Robust design of flexible supply chains with mobile and modular facilities

Abstract Modular manufacturing is increasingly being adopted by the chemical industry in applications where resource availability and product demand are highly distributed and uncertain. Modular plants are often built such that they can be easily relocated. Recent works have investigated how such mobility can increase flexibility at the supply chain level; however, we are lacking rigorous yet intuitive metrics for quantifying that flexibility. In this work, we develop a framework for the design of supply chains with mobile and modular facilities, where the uncertainty is described by an uncertainty set whose size can be adjusted using two flexibility indices that capture the spatial dissimilarity and temporal shift in demand. The resulting two‐stage robust optimization problem with mixed‐integer recourse is solved using an enhanced nested column‐and‐constraint generation algorithm. Through computational experiments, we examine the impact of the required level of flexibility on the supply chain design and the value of module mobility.