Abstract for: A System Dynamics Model for Supply Chain Risk Assessment in Power Plants
Risk assessment is a strategic approach for building resilient supply chains. In case of a critical hazard actually occurring, the operations of an organisation could be dramatically disturbed, affecting product or service delivery, increasing costs, reducing profitability and damaging organisation’s reputation. These could also have a long-term impact on the strategic long-term organisational performance. Furthermore, critical risks may not exist in isolation. It is possible to identify cause and effect interrelationships among those risks, increasing the complexity of the problem to assess their impact on performance. It is also important to consider the nature of a dynamic business environment, in which risk assessment may also change with time. This is the case of the energy sector. This paper presents the development of a System Dynamics model to assess risks affecting supply chain performance in power plants. The risk assessment model was validated through two case studies of power plants in the Middle East. The developed risk assessment model allowed to understand the long-term effect of risks on three key performance indicators: availability, efficiency, and operational and maintenance costs of power plants. The model provides a novel approach for risk assessment through the integration of a System Dynamics modelling methodology.