Theory and Practice of Supply Chain Synchronization

In this dissertation, we develop strategies to synchronize component procurement in assemble-to-order (ATO) production and overhaul operations. We focus on the high-tech and mass customization industries which are not only considered to be very important to create or keep U.S. manufacturing jobs, but also suffer most from component inventory burden. In the second chapter, we address the deterministic joint replenishment inventory problem with batch size constraints (JRPB). We characterize system regeneration points, derive a closed-form expression of the average product inventory, and formulate the problem of finding the optimal joint reorder interval to minimize inventory and ordering costs per unit of time. Thereafter, we discuss exact solution approaches and the case of variable reorder intervals. Computational examples demonstrate the power of our methodology. In the third chapter, we incorporate stochastic demand to the JRPB. We propose a joint part replenishment policy that balances inventory and ordering costs while providing a desired service level. A case study and guided computational experiments show the magnitudes of savings that are possible using our methodology. In the fourth chapter, we show how lack of synchronization in assembly systems with long and highly variable component supply lead times can rapidly deteriorate system performance. We develop a full synchronization strategy through time buffering of component orders, which not only guarantees meeting planned production dates but also drastically reduces inventory holding costs. A case study has been carried out to prove the practical relevance, assess potential risks, and evaluate phased implementation policies. The fifth chapter explores the use of condition information from a large number of distributed working units in the field to improve the management of the inventory of spare parts required to maintain those units. Synchronization is again paramount here since spare part inventory needs to adapt to the condition of the engine fleet. All needed parts must be available to complete the overhaul of a unit. We develop a complex simulation environment to assess the performance of different inventory policies and the value of health monitoring. The sixth chapter concludes this dissertation and outlines future research plans as well as opportunities

Cooperation in Supply Chain Networks: Motives, Outcomes, and Barriers

This paper analyzes the phenomenon of cooperation in modern supply chains in the light of Game Theory. We first provide a discussion on the meaning of cooperation in supply chains, its motives, outcomes and barriers. We then highlighted the applicability of Cooperative Game Theory as methodology for analyzing cooperation in supply chains. Second, we review recent studies that analyze the cooperation in supply chains by means of cooperative game theory. A special emphasis will be given inventory centralizations games. Finally, gaps in the literature are identified to clarify and to suggest future research opportunities

Combined Pricing and Portfolio Option Procurement

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/90569/1/poms1255.pd

Rolling horizon policies for multi-stage stochastic assemble-to-order problems

Assemble-to-order approaches deal with randomness in demand for end items by producing components under uncertainty, but assembling them only after demand is observed. Such planning problems can be tackled by stochastic programming, but true multistage models are computationally challenging and only a few studies apply them to production planning. Solutions based on two-stage models are often short-sighted and unable to effectively deal with non-stationary demand. A further complication may be the scarcity of available data, especially in the case of correlated and seasonal demand. In this paper, we compare different scenario tree structures. In particular, we enrich a two-stage formulation by introducing a piecewise linear approximation of the value of the terminal inventory, to mitigate the two-stage myopic behavior. We compare the out-of-sample performance of the resulting models by rolling horizon simulations, within a data-driven setting, characterized by seasonality, bimodality, and correlations in the distribution of end item demand. Computational experiments suggest the potential benefit of adding a terminal value function and illustrate interesting patterns arising from demand correlations and the level of available capacity. The proposed approach can provide support to typical MRP/ERP systems, when a two-level approach is pursued, based on master production and final assembly scheduling.Comment: This is an Author's Original Manuscript of an article published by Taylor and Francis in the International Journal of Production Research on 21.11.2023, available online: https://doi.org/10.1080/00207543.2023.228357

Effective Multi-echelon Inventory Systems for Supplier Selection and Order Allocation

Successful supply chain management requires an effective sourcing strategy to counteract uncertainties in both the suppliers and demands. Therefore, determining a better sourcing policy is critical in most of industries. Supplier selection is an essential task within the sourcing strategy. A well-selected set of suppliers makes a strategic difference to an organization\u27s ability to reduce costs and improve the quality of its end products. To discover the cost structure of selecting a supplier, it is more interesting to further determine appropriate levels of inventory in each echelon for different suppliers. This dissertation focuses on the study of the integrated supplier selection, order allocation and inventory control problems in a multi-echelon supply chain. First, we investigate a non-order-splitting inventory system in supply chain management. In particular, a buyer firm that consists of one warehouse and N identical retailers procures a type of product from a group of potential suppliers, which may have different prices, ordering costs, lead times and have restriction on minimum and maximum total order size, to satisfy stochastic demand. A continuous review system that implements the order quantity, reorder point (Q, R) inventory policy is considered in the proposed model. The model is solved by decomposing the mixed integer nonlinear programming model into two sub-models. Numerical experiments are conducted to evaluate the model and some managerial insights are obtained with sensitivity analysis. In the next place, we extend the study to consider the multi-echelon system with the order-splitting policy. In particular, the warehouse acquisition takes place when the inventory level depletes to a reorder point R, and the order Q is simultaneously split among m selected suppliers. This consideration is important since it could pool lead time risks by splitting replenishment orders among multiple suppliers simultaneously. We develop an exact analysis for the order-splitting model in the multi-echelon system, and formulate the problem in a Mixed Integer Nonlinear Programming (MINLP) model. To demonstrate the solvability and the effectiveness of the model, we conduct several numerical analyses, and further conduct simulation models to verify the correctness of the proposed mathematical model

