AI and OR in management of operations: history and trends

The last decade has seen a considerable growth in the use of Artificial Intelligence (AI) for operations management with the aim of finding solutions to problems that are increasing in complexity and scale. This paper begins by setting the context for the survey through a historical perspective of OR and AI. An extensive survey of applications of AI techniques for operations management, covering a total of over 1200 papers published from 1995 to 2004 is then presented. The survey utilizes Elsevier's ScienceDirect database as a source. Hence, the survey may not cover all the relevant journals but includes a sufficiently wide range of publications to make it representative of the research in the field. The papers are categorized into four areas of operations management: (a) design, (b) scheduling, (c) process planning and control and (d) quality, maintenance and fault diagnosis. Each of the four areas is categorized in terms of the AI techniques used: genetic algorithms, case-based reasoning, knowledge-based systems, fuzzy logic and hybrid techniques. The trends over the last decade are identified, discussed with respect to expected trends and directions for future work suggested

Supply chain management: An opportunity for metaheuristics

In today’s highly competitive and global marketplace the pressure on organizations to find new ways to create and deliver value to customers grows ever stronger. In the last two decades, logistics and supply chain has moved to the center stage. There has been a growing recognition that it is through an effective management of the logistics function and the supply chain that the goal of cost reduction and service enhancement can be achieved. The key to success in Supply Chain Management (SCM) require heavy emphasis on integration of activities, cooperation, coordination and information sharing throughout the entire supply chain, from suppliers to customers. To be able to respond to the challenge of integration there is the need of sophisticated decision support systems based on powerful mathematical models and solution techniques, together with the advances in information and communication technologies. The industry and the academia have become increasingly interested in SCM to be able to respond to the problems and issues posed by the changes in the logistics and supply chain. We present a brief discussion on the important issues in SCM. We then argue that metaheuristics can play an important role in solving complex supply chain related problems derived by the importance of designing and managing the entire supply chain as a single entity. We will focus specially on the Iterated Local Search, Tabu Search and Scatter Search as the ones, but not limited to, with great potential to be used on solving the SCM related problems. We will present briefly some successful applications.Supply chain management, metaheuristics, iterated local search, tabu search and scatter search

E-logistics of agribusiness organisations

Logistics is one of the most important agribusiness functions due to the idiosyncrasy of food products and the structure of food supply chain. Companies in the food sector typically operate with poor production forecasting, inefficient inventory management, lack of coordination with supply partners. Further, markets are characterised by stern competition, increasing consumer demands and stringent regulation for food quality and safety. Large agribusiness corporations have already turned to e-logistics solutions as a means to sustain competitive advantage and meet consumer demands. There are four types of e-logistics applications: (a) Vertical alliances where supply partners forge long-term strategic alliances based on electronic sharing of critical logistics information such as sales forecasts and inventory volume. Vertical alliances often apply supply chain management (SCM) which is concerned with the relationship between a company and its suppliers and customers. The prime characteristic of SCM is interorganizational coordination: agribusiness companies working jointly with their customers and suppliers to integrate activities along the supply chain to effectively supply food products to customers. E-logistics solutions engender the systematic integration among supply partners by allowing more efficient and automatic information flow. (b) e-tailing, in which retailers give consumers the ability to order food such as groceries from home electronically i.e. using the Internet and the subsequent delivery of those ordered goods at home. (c) Efficient Foodservice Response (EFR), which is a strategy designed to enable foodservice industry to achieve profitable growth by looking at ways to save money for each level of the supply chain by eliminating inefficient practices. EFR provides solutions to common logistics problems, such as transactional inefficiency, inefficient plant scheduling, out-of-stocks, and expedited transportation. (d) Contracting, a means of coordinating procurement of food, beverages and their associated supplies. Many markets and supply chains in agriculture are buyer-driven where the buyers in the market tend to set prices and terms of trade. Those terms can include the use of electronic means of communication to support automatic replenishment of goods, management of supply and inventory. The results of the current applications of e-logistics in food sector are encouraging for Greek agribusiness. Companies need to become aware of and evaluate the value-added by those applications which are a sustainable competitive advantage, optimisation of supply chain flows, and meeting consumer demands and food safety regulations. E-business diffusion has shown that typically first-movers gain a significant competitive advantage and the rest companies either eventually adopt the new systems or see a significant decline in their trading partners and perish. E-logistics solutions typically require huge investments in hardware and software and skilled personnel, which is an overt barrier for most Greek companies. Large companies typically are first-movers but small and medium enterprises (SMEs) need institutional support in order to become aware that e-logistics systems can be fruitful for them as well

