DESIGN OF COOPERATIVE PROCESSES IN A CUSTOMER-SUPPLIER RELATIONSHIP: AN APPROACH BASED ON SIMULATION AND DECISION THEORY

Performance improvement in supply chains, taking into account customer demand in the tactical planning process is essential. It is more and more difficult for the customers to ensure a certain level of demand over a medium term horizon as their own customers ask them for personalisation and fast adaptation. It is thus necessary to develop methods and decision support systems to reconcile the order and book processes. In this context, this paper intends firstly to relate decision under uncertainty and the industrial point of view based on the notion of risk management. This serves as a basis for the definition of an approach based on simulation and decision theory that is dedicated to the design of cooperative processes in a customer-supplier relationship. This approach includes the evaluation, in terms of risk, of different cooperative processes using a simulation-dedicated tool. The evaluation process is based on an exploitation of decision theory concepts and methods. The implementation of the approach is illustrated on an academic example typical of the aeronautics supply chain.supply chain, simulation, cooperation, decision theory, risk

COOPERATION SUPPORT IN A DYADIC SUPPLY CHAIN

To improve the supply chains performance, taking into account the customer demand in the tactical planning process is essential. It is more and more difficult for the customers to insure a certain level of demand over a medium term period. Then it is necessary to develop methods and decision support systems to reconcile the order and book processes. In this context, this paper aims at introducing a collaboration support tool and methodology dedicated to a dyadic supply chain. This approach aims at evaluating in term of risks different demand management strategies within the supply chain using a simulation dedicated tool. The evaluation process is based on an exploitation of decision theory and game theory concepts and methods.supply chain ; simulation ; collaboration ; decision theory ; risk

On multi-stage production/inventory systems under stochastic demand

This paper was presented at the 1992 Conference of the International Society of Inventory Research in Budapest, as a tribute to professor Andrew C. Clark for his inspiring work on multi-echelon inventory models both in theory and practice. It reviews and extends the work of the authors on periodic review serial and convergent multi-echelon systems under stochastic stationary demand. In particular, we highlight the structure of echelon cost functions which play a central role in the derivation of the decomposition results and the optimality of base stock policies. The resulting optimal base stock policy is then compared with an MRP system in terms of cost effectiveness, given a predefined target customer service level. Another extension concerns an at first glance rather different problem; it is shown that the problem of setting safety leadtimes in a multi-stage production-to-order system with stochastic lead times leads to similar decomposition structures as those derived for multi-stage inventory systems. Finally, a discussion on possible extensions to capacitated models, models with uncertainty in both demand and production lead time as well as models with an aborescent structure concludes the paper

Design of Cooperative Processes in a Customer-Supplier Relationship: An Approach Based on Simulation and Decision Theory

Performance improvement in supply chains, taking into account customer demand in the tactical planning process is essential. It is more and more difficult for the customers to ensure a certain level of demand over a medium term horizon as their own customers ask them for personalisation and fast adaptation. It is thus necessary to develop methods and decision support systems to reconcile the order and book processes. In this context, this paper intends firstly to relate decision under uncertainty and the industrial point of view based on the notion of risk management. This serves as a basis for the definition of an approach based on simulation and decision theory that is dedicated to the design of cooperative processes in a customer-supplier relationship. This approach includes the evaluation, in terms of risk, of different cooperative processes using a simulation-dedicated tool. The evaluation process is based on an exploitation of decision theory concepts and methods. The implementation of the approach is illustrated on an academic example typical of the aeronautics supply chain.Comment: Soumis et accept\'e \`a EAAI en attente publicatio

The capacitated multi-echelon inventory system with serial structure. 1. The 'push ahead'-effect

This paper considers a multi-echelon, periodic review inventory model with discrete demand. We assume finite capacities on various production/order sizes and backordering of excess demand. We show that under the average cost criterion the optimal order strategy may be characterized by a so-called 'push ahead'-effect. Further we shall find that a modified base-stock policy approximates the optimal policy quite well

Global supply chains of high value low volume products

Imperial Users onl

Proactive management of uncertainty to improve scheduling robustness in proces industries