Logistics Outsourcing and 3PL Challenges

Logistics has been an important part of every economy and every business entity. The worldwide trend in globalization has led to many companies outsourcing their logistics function to Third-Party Logistics (3PL) companies, so as to focus on their core competencies. This paper attempts to broadly identify and categorize the challenges faced by 3PL companies and discover potential gaps for future research. Some of the challenges will be related with the experience and information collected from interviews with two 3PL companies.Singapore-MIT Alliance (SMA

Applications of the Internet of Things and optimization to inventory and distribution management

This thesis is part of the IoFEED (EU funded) project, which aims to monitor approximately 325 farm bins and investigates business processes carried out between farmers and animal feed producers. We propose a computer-aided system to control and optimize the supply chain to deliver animal feed to livestock farms. Orders can be of multiple types of feed, shipped from multiple depots using a fleet of heterogeneous vehicles with multiple compartments. Additionally, this case considers some business-specific constraints, such as product compatibility, facility accessibility restrictions, prioritized locations, or bio-security constraints. A digital twin based approach is implemented at the farm level by installing sensors to remotely measure the inventories. This thesis also embraces these sensors' design and manufacturing process, seeking the required precision and easy deployability at scale. Our approach combines biased-randomization techniques with a simheuristic framework to make use of data provided by the sensors. The analysis of results is based on these two real pilots, and showcases the insights obtained during the IoFEED project. The results of this thesis show how the Internet of Things and simulation-based optimization methods combine successfully to optimize deliveries of feed to livestock farms.Esta tesis forma parte del proyecto IoFeeD, financiado por la Unión Europea, que tiene como objetivo monitorizar remotamente el stock de 325 contenedores agrícolas e investigar los procesos comerciales llevados a cabo entre agricultores y productores de pienso. Proponemos un sistema de ayuda a la toma de decisiones para controlar y optimizar la cadena de suministro de pienso en las explotaciones ganaderas. Los pedidos pueden ser de varios tipos de pienso y pueden enviarse desde varios centros de fabricación mediante el uso de una flota de vehículos heterogéneos con varios compartimentos. Además, se tienen en cuenta algunas restricciones específicas de la empresa, como, por ejemplo, la compatibilidad del producto, las restricciones de accesibilidad en las instalaciones, las ubicaciones priorizadas o las restricciones de bioseguridad. A escala de granja, se implementa un enfoque basado en gemelos digitales mediante la instalación de sensores para medir los inventarios de forma remota. En el marco de esta tesis, se desarrollan estos sensores buscando la precisión requerida, así como las características oportunas que permitan su instalación a gran escala. Nuestro enfoque combina técnicas de aleatorización sesgada con un marco simheurístico para hacer uso de los datos proporcionados por los sensores. El análisis de los resultados se basa en estos dos pilotos reales y muestra las ideas obtenidas durante el proyecto IoFeeD. Los resultados de esta tesis muestran cómo la internet de las cosas y los métodos de optimización basados en simulación se combinan con éxito para optimizar las operaciones de suministro de pienso para el consumo animal en las explotaciones ganaderas.Aquesta tesi forma part del projecte IoFeeD, finançat per la Unió Europea, que té com a objectiu controlar remotament l'estoc de 325 sitges i investigar els processos de negoci duts a terme entre agricultors i productors de pinso. Proposem un sistema d'ajuda a la presa de decisions per controlar i optimitzar la cadena de subministrament de pinso a les explotacions ramaderes. Les comandes poden ser de diversos tipus de pinso i es poden enviar des de diversos centres de fabricació mitjançant l'ús d'una flota de vehicles heterogenis amb diversos compartiments. A més, es tenen en compte algunes restriccions específiques de l'empresa, com ara la compatibilitat del producte, les restriccions d'accessibilitat a les instal·lacions, les ubicacions prioritzades o les restriccions de bioseguretat. A escala de granja, s'implementa un enfocament basat en bessons digitals mitjançant la instal·lació de sensors per mesurar remotament els inventaris. En el marc de la tesi, es desenvolupa aquest sensor cercant la precisió requerida i les característiques oportunes que en permetin la instal·lació a gran escala. El nostre enfocament combina tècniques d'aleatorització esbiaixada amb un marc simheurístic per fer ús de les dades proporcionades pels sensors. L'anàlisi dels resultats es basa en aquests dos pilots reals i mostra les idees obtingudes durant el projecte IoFeeD. Els resultats d'aquesta tesi mostren com la internet de les coses i els mètodes d'optimització basats en simulació es combinen amb èxit per optimitzar les operacions de subministrament de pinso per al consum animal a les explotacions ramaderes.Tecnologies de la informació i de xarxe

Designing a robust production system for erratic demand environments.

Production systems must have the right type of material in the right quantities when required for production. They must minimize the work in progress while ensuring no stock-outstock-out occurs. While these twin opposing goals are achievable when demand is stable, they are difficult to realize under an erratic demand pattern. This dissertation aims to develop a production system that can meet erratic demands with minimal costs or errors. After a detailed introduction to the problem considered, we review the relevant literature. We then conduct a numerical analysis of current production systems, identify their deficiencies, and then present our solution to address these deficiencies via the ARK (Automated Replenishment System) technique. This technique is applied to a real-world problem at Methode Engineering ©. We conclude by detailing the scientific benefit of our technique and proposing ideas for future research