposed to integrate key decisions of location–allocation, inventory and routing planning. Moreover, epidemic disruptions and demand uncertainty are incorporated through plausible scenarios using a Monte Carlo simulation. In addition, two resiliency strategies, namely, capacity augmentation and logistics collaboration, are included into the basic model in order to improve the resilience and the sustainability of a logistics chain network. Finally, numerical examples are presented to validate the proposed approach, evaluate the performance of the different design models and provide managerial insights. The obtained results show that the integration of two design strategies improves resilience and sustainability.

Mathematical model of structural and topological optimization of logistics networks

The subject of research in the article is the topological structures of closed-loop logistics networks. The goal of the article is to increase the efficiency of centralized logistics networks by developing a mathematical model for a two-criteria problem of optimizing topological structures in the process of their reengineering. The article solves the following tasks: analysis of the current state of the problem of structural and topological optimization of logistics networks; formalization of the problem of optimization of logistics networks as geographically distributed objects; synthesis of objective functions of the mathematical model of a two-criterion optimization problem for centralized three-level topological structures of closed logistics networks at the reengineering stage; development of a system of constraints of the mathematical model of the problem of optimizing centralized three-level topological structures of closed logistics networks; a function for evaluating the overall utility of options based on the Kolmogorov-Gabor polynomial is offered. The following methods are used: methods of systems theory, methods of utility theory, optimization and operations research. The following results were obtained: the analysis of the current state of the problem of system optimization of logistics networks, mathematical models and methods for its solution was carried out; formalization of the problem of structural and topological optimization of logistics networks as geographically distributed objects; a mathematical model of a two-criterion task of reengineering of three-level topological structures of logistics networks in terms of costs and efficiency with integrated points of production and processing has been developed (originality). Conclusions: Based on the results of the analysis of the problem of optimizing the topological structures of logistics systems, it has been established that the problems of direct and reverse logistics are still considered as conditionally independent, which does not allow obtaining effective global solutions. In the context of expanding the network of consumers, changes in delivery volumes, the introduction of environmental restrictions, it is proposed to reengineer the networks, which provides for their radical redesign. The formulated statement and the developed mathematical model of a two-criterion (in terms of cost and efficiency) optimization problem for three-level topological structures for combined production and processing points will increase the efficiency of logistics networks with reverse flows by reducing the cost of reengineering (practical value).

MATHEMATICAL MODELS OF DECISION SUPPORT IN THE PROBLEMS OF LOGISTICS NETWORKS OPTIMIZATION

The subject of research in the article is the process of decision support in the problems of logistics networks optimization. The goal of the work is to develop a set of mathematical models of logistics network optimization problems to increase the efficiency of decision support systems by coordinating the interaction between automatic and interactive procedures of computer-aided design systems. The following tasks are solved in the article: review and analysis of the current state of the problem of decision support in the problems of logistics networks optimization; decomposition of the problem of decision support for the optimization of logistics networks; development of a mathematical model of the general problem of network optimization in terms of economy, efficiency, reliability and survivability; development of a set of technological mathematical models for the correct reduction of many effective options for building logistics networks for the final choice, taking into account difficult to formalize factors, knowledge and experience of the decision maker (DM). The following methods are used: systems theory, utility theory, optimization and operations research. Results. Analysis of the current state of the problem of logistics networks optimization has established the existence of the problem of correct reduction of a subset of effective options for their construction for ranking, taking into account difficult to formalize factors, as well as knowledge and experience of DM. The decomposition of the problem into tasks is performed: definition of the principles of network construction; network structure selection; determination of the topology of network elements; choice of network operation technology; determination of parameters of elements and communications (means of cargo delivery); multi criteria evaluation and selection of the best option for building a network. A mathematical model of the general problem of network optimization in terms of economy, efficiency, reliability and survivability is proposed. To coordinate the interaction between automatic and interactive network optimization procedures, it is proposed to use a combined method of ranking options, which allows you to identify and correctly reduce the subset of effective options for ranking DM. To implement the method, mathematical models of problems of the procedure of ranking options in the technologies of project decision support have been developed, which allow to combine the advantages of the technologies of the ordinalistic and cardinalistic approaches. Conclusions. The developed set of mathematical models expands the methodological bases of automation of processes of support of multi criteria decisions on optimization of logistic networks, allows to carry out correct reduction of set of effective options of their construction for the final choice taking into account factors, knowledge and experience of DM. The practical use of the proposed models and procedures will reduce the time and capacity complexity of decision support technologies, and through the use of the proposed selection procedures - to improve their quality across a variety of functional and cost indicators.

