Effects of adaptive cooperation among heterogeneous manufacturers on supply chain viability under fluctuating demand in post-COVID-19 era: an agent-based simulation

Supply chain viability (SCV) is associated with systematic and dynamic approaches to responding to COVID-19 disruptions. The supply chain has been disturbed due to the recurrent nature of the pandemic. In the post-pandemic era, large and small- and medium-sized manufacturers have both advantages and disadvantages, complementing each other. This study proposes an agent-based model to simulate the viable situation of heterogeneous supply systems by considering three behavioural rules (i.e. cooperation establishment, win-win cooperation, and cooperation priority). The results demonstrate that the viability will be improved if large manufacturers cooperate closely with small- and medium-sized manufacturers. The viability is also associated with two adjustment parameters of production capacity, indicating that large manufacturers need to become more scalable, flexible, and adaptable to survive a rapidly changing environment. In addition, when the cooperation is more widely-connected, the viability will be higher. When facing severe fluctuations, large and small- and medium-sized manufacturers can cooperate, acting as a ‘sponge system’ to flatten the fluctuations. Finally, the simulation results of an empirical network also support this conclusion. Therefore, we suggest that a viable supply chain design should consider integrating supply resources to improve the overall viability of the supply system.