A technique for determining the optimum mix of logistics service providers of a make-to-order supply chain by formulating and solving a constrained nonlinear cost optimization problem

In this paper, a technique has been developed to determine the optimum mix of logistic service providers of a make-to-order (MTO) supply chain. A serial MTO supply chain with different stages/ processes has been considered. For each stage different logistic service providers with different mean processing lead times, but same lead time variances are available. A realistic assumption that for each stage, the logistic service provider who charges more for his service consumes less processing lead time and vice-versa has been made in our study. Thus for each stage, for each service provider, a combination of cost and mean processing lead time is available. Using these combinations, for each stage, a polynomial curve, expressing cost of that stage as a function of mean processing lead time is fit. Cumulating all such expressions of cost for the different stages along with incorporation of suitable constraints arising out of timely delivery, results in the formulation of a constrained nonlinear cost optimization problem. On solving the problem using mathematica, optimum processing lead time for each stage is obtained. Using these optimum processing lead times and by employing a simple technique the optimum logistic service provider mix of the supply chain along with the corresponding total cost of processing is determined. Finally to examine the effect of changes in different parameters on the optimum total processing cost of the supply chain, sensitivity analysis has been carried out graphically

Optimising and recognising 2-stage delivery chains with time windows

In logistic delivery chains time windows are common. An arrival has to be in a certain time interval, at the expense of waiting time or penalties if the time limits are exceeded. This paper looks at the optimal placement of those time intervals in a specific case of a barge visiting two ports in sequence. For the second port a possible delay or penalty should be incorporated. Next, recognising these penalty structures in data is analysed to if see certain patterns in public travel data indicate that a certain dependency exists

Achieving sharp deliveries in supply chains through variance pool allocation

10.1016/j.ejor.2004.08.033European Journal of Operational Research1711227-254EJOR

Achieving Sharp Deliveries in Supply Chains through Variance Pool Allocation

Variability reduction and business process synchronization are acknowledged as key to achieving sharp and timely deliveries in supply chain networks. In this paper, we develop an innovative approach that facilitates variability reduction and business process synchronization for supply chains in a highly cost effective way. The approach developed is founded on (1) an analogy between mechanical design tolerancing and supply chain lead time compression, (2) interesting use of process capability indices to measure supply chain delivery performance, and (3) a generalized notion of Motorola six sigma quality. We first illustrate a motivating example to develop an analogy between mechanical assemblies and supply chain networks. Motivated by this analogy, we define, using process capability indices, a new index of delivery performance called delivery sharpness which, when used with classical performance index delivery probability, measures the accuracy as well as the precision with which products are delivered to the customers. Next we solve the following specific problem: how to compute the allowable variability in lead time for individual stages of the supply chain so that a specified levels of the delivery sharpness and delivery probability are achieved in a cost-effective way. We call this the variance pool allocation (VPA) problem. We suggest an efficient heuristic approach for solving the VPA problem and also show that a variety of important supply chain design problems can be posed as instances of the VPA problem. One such problem, which is addressed in this paper, is the supply chain partner selection problem. We formulate and solve the VPA problem for a plastics industry supply chain and demonstrate how the solution can be used to choose the best mix of suppl..

Quantitative Model for Supply Chain Visibility: Process Capability Perspective

Currently, the intensity of enterprise competition has increased as a result of a greater diversity of customer needs as well as the persistence of a long-term recession. The results of competition are becoming severe enough to determine the survival of company. To survive global competition, each firm must focus on achieving innovation excellence and operational excellence as core competency for sustainable competitive advantage. Supply chain management is now regarded as one of the most effective innovation initiatives to achieve operational excellence, and its importance has become ever more apparent. However, few companies effectively manage their supply chains, and the greatest difficulty is in achieving supply chain visibility. Many companies still suffer from a lack of visibility, and in spite of extensive research and the availability of modern technologies, the concepts and quantification methods to increase supply chain visibility are still ambiguous. Based on the extant researches in supply chain visibility, this study proposes an extended visibility concept focusing on a process capability perspective and suggests a more quantitative model using Z score in Six Sigma methodology to evaluate and improve the level of supply chain visibility

Production, Manufacturing and Logistics Achieving sharp deliveries in supply chains through variance pool allocation

Variability reduction and business process synchronization are acknowledged as key to achieving sharp and timely deliveries in supply chain networks. In this paper, we develop an approach that facilitates variability reduction and business process synchronization for supply chains in a cost effective way. The approach developed is founded on an analogy between mechanical design tolerancing and supply chain lead time compression. We first present a motivating example to describe this analogy. Next, we define, using process capability indices, a new index of delivery performance called delivery sharpness which, when used with the classical performance index delivery probability, measures the accuracy as well as the precision with which products are delivered to the customers. Following this, we solve the following specific problem: how do we compute the allowable variability in lead time for individual stages of the supply chain so that specified levels of delivery sharpness and delivery probability are achieved in a cost-effective way? We call this the variance pool allocation (VPA) problem. We suggest an efficient heuristic approach for solving the VPA problem and also show that a variety of important supply chain design problems can be posed as instances of the VPA problem. One such problem, which is addressed in this paper, is the supply chain partner selection problem. We formulate and solve the VPA problemfor a plastics industry supply chain and demonstrate how the solution can be used t

Construcción de una metodología macro para la determinación y clasificación de los criterios cualitativos en la cadena de abastecimiento

Ingeniero (a) IndustrialPregrad

Supply chain design: a conceptual model and tactical simulations

In current research literature, supply chain management (SCM) is a hot topic breaching the boundaries of many academic disciplines. SCM-related work can be found in the relevant literature for many disciplines. Supply chain management can be defined as effectively and efficiently managing the flows (information, financial and physical) in all stages of the supply chain to add value to end customers and gain profit for all firms in the chain. Supply chains involve multiple partners with the common goal to satisfy customer demand at a profit. While supply chains are not new, the way academics and practitioners view the need for and the means to manage these chains is relatively new. Very little literature can be found on designing supply chains from the ground up or what dimensions of supply chain management should be considered when designing a supply chain. Additionally, we have found that very few tools exist to help during the design phase of a supply chain. Moreover, very few tools exist that allow for comparing supply chain designs. We contribute to the current literature by determining which supply chain management dimensions should be considered during the design process. We employ text mining to create a supply chain design conceptual model and compare this model to existing supply chain models and reference frameworks. We continue to contribute to the current SCM literature by applying a creative application of concepts and results in the field of Stochastic Processes to build a custom simulator capable of comparing different supply chain designs and providing insights into how the different designs affect the supply chain’s total inventory cost. The simulator provides a mechanism for testing when real-time demand information is more beneficial than using first-come, first-serve (FCFS) order processing when the distributional form of lead-time demand is derived from the supply chain operating characteristics instead of using the assumption that lead-time demand distributions are known. We find that in many instances FCFS out-performs the use of real-time information in providing the lowest total inventory cost