Decision support system for distributed manufacturing based on input-output analysis and economic complexity

TL;DR

This paper presents a decision support system leveraging input-output analysis and economic complexity to recommend local suppliers and facilitate productive jumps, enhancing territorial industrial resilience amid supply disruptions.

Contribution

It introduces a novel recommender system that combines product space proximity and input-output data to promote distributed manufacturing and identify substitute suppliers.

Findings

The system effectively identifies local suppliers and substitutes based on product proximity.

Application to French data demonstrates potential to enhance industrial resilience.

The approach offers new insights into territorial productive capabilities.

Abstract

The disruption of supplies during the Covid-19 crisis has led to shortages but has also shown the adaptability of some companies, which have succeeded in adapting their production chains quickly to produce goods experiencing shortages: hydroalcoholic gel, masks, and medical gowns. These productive jumps from product A to product B are feasible because of the know-how proximity between the two classes of products. The proximities were computed from the analysis of co-exports and resulted in the construction of the product space. Based on the product space, as well as the customer-supplier relationships resulting from the input-output matrices, we propose a recommender system for companies. The goal is to promote distributed manufacturing by recommending a list of local suppliers to each company. As there is not always a local supplier for a desired product class, we consider the proximity between products to identify, in the absence of a supplier, a substitute supplier able to adapt its production tools to provide the required product. Our experiments are based on French data, from which we build a graph of synergies illustrating the potential productive links between companies. Finally, we show that our approach offers new perspectives to determine the level of territories' industrial resilience considering potential productive jumps.