The relevance of outsourcing and leagile strategies in performance optimization of an integrated process planning and scheduling

Over the past few years growing global competition has forced the manufacturing industries to upgrade their old production strategies with the modern day approaches. As a result, recent interest has been developed towards finding an appropriate policy that could enable them to compete with others, and facilitate them to emerge as a market winner. Keeping in mind the abovementioned facts, in this paper the authors have proposed an integrated process planning and scheduling model inheriting the salient features of outsourcing, and leagile principles to compete in the existing market scenario. The paper also proposes a model based on leagile principles, where the integrated planning management has been practiced. In the present work a scheduling problem has been considered and overall minimization of makespan has been aimed. The paper shows the relevance of both the strategies in performance enhancement of the industries, in terms of their reduced makespan. The authors have also proposed a new hybrid Enhanced Swift Converging Simulated Annealing (ESCSA) algorithm, to solve the complex real-time scheduling problems. The proposed algorithm inherits the prominent features of the Genetic Algorithm (GA), Simulated Annealing (SA), and the Fuzzy Logic Controller (FLC). The ESCSA algorithm reduces the makespan significantly in less computational time and number of iterations. The efficacy of the proposed algorithm has been shown by comparing the results with GA, SA, Tabu, and hybrid Tabu-SA optimization methods

An optimal-control based integrated model of supply chain

Problems of supply chain scheduling are challenged by high complexity, combination of continuous and discrete processes, integrated production and transportation operations as well as dynamics and resulting requirements for adaptability and stability analysis. A possibility to address the above-named issues opens modern control theory and optimal program control in particular. Based on a combination of fundamental results of modern optimal program control theory and operations research, an original approach to supply chain scheduling is developed in order to answer the challenges of complexity, dynamics, uncertainty, and adaptivity. Supply chain schedule generation is represented as an optimal program control problem in combination with mathematical programming and interpreted as a dynamic process of operations control within an adaptive framework. The calculation procedure is based on applying Pontryagin’s maximum principle and the resulting essential reduction of problem dimensionality that is under solution at each instant of time. With the developed model, important categories of supply chain analysis such as stability and adaptability can be taken into consideration. Besides, the dimensionality of operations research-based problems can be relieved with the help of distributing model elements between an operations research (static aspects) and a control (dynamic aspects) model. In addition, operations control and flow control models are integrated and applicable for both discrete and continuous processes.supply chain, model of supply chain scheduling, optimal program control theory, Pontryagin’s maximum principle, operations research model,

Design Principles for Closed Loop Supply Chains

In this paper we study design principles for closed loop supply chains. Closed loop supply chains aim at closing material flows thereby limiting emission and residual waste, but also providing customer service at low cost. We study 'traditional' and 'new' design principles known in the literature. It appears that setting up closed loop supply chains requires some additional design principles because of sustainability requirements. At the same time however, we see that traditional principles also apply. Subsequently we look at a business situation at Honeywell. Here, only a subset of the relevant design principles is applied. The apparent low status of reverse logistics may provide an explanation for this. To some extent, the same mistakes are made again as were 20 years ago in, for instance, inbound logistics. Thus, obvious improvements can be made by applying traditional principles. Also new principles, which require a life cycle driven approach, need to be applied. This can be supported by advanced management tools such as LCA and LCC.reverse logistics;case-study;closed loop supply chains

Energy efficiency in discrete-manufacturing systems: insights, trends, and control strategies

Since the depletion of fossil energy sources, rising energy prices, and governmental regulation restrictions, the current manufacturing industry is shifting towards more efficient and sustainable systems. This transformation has promoted the identification of energy saving opportunities and the development of new technologies and strategies oriented to improve the energy efficiency of such systems. This paper outlines and discusses most of the research reported during the last decade regarding energy efficiency in manufacturing systems, the current technologies and strategies to improve that efficiency, identifying and remarking those related to the design of management/control strategies. Based on this fact, this paper aims to provide a review of strategies for reducing energy consumption and optimizing the use of resources within a plant into the context of discrete manufacturing. The review performed concerning the current context of manufacturing systems, control systems implemented, and their transformation towards Industry 4.0 might be useful in both the academic and industrial dimension to identify trends and critical points and suggest further research lines.Peer ReviewedPreprin