Two-Echelon Multidepot Logistics Network Design with Resource Sharing

Resource sharing within a logistics network offers an effective way to solve problems resulting from inefficient and costly operations of individual logistics facilities. However, the existing analysis of resource sharing and profit allocation is still limited. Therefore, this study aims to model resource sharing in two-echelon delivery and pickup logistics networks to improve the overall efficiency and decrease the total network operating cost. A bi-objective integer programming model is first proposed for two-echelon collaborative multidepot pickup and delivery problems with time windows (2E-CMDPDTW) to seek the minimization of operating costs and number of vehicles. Integrating a customer clustering algorithm, a greedy algorithm, and an improved nondominated sorting genetic algorithm-II (Im-NSGA-II), a hybrid method is then designed to handle the 2E-CMDPDTW model. The customer clustering and the greedy algorithms are employed to generate locally optimized initial solutions to accelerate the calculating velocity and guarantee the diversity of feasible solutions. The Im-NSGA-II combines the order crossover operation and the polynomial mutation process to find the optimal solution of the 2E-CMDPDTW. The comparative results show that the proposed hybrid method outperforms the NSGA-II and the multiobjective genetic algorithm. Furthermore, a Shapley value method is used for allocating total profits of established alliances and finding an optimal coalition sequence of the logistics facilities joining alliances based on the strictly monotonic path strategy. Finally, a case study of 2E-CMDPDTW in Chongqing China is conducted to validate the feasibility. Results indicate that this study contributes to long-term partnerships between logistics facilities within multi-echelon logistics networks in practice and contributes to the long-term sustainability of urban logistics pickup and delivery networks’ development.

The Interplay between the Physical Internet and Logistics: A Literature Review and Future Research Directions

In recent years, there is a need for new methods and frameworks for planning transport systems, improving their efficiency, and addressing globalisation and sustainability challenges. In addition, the use of existing capacities and infrastructure has raised significant issues in the transport sector. To achieve an economically, environmentally, and socially sustainable logistics ecosystem, Benoit Montreuil introduces the concept of “Physical Internet” (PI) to increase the efficiency and effectiveness of logistics networks. As a ground-breaking transportation philosophy, the PI aims to revolutionise freight and logistics transport. Moreover, the PI can enhance logistics productivity through the organisation of large-scale pooling. Similar to Digital Internet that conveys data, the PI strives to connect, synchronise, and ship regular modular containers from the point of origin to an exact destination, thereby creating robust and collaborative logistics networks. While the literature on the PI is relatively growing, there is still a lack of reviews that synthesise this knowledge body, identify current trends and gaps, and advance the research more broadly. Therefore, this study aims to investigate the potentials of the PI for the development of sustainable logistics networks. Overall, 59 studies are selected from leading academic databases and further analysed. The review findings reveal that most scholars focus on the optimisation of transport at the tactical and organisational stage while devoting little attention to the contribution of the PI to the social sustainability of logistics compared to the economic and environmental aspects.

Physical Internet and Logistics Transportation Systems of the Digital Economy

Logistics transportation systems are considered regarding development of the Physical Internet. The Physical Internet is widely defined as an open global logistics system founded on physical, digital, and operational interconnectivity, through encapsulation, interfaces, and protocols, similar to the Digital Internet [1; 2]. It is built based on standardisation of both containers for transportation of goods and the equipment intended for their handling and supply. This allows creating a practically new industry since the shipper does not specify the mode of transport, and the system works on the principles of the Digital Internet, routing containers (analogous to packages of the Digital Internet) and collecting them in the right place at the right time. The concept of the Physical Internet is aimed at implementation of full interconnectedness, in terms of data, information, physical and financial flows, of several networks of freight transportation logistics services, as well as at their readiness to be freely used as a single large logistics network. The seamless physical, digital, and financial interconnection of logistics networks will include transportation, storage, and physical handling of cargo units (containers, demountable bodies, pallets, etc) [3]. In other words, these are physical objects, and that justifies the designation of the entire system as of the Physical Internet. Naturally, such a system inevitably raises the issue of standardising such physical objects (by analogy with standardising Digital Internet packages). Hence, the term of so-called ð-containers appears associated with special unified containers for storage, handling, transportation of material objects within the Physical Internet system. Now, the Physical Internet is not a merely theoretical concept. Its implementation is being carried out in many countries. The first Russian companies have already started promoting this concept as well. The objective of the article is to review the current state of this logistics model in Russia and the world based on the analysis of the literature and practical implementations.

