Rapid replenishment at a consumer product goods manufacturer

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2007.Includes bibliographical references (p. 74-75).Increasing supply chain velocity has adverse consequences for consumer product goods manufacturers, but creates value and flexibility for retail stores. This thesis outlines a case study of a rapid replenishment pilot project between the food manufacturer General Mills, Inc. and their retail customer Giant Eagle. We outline constraints that General Mills had to impose upon their customer so it could remain profitable and retain its efficient operating strategy. We offer recommendations to General Mills on how to grow and sustain their rapid replenishment business.by Deborah Eugenia Becker and Roman Viktorovich Korchagin.M.Eng.in Logistic

Simulation and optimization of a multi-agent system on physical internet enabled interconnected urban logistics.

An urban logistics system is composed of multiple agents, e.g., shippers, carriers, and distribution centers, etc., and multi-modal networks. The structure of Physical Internet (PI) transportation network is different from current logistics practices, and simulation can effectively model a series of PI-approach scenarios. In addition to the baseline model, three more scenarios are enacted based on different characteristics: shared trucks, shared hubs, and shared flows with other less-than-truckload shipments passing through the urban area. Five performance measures, i.e., truck distance per container, mean truck time per container, lead time, CO2 emissions, and transport mean fill rate, are included in the proposed procedures using real data in an urban logistics case. The results show that PI enables a significant improvement of urban transportation efficiency and sustainability. Specifically, truck time per container reduces 26 percent from that of the Private Direct scenario. A 42 percent reduction of CO2 emissions is made from the current logistics practice. The fill rate of truckload is increased by almost 33 percent, whereas the relevant longer distance per container and the lead time has been increased by an acceptable range. Next, the dissertation applies an auction mechanism in the PI network. Within the auction-based transportation planning approach, a model is developed to match the requests and the transport services in transport marketplaces and maximize the carriers’ revenue. In such transportation planning under the protocol of PI, it is a critical system design problem for decision makers to understand how various parameters through interactions affect this multi-agent system. This study provides a comprehensive three-layer structure model, i.e. agent-based simulation, auction mechanism, and optimization via simulation. In term of simulation, a multi-agent model simulates a complex PI transportation network in the context of sharing economy. Then, an auction mechanism structure is developed to demonstrate a transport selection scheme. With regard of an optimization via simulation approach and sensitivity analysis, it has been provided with insights on effects of combination of decision variables (i.e. truck number and truck capacity) and parameters settings, where results can be drawn by using a case study in an urban freight transportation network. In the end, conclusions and discussions of the studies have been summarized. Additionally, some relevant areas are required for further elaborate research, e.g., operational research on airport gate assignment problems and the simulation modelling of air cargo transportation networks. Due to the complexity of integration with models, I relegate those for future independent research

Real-time optimization of an integrated production-inventory-distribution problem.

In today\u27s competitive business environment, companies face enormous pressure and must continuously search for ways to design new products, manufacture and distribute them in an efficient and effective fashion. After years of focusing on reduction in production and operation costs, companies are beginning to look into distribution activities as the last frontier for cost reduction. In addition, an increasing number of companies, large and small, are focusing their efforts on their core competencies which are critical to survive. This results in a widespread practice in industry that companies outsource one or more than one logistics functions to third party logistics providers. By using such logistics expertise, they can obtain a competitive advantage both in cost and time efficiency, because the third party logistics companies already have the equipment, system and experience and are ready to help to their best efforts. In this dissertation, we developed an integrated optimization model of production, inventory and distribution with the goal to coordinate important and interrelated decisions related to production schedules, inventory policy and truckload allocation. Because outsourcing logistics functions to third party logistics providers is becoming critical for a company to remain competitive in the market place; we also included an important decision of selecting carriers with finite truckload and drivers for both inbound and outbound shipments in the model. The integrated model is solved by modified Benders decomposition which solves the master problem by a genetic algorithm. Computational results on test problems of various sizes are provided to show the effectiveness of the proposed solution methodology. We also apply this proposed algorithm on a real distribution problem faced by a large national manufacturer and distributor. It shows that such a complex distribution network with 22 plants, 7 distribution centers, 8 customer zones, 9 products, 16 inbound and 16 outbound shipment carriers in a 12-month planning period can be redesigned within 33 hours. In recent years, multi-agent simulation has been a preferred approach to solve logistics and distribution problems, since these problems are autonomous, distributive, complex, heterogeneous and decentralized in nature and they require extensive intelligent decision making. Another important part in this dissertation involved a development of an agent-based simulation model to cooperate with the optimal solution given by the optimization model. More specifically, the solution given by the optimization model can be inputted as the initial condition of the agent-based simulation model. The agent-based simulation model can incorporate many other factors to be considered in the real world, but optimization cannot handle these as needed. The agent-based simulation model can also incorporate some dynamics we may encounter in the real operations, and it can react to these dynamics in real time. Various types of entities in the entire distribution system can be modeled as intelligent agents, such as suppliers, carriers and customers. In order to build the simulation model more realistic, a sealed bid multiunit auction with an introduction of three parameters a, ß and y is well designed. With the help of these three parameters, each agent makes a better decision in a simple and fast manner, which is the key to realizing real-time decision making. After building such a multi-agent system with agent-based simulation approach, it supports more flexible and comprehensive modeling capabilities which are difficult to realize in a general optimization model. The simulation model is tested and validated on an industrial-sized problem. Numerical results of the agent-based simulation model suggest that with appropriate setting of three parameters the model can precisely represent the preference and interest of different decision makers

