Inventory control in supply chains: Alternative approaches to a two-stage lot-sizing problem

The principal challenge of inventory control in supply chains is that the interacting autonomous enterprises have to plan their production and logistics under information asymmetry, driven by different, often conflicting objectives. In this paper, four different computational approaches are investigated to cope with this challenge: decomposition, integration, coordination, and bilevel programming. The four approaches are applied to solving the same two-stage economic lot-sizing problem, and compared in computational experiments. The prerequisites of the approaches are analyzed, and it is shown that the profits realized and the costs incurred at the different parties largely depend on the solution approach applied. This research also resulted in a novel coordination mechanism, as well as a new algorithm for the bilevel optimization approach to the investigated lot-sizing problem. A specific goal of this study is to highlight the so far less recognized application potential of the coordination and the bilevel optimization approaches for controlling inventories in a supply chain. © 2012 Elsevier B.V. All rights reserved

Coordination mechanisms with mathematical programming models for decentralized decision-making, a literature review

[EN] The increase in the complexity of supply chains requires greater efforts to align the activities of all its members in order to improve the creation of value of their products or services offered to customers. In general, the information is asymmetric; each member has its own objective and limitations that may be in conflict with other members. Operations managements face the challenge of coordinating activities in such a way that the supply chain as a whole remains competitive, while each member improves by cooperating. This document aims to offer a systematic review of the collaborative planning in the last decade on the mechanisms of coordination in mathematical programming models that allow us to position existing concepts and identify areas where more research is needed.Rius-Sorolla, G.; Maheut, J.; Estelles Miguel, S.; García Sabater, JP. (2020). Coordination mechanisms with mathematical programming models for decentralized decision-making, a literature review. 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The paper discusses how the lean concept could be applied to a food-manufacturing company. The paper first presents the lean concept and value-stream mapping tools. The empirical section discusses how a case company, operating as a contract manufacturer in the food industry, has applied the lean production concept and tools. In the case study, three analysis tools are examined and the structures of demand chains of different customers are presented. The delivery times will decrease and more flexibility will be needed from the contract manufacturer. The case study shows that much movement is possible toward the lean supply chain and partnership-based cooperation. By implementing the lean concept, food companies can increase customer value through cost reduction or through provision of additional value-enhanced services.Agribusiness,

Balancing Demand and Supply in Complex Manufacturing Operations: Tactical-Level Planning Processes

By balancing medium-term demand and supply, tactical planning enables manufacturing firms to realize strategic, long-term business objectives. However, such balancing in engineer-to-order (ETO) and configured-to-order (CTO) operations, due to the constant pressure of substantial complexity (e.g., volatility, uncertainty, and ambiguity), induces frequent swings between over- and undercapacity and thus considerable financial losses. Manufacturers respond to such complexity by using planning processes that address the business’s needs and risks at various medium-term horizons, ranging from 3 months to 3 years. Because the importance of decision-making increases exponentially as the horizon shrinks, understanding the interaction between complexity and demand-supply balancing requires extending findings reported in the literature on operations and supply chain planning and control. Therefore, this thesis addresses complexity’s impact on planning medium-term demand-supply balancing on three horizons: the strategic– tactical interface, the tactical level, and the tactical–operational interface.To explore complexity’s impact on demand–supply balancing in planning processes, the thesis draws on five studies, the first two of which addressed customer order fulfillment in ETO operations. Whereas Study I, an in-depth single-case study, examined relevant tactical-level decisions, planning activities, and their interface with the complexity affecting demand–supply balancing at the strategic–tactical interface, Study II, an in-depth multiple-case study, revealed the cross-functional mechanisms of integration affecting those decisions and activities and their impact on complexity. Next, Study III, also an in-depth multiple-case study, investigated areas of uncertainty, information-processing needs (IPNs), and information-processing mechanisms (IPMs) within sales and operations planning in ETO operations. By contrast, Studies IV and V addressed material delivery schedules (MDSs) in CTO operations; whereas Study IV, another in-depth multiple-case study, identified complexity interactions causing MDS instability at the tactical–operational interface, Study V, a case study, quantitatively explained how several factors affect MDS instability.Compiling six papers based on those five studies, the thesis contributes to theory and practice by extending knowledge about relationships between complexity and demand–supply balancing within a medium-term horizon. Its theoretical contributions, in building upon and supporting the limited knowledge on tactical planning in complex manufacturing operations, consist of a detailed tactical-level planning framework, identifying IPNs generated by uncertainty, pinpointing causal and moderating factors of MDS instability, and balancing complexity-reducing and complexity-absorbing strategies, cross-functional integrative mechanisms, IPMs, and dimensions of planning process quality. Meanwhile, its practical contributions consist of concise yet holistic descriptions of relationships between complexity in context and in demand– supply balancing. Manufacturers can readily capitalize on those descriptions to develop and implement context-appropriate tactical-level planning processes that enable efficient, informed, and effective decision-making

Proceedings of the third International Workshop of the IFIP WG5.7

Contents of the papers presented at the international workshop deal with the wide variety of new and computer-based techniques for production planning and control that has become available to the scientific and industrial world in the past few years: formal modeling techniques, artificial neural networks, autonomous agent theory, genetic algorithms, chaos theory, fuzzy logic, simulated annealing, tabu search, simulation and so on. The approach, while being scientifically rigorous, is focused on the applicability to industrial environment

Coordination and synchronization of material flows in supply chains: an analytical approach.

The coordination of joint material flows is a key element in supply chain management. Although analytical models for the coordination of materials are of great practical value, literature analyzing them remains scarce. This article contributes to this gap by studying a generic supply chain model. The supply chain is assumed to have a single production facility that is supplied by two independent suppliers. The field of combinatorics serves as a means to derive exact results for important performance measures, and the results suggest insights related to several supply chain management principles.Assembly; Synchronization; Coordination; Supply chain; Combinatorics;