Collaboration and coordination strategies for a multi-level AI-enabled healthcare supply chain under disaster

ABSTRACTArtificial Intelligence (AI)-based applications have been rising across the healthcare supply chain. Successful AI implementation requires proper collaboration among healthcare supply chain members. However, high investment associated with AI innovation often impedes collaboration. In this context, disruption caused by the disasters like pandemics and epidemics can add more complexity. This issue has not received substantial scholarly attention. Here, we design a multi-level AI-enabled healthcare supply chain by incorporating a three-level supply chain structure with a healthcare product manufacturer, a distributor, and a procurement agency, where the manufacturer and distributor invest in AI innovation. Here, we adopt wholesale price (W) and cost-sharing (C) contracts-based mechanisms considering four scenarios WW, WC, CW, and CC, to devise the three-level AI-enabled healthcare supply chain members' collaboration and coordination strategies with and without disruption. Adopting a Stackelberg game-theoretic approach, we determine the supply chain members' optimal AI innovation efforts, prices, and profits for all scenarios. We demonstrate the dominance of one scenario over other for the supply chain members' decisions and profits and propose a scenario ranking framework. We also investigate the impact of the disruption cost-sharing between the manufacturer and retailer, the disruption probabilities, and AI innovation success on the supply chain decisionsKEYWORDS: Artificial intelligencedisruptionmulti-level supply chaincoordination strategycost sharing contract Disclosure statementNo potential conflict of interest was reported by the author(s).Data availability statementData sharing is not applicable to this article as no new data were created or analysed in this study.Notes1 https://www.businesstoday.in/technology/story/heres-why-indian-diagnostic-companies-are-investing-heavily-in-ai-powered-platforms-340546-2022-07-06.2 https://www.thehindubusinessline.com/economy/logistics/start-ups-enter-vaccine-supply-business/article34350240.ece.3 https://www.astellas.com/en/system/files/news/2018-06/080425_eg.pdf.4 https://www.sec.gov/Archives/edgar/data/1011835/000119312512463360/R9.htm.5 https://birac.nic.in/desc_new.php?id=216.6 https://www.tortoisemedia.com/intelligence/global-ai/.7 https://www.novartis.com/sites/novartis_com/files/novartis-pipeline-2022-annual-report.pdf.8 https://www.novartis.com/stories/machine-learning-poised-accelerate-drug-discovery.9 https://vamstar.io/my-resources/hospitals-ai-innovative-medtech-advances-healthcare-treatment/.10 https://www.zawya.com/en/press-release/companies-news/vamstar-closes-95mln-series-a-to-expand-ai-based-global-healthcare-supply-chain-platform-i1f5cbew.11 https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/rapidly-forecasting-demand-and-adapting-commercial-plans-in-a-pandemic, https://www.ema.europa.eu/en/human-regulatory/overview/public-health-threats/coronavirus-disease-covid-19/availability-medicines-during-covid-19-pandemic.12 https://www.sandoz.com/news/sandoz-responds-increased-demand-antibiotics-and-other-essential-medicines-patients-during-covid-19.13 https://www.nature.com/articles/s42256-020-00238-2.Additional informationNotes on contributorsArnab AdhikariArnab Adhikari is an Assistant Professor in operations management area of the Indian Institute of Management Ranchi (IIM Ranchi). He has completed his Ph.D. in operations management from the Indian Institute of Management Calcutta. His research articles have appeared in the several reputed international journals such as Decision Sciences Journal, European Journal of Operational Research, Transportation Research Part E; Logistics and Transportation Review, Information & Management, International Journal of Production Research, Annals of Operations Research, Journal of Retailing and Consumer Services, Journal of Enterprise Information Management, Informs Transactions on Education, etc. His research interest includes economic modelling in operations management, supply contracts and coordination strategy design, event studies, etc.Raunak JoshiRaunak Joshi is an Assistant Professor at Jindal Global Business School, O.P. Jindal Global University, India. He completed his Ph.D. in Operations Management from the Indian Institute of Management Calcutta. His work has been published in the International Journal of Production Economics and Decision Sciences Journal. He has presented his work at international conferences like INFORMS Revenue Management and Pricing Conference, INFORMS Annual Meeting, POMS Conference, and DSI Conference.Sumanta BasuSumanta Basu is a Professor in the Operations Management Department at the Indian Institute of Management Calcutta. He received his doctorate in Production and Quantitative Methods from the Indian Institute of Management Ahmedabad. Sumanta has six years of work experience in IT consulting and in supply chain. He has three US patents on process optimisation during his stint in the industry. He works in the area of healthcare operations, revenue management, pricing of information goods, economic analysis of interactions in supply chain, optimisation etc. His research articles have appeared in DSJ, EJOR, DSS, IJPE, OMEGA, IJPR, JRCS, INFOR and a few other scholarly journals.