Blockchain Solutions for International Logistics Networks along the New Silk Road between Europe and Asia

The primary research that underpins this paper seeks to explore the applications of blockchain technology on a specific international corridor and to draw policy implications for decision makers. To analyze the bottlenecks of operating on the New Silk Road and to identify opportunities for applying the blockchain technology on this corridor, a survey was conducted among main train operators and experts working on this route. These responses provide insight into the issues related to the adoption of blockchain technology from front-line actors. The top three challenges are lack of capacities, congestion at transshipment terminals, and slow border crossing. Through the application of blockchain technology, the operators are presented with opportunities for improved accuracy in the processing of data and information, higher reliability of information flows through failure-free transfer of information, and improved traceability of supply chains through irrevocable input of status information. Currently, 50% of the respondents have started to implement blockchain applications or have an actual interest to apply blockchain solutions. For a wider implementation of blockchain solutions, business models need to be developed allowing private and permissioned access that is accepted and open for parties involved. Policy makers should facilitate these digital innovations through flexible and harmonized legal regulations on an international level.

Global Contraction and Local Strengthening of Firms’ Supply and Sales Logistics Networks in the Context of COVID-19: Evidence from the Development Zones in Weifang, China

The stagnation of multinational and cross-regional goods circulation has created significant disruptions to manufacturing supply chains due to the outbreak of the COVID-19 pandemic. To explore the impact of COVID-19 on the circulation of manufacturing industry products at different geographical scales, we drew upon a case study of development zones in the city of Weifang in China to analyze the characteristics of firms’ logistics networks in these development zones, and how these characteristics have changed since the outbreak of the COVID-19 pandemic. The data used in this study were collected from fieldwork conducted between 26 August 2020 and 15 October 2020, and included the supply originations of firms’ manufacturing sources and the sales destinations of their goods. We chose the two-mode network analysis method as our study methodology, which separates the logistics networks into supply networks and sales networks. The results show the following: First, the overall structure of firms’ logistics networks in Weifang’s development zones is characterized by localization. In the context of the COVID-19 pandemic, the local network links have further strengthened, whereas the global links have seriously declined. Moreover, the average path length of both the supply and sales logistics networks has slightly decreased, indicating the increased connectivity of the logistics networks. Second, in terms of the network node centrality, the core nodes of the supply logistics networks are the development zones and the city in which the firms are located, whereas the core nodes of the sales logistics networks are the core companies in the development zones. However, since the outbreak of the COVID-19 pandemic, the centrality of supply originations and sales destinations at the local scale has increased, whereas the centrality of supply originations and sales destinations at the global scale has decreased significantly. Third, the influencing factors of such changes include controlling personnel and goods circulation based on national boundaries and administrative boundaries, forcing the logistics networks in the development zones to shrink to the local scale. Moreover, there are differences in the scope of spatial contraction between supply logistics networks and the sales logistics networks.

Identification Conditions for the Solvability of NP-complete Problems for the Class of Pre-fractal Graphs

Modern network systems (unmanned aerial vehicles groups, social networks, network production chains, transport and logistics networks, communication networks, cryptocurrency networks) are distinguished by their multi-element nature and the dynamics of connections between its elements. A number of discrete problems on the construction of optimal substructures of network systems described in the form of various classes of graphs are NP-complete problems. In this case, the variability and dynamism of the structures of network systems leads to an "additional" complication of the search for solutions to discrete optimization problems. At the same time, for some subclasses of dynamical graphs, which are used to model the structures of network systems, conditions for the solvability of a number of NP-complete problems can be distinguished. This subclass of dynamic graphs includes pre-fractal graphs. The article investigates NP-complete problems on pre-fractal graphs: a Hamiltonian cycle, a skeleton with the maximum number of pendant vertices, a monochromatic triangle, a clique, an independent set. The conditions under which for some problems it is possible to obtain an answer about the existence and to construct polynomial (when fixing the number of seed vertices) algorithms for finding solutions are identified.