Dinamisme, capacitat de resposta i flexibilitat són característiques essencials en el desenvolupament de la societat actual. Les noves tendències de globalització i els avenços en tecnologies de la informació i comunicació fan que s'evolucioni en un entorn altament dinàmic i incert. La incertesa present en tot procés esdevé un factor crític a l'hora de prendre decisions, així com un repte altament reconegut en l'àrea d'Enginyeria de Sistemes de Procés (PSE). En el context de programació de les operacions, els models de suport a la decisió proposats fins ara, així com també software comercial de planificació i programació d'operacions avançada, es basen generalment en dades estimades, assumint implícitament que el programa d'operacions s'executarà sense desviacions. La reacció davant els efectes de la incertesa en temps d'execució és una pràctica habitual, però no sempre resulta efectiva o factible. L'alternativa és considerar la incertesa de forma proactiva, és a dir, en el moment de prendre decisions, explotant el coneixement disponible en el propi sistema de modelització.Davant aquesta situació es plantegen les següents preguntes: què s'entén per incertesa? Com es pot considerar la incertesa en el problema de programació d'operacions? Què s'entén per robustesa i flexibilitat d'un programa d'operacions? Com es pot millorar aquesta robustesa? Quins beneficis comporta? Aquesta tesi respon a aquestes preguntes en el marc d'anàlisis operacionals en l'àrea de PSE. La incertesa es considera no de la forma reactiva tradicional, sinó amb el desenvolupament de sistemes proactius de suport a la decisió amb l'objectiu d'identificar programes d'operació robustos que serveixin com a referència pel nivell inferior de control de planta, així com també per altres centres en un entorn de cadenes de subministrament. Aquest treball de recerca estableix les bases per formalitzar el concepte de robustesa d'un programa d'operacions de forma sistemàtica. Segons aquest formalisme, els temps d'operació i les ruptures d'equip són considerats inicialment com a principals fonts d'incertesa presents a nivell de programació de la producció. El problema es modelitza mitjançant programació estocàstica, desenvolupant-se finalment un entorn d'optimització basat en simulació que captura les múltiples fonts d'incertesa, així com també estratègies de programació d'operacions reactiva, de forma proactiva. La metodologia desenvolupada en el context de programació de la producció s'estén posteriorment per incloure les operacions de transport en sistemes de múltiples entitats i incertesa en els temps de distribució. Amb aquesta perspectiva més àmplia del nivell d'operació s'estudia la coordinació de les activitats de producció i transport, fins ara centrada en nivells estratègic o tàctic. L'estudi final considera l'efecte de la incertesa en la demanda en les decisions de programació de la producció a curt termini. El problema s'analitza des del punt de vista de gestió del risc, i s'avaluen diferents mesures per controlar l'eficiència del sistema en un entorn incert.En general, la tesi posa de manifest els avantatges en reconèixer i modelitzar la incertesa, amb la identificació de programes d'operació robustos capaços d'adaptar-se a un ampli rang de situacions possibles, enlloc de programes d'operació òptims per un escenari hipotètic. La metodologia proposada a nivell d'operació es pot considerar com un pas inicial per estendre's a nivells de decisió estratègics i tàctics. Alhora, la visió proactiva del problema permet reduir el buit existent entre la teoria i la pràctica industrial, i resulta en un major coneixement del procés, visibilitat per planificar activitats futures, així com també millora l'efectivitat de les tècniques reactives i de tot el sistema en general, característiques altament desitjables per mantenir-se actiu davant la globalitat, competitivitat i dinàmica que envolten un procés.Dynamism, responsiveness, and flexibility are essential features in the development of the current society. Globalization trends and fast advances in communication and information technologies make all evolve in a highly dynamic and uncertain environment. The uncertainty involved in a process system becomes a critical problem in decision making, as well as a recognized challenge in the area of Process Systems Engineering (PSE). In the context of scheduling, decision-support models developed up to this point, as well as commercial advanced planning and scheduling systems, rely generally on estimated input information, implicitly assuming that a schedule will be executed without deviations. The reaction to the effects of the uncertainty at execution time becomes a common practice, but it is not always effective or even possible. The alternative is to address the uncertainty proactively, i.e., at the time of reasoning, exploiting the available knowledge in the modeling procedure itself. In view of this situation, the following questions arise: what do we understand for uncertainty? How can uncertainty be considered within scheduling modeling systems? What is understood for schedule robustness and flexibility? How can schedule robustness be improved? What are the benefits? This thesis answers these questions in the context of operational analysis in PSE. Uncertainty is managed not from the traditional reactive viewpoint, but with the development of proactive decision-support systems aimed at identifying robust schedules that serve as a useful guidance for the lower control level, as well as for dependent entities in a supply chain environment. A basis to formalize the concept of schedule robustness is established. Based on this formalism, variable operation times and equipment breakdowns are first considered as the main uncertainties in short-term production scheduling. The problem is initially modeled using stochastic programming, and a simulation-based stochastic optimization framework is finally developed, which captures the multiple sources of uncertainty, as well as rescheduling strategies, proactively. The procedure-oriented system developed in the context of production scheduling is next extended to involve transport scheduling in multi-site systems with uncertain travel times. With this broader operational perspective, the coordination of production and transport activities, considered so far mainly in strategic and tactical analysis, is assessed. The final research point focuses on the effect of demands uncertainty in short-term scheduling decisions. The problem is analyzed from a risk management viewpoint, and alternative measures are assessed and compared to control the performance of the system in the uncertain environment.Overall, this research work reveals the advantages of recognizing and modeling uncertainty, with the identification of more robust schedules able to adapt to a wide range of possible situations, rather than optimal schedules for a hypothetical scenario. The management of uncertainty proposed from an operational perspective can be considered as a first step towards its extension to tactical and strategic levels of decision. The proactive perspective of the problem results in a more realistic view of the process system, and it is a promising way to reduce the gap between theory and industrial practices. Besides, it provides valuable insight on the process, visibility for future activities, as well as it improves the efficiency of reactive techniques and of the overall system, all highly desirable features to remain alive in the global, competitive, and dynamic process environment

A comparison of two lot sizing-sequencing heuristics for the process industry

Production Models;produktie

Inventory management with advance capacity information

One of the important aspects of supply chain management is dealing with demand and supply uncertainty. The uncertainty of future supply can be reduced, if a company is able to obtain advance capacity information (ACI) on future supply/production capacity availability from its supplier. We address a periodic-review inventory system under stochastic demand and stochastic limited supply, for which ACI is available. We show that the optimal ordering policy is a state-dependent base stock policy characterized by a base stock level that is a function of ACI. We establish a link to inventory models using advance demand information (ADI) by developing a capacitated inventory system with ADI, and showing that the model is closely related to the proposed ACI model. Our numerical results reveal several managerial insights. In particular, we show that ACI is most beneficial when there exists sufficient flexibility to react to anticipated demand and supply capacity mismatches. Further, most of the benefits can be reached with only limited future visibility. We also show that the system parameters affecting the value of ACI interact in a complex way, and therefore need to be considered in an integrated manner