Supply Chain Digitalization – Optimizing The Factory Material Flow

Nykypäivän kiristynyt kilpailu ja edistyneet toimitusketjut edellyttävät entistä parempaa tomistusketjun digitalisointia parantamaan tehokkuutta, toimistusvarmuutta ja yrityksen kannattavuutta. Toimitusketjun digitalisoinnin avulla voidaan tukea reaaliaikaisesti muuttuvaa kysyntää valmistusyksikössä, luomalla älykäs toimitusketju joka tukee kysyntälähtöistä arvoketjua. Tämän tutkimuksen tarkoituksena on selvittää ja esittää kohdeyritykselle mahdolliset toiminallisuudet ja tuotteet SAP S/4HANA:sta jotka tukevat kohdeyrityksen nykyisiä ja suunniteltuja toimitusketjun prosesseja. Työssä tutkitaan hankinnasta, varastonhallintaan ja valmistukseen liittyviä toiminallisuuksia. Toiminnallisuudet analysoidaan kohdeyrityksen näkökulmasta ja verrataan vaatimuksiin, joita kohdeyrityksessa nostetaan esille. Tutkielman teoreettinen osuus pohjautuu toimitusketjun ja ERP SAP uuteen tuotteeseen SAP S/4HANA. Toimitusketjun osuudessa tuodaan esille, kuinka vaatimukset Toimitusketju 4.0 ja Teollisuus 4.0 voidaan nähdä suuntaviivoina SAP S/4HANA:n kehitykselle. Empiirinen osuus jakautuu kahteen tutkimuskysymykseen: Mitkä ovat tulevaisuuden mahdollisuudet visualisoida, arvioida ja optimoida toimitusketjua SAP S/4HANA ydintoiminnoilla? Mitä hyötyä kohde-yritys voi saavuttaa ottamalla käyttöön SAP S/4HANA laajennetut toiminallisuudet? Työn tuloksena saatiin ymmärrys SAP S/4HANA tuotteesta ja sen mahdollisuuksista toimitusketjun osalta. SAP S/4HANA tuotteena tukee monia kohdeyrityksen vaatimuksia ylätasolla, mutta vaatii konkreettisempia tutkimuksia ja testausta kohdeyrityksen työskentely ympäristössä sekä pitäisi hyödyntää kohdeyrityksen dataa.Today’s increasing competition and advanced supply chain needs better digitized supply chain to improve efficiency, on time delivery and business profitability. Supply chain digitalization enable to have real- time optimized supply chain. Supply chain management supporting the variable manufacturing unit demand by creating smart supply chain that supports the demand-driven value chain. The purpose of the study is to investigate and present how the SAP S/4HANA functionalities and products could support the case company and defined supply chain processes. The study explores supply chain from purchasing, inventory management to manufacturing. Functionalities are analysed from case company perspective and are compared to requirements what case company has raised up. Theoretical chapters focus on the supply chain and ERP SAP new product SAP S/4HANA. Supply chain chapter is divided to Supply 4.0 and Industry 4.0 to bring up the view how the SAP S/4HANA is aligned with these topics. Empirical part is divided into two research questions: What are the future capabilities to visualize, evaluate and optimize the supply chain including the core functionalities of the SAP S/4HANA? What benefits the case company can achieve by implementing the extended functionalities of the SAP S/4HANA? As a result of the study a good understanding of the SAP S/4HANA product and the possibility related to supply chain was reached. SAP S/4HANA as a product supports most of the requirements from case company in high level but requires more specific research and testing in company environment with real company data

On Shelf Availability: A Literature Review & Conceptual Framework

On-Shelf Availability (OSA) is a key performance indicator for the retail industry, greatly impacting profit and customer loyalty. Strong competition in the industry causes retailers and suppliers to put heavy emphasis on improving performance in an effort to satisfy consumers and keep them coming back to their store or product. Over 40 years of research has been done on OSA and its complement, out-of stock (OOS), however very little progress has been made in improving performance in these areas, leading to the belief that gaps in extant research exist. In order to solve the OOS problem, the key drivers of OOS events must first be identified and then addressed. This paper focuses on identifying the drivers of poor OSA performance through a three step process. First, a comprehensive literature review was performed to identify the drivers of OOS addressed in existing literature. Second, interviews with industry professionals revealed potential drivers of poor OSA performance that have been explored at an industry level. Finally, the two lists were examined against each other and the potential drivers identified in the interviews that had yet to be researched were highlighted. This paper gives strategic direction for future research to help solve the OOS dilemma facing manufacturers and retailers today