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

RFID Applied to Supply Chain Logistics in Disaster Recovery

The purpose of this paper is to review recent developments to use RFID (Radio Frequency Identification) for supply chain logistics in the construction industry and identify potential applications of this technology for disaster recovery in construction operations. Natural disasters, terrorist attacks, and extreme weather conditions can cause significant damage to local communities and disruptions to the local supply chain. The effective movement of resources during disaster recovery operations is critical in a postdisaster recovery environment. RFID technology has advanced to the level that the technology could be used to improve the supply chain preparedness, people, material and equipment locating and tracking, and corresponding billing operations in many industries. Current RFID technology could be used in the construction industry in areas to automate material tracking in off-site warehouse of construction firms or suppliers, to establish initial location of material received on construction sites, to track materials that are being shared and in common areas for multiple construction sites, to restock material in laydown or warehouses, to minimize material over-ordering with better tracking of quantity information, to reduce loss from theft and support site security measures, and to assist site equipment and fuel management. Studies have shown that 3.1% of total construction costs could be saved after implementing RFID technology tagging and tracking materials on site and in warehouses. In the case of after-natural-disasters reconstruction, materials locating and tracking activities are highly valuable because disaster relief reconstruction site conditions are more challenging than regular construction site conditions. Reconstruction resources are often limited and difficult to move in and out. Significant construction cost savings can be achieved with RFI-enabled material tracking and locating systems. A review of the current technology provides many emerging applications of RFID technology for the broader construction industry. This paper examines direct applications of RFID for disaster relief reconstruction operations

Managing Returnable Containers Logistics - A Case Study Part I - Physical and Information Flow Analysis

This case study paper is the result of a project conducted on behalf of a company, hereon referred to as Midwest Assembly and Manufacturing or MAAN. The company’s operations include component manufacturing, painting, and assembling products. The company also purchases a relatively large percentage of components and major assemblies that are needed to support final assembly operations. MAAN uses its own returnable containers to transport purchased parts from suppliers. Due to poor tracking of the containers, the company has been experiencing lost containers and occasional production disruptions at its facility well as at the supplier sites. The objective of this project was to develop a proposal to enable MAAN to more effectively track and manage its returnable containers. The research activities in support of this project included the analysis and documentation of both the physical flow and the information flow associated with the containers as well as some of the technologies that can help with automatic identification and tracking of containers. The focal point of this paper is on a macro‐level approach for the analysis of container and information flow within the logistics chain. A companion paper deals with several of the automatic identification technologies that have the potential to improve the management of MAANʹs returnable container

Optimizing Retrieving Performance of an Automated Warehouse for Unconventional Stock Keeping Units

In recent years, the diffusion of automated warehouses in different industrial sectors has fostered the design of more complex automated storages and handling solutions. These circumstances, from a technological point of view, have led to the development of automated warehouses that are very different from the classic pallet Automated Storage and Retrieval Systems (AS/RS), both in terms of design and operating logic. A context in which these solutions have spread is the steel sector. Warehouses with innovative layouts and operating logics have been designed to move metal bundles of different sizes, weights and quality levels, instead of standard, interchangeable stock keeping units. Moreover, picking is often not allowed in these warehouses, due to the configuration of the loading units. In this work we propose a meta-heuristic algorithm based on the Simulated Annealing (SA) procedure, which aims to optimize performance during the retrieving phase of an automated warehouse for metal bundles. The algorithm translates the customers’ requests, expressed in terms of item code, quality and weight into a list of jobs. The goal is to optimize the retrieving performance, measured in missions per hour, minimizing the deviations in quality and weight between customer request and the material retrieved. For the validation, a simulation model of an existing warehouse has been created and the performance of the algorithm tested on the simulation model has been compared with the current performance of the warehouse

Truckload Shipment Planning and Procurement

This dissertation presents three issues encountered by a shipper in the context of truckload transportation. In all of the studies, we utilize optimization techniques to model and solve the problems. Each study is inspired from the real world and much of the data used in the experiments is real data or representative of real data. The first topic is about the freight consolidation in truckload transportation. We integrate it with a purchase incentive program to increase truckload utilization and maximize profit. The second topic is about supporting decision making collaboration among departments of a manufacturer. It is a bi-objective optimization model. The third topic is about procurement in an adverse market. We study a modification of the existing procurement process to consider the market stochastic into marking decisions. In all three studies, our target is to develop effectively methodologies to seek optimal answers within a reasonable amount of time

An evaluation of the logistics functions of the Chemical Specialties Division, Ralston Purina Company

This study was originally designed to examine the Chemical Specialties Division of the Ralston Purina Company and to make recommendations concerning the development of a more efficient distribution system for the products of the Division. During the course of the examination, the Ralston Purina corporate management announced plans to terminate all national sales of the Chemical Specialties Division. In doing so, the corporate management terminated all ’’outside” sales and limited the functions of the Chemical Specialties Division to supplying the necessary chemical cleaners to Ralston Purina1 s plants. This eliminated any need for a more efficient distribution program required to maintain a competitive position in chemical specialty sales since all products would now be distributed only to Ralston Purina plants within the corporate distribution system. As a result of this decision on the part of Ralston Purina1 s corporate management, the original purpose of this study -- to develop and recommend improvements in logistical management for the Chemical Specialties Division keyed to competitive requirements of a national sales market -- was lost and the objective was changed to the development of the requirements for an effective and efficient distributive system for a small division within a large corporation, using the experience of the Chemical Specialties Division as a case study.--Introduction