Structuring postponement strategies in the supply chain by analytical modeling

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Analysis of the supply chain design and planning issues: Models and algorithms

Ph.DDOCTOR OF PHILOSOPH

Optimal Policies on Managing Drug Supply and Patient Access to Drugs

Health care decision-makers face several uncertainties regarding pharmaceutical products. For new and expensive drugs, the performance outside of clinical trials could be uncertain. For old and low-profit pharmaceutical products, the supply could be uncertain, causing drug shortages. In three essays, I study mitigating strategies to deal with different types of uncertainties associated with pharmaceutical products. In the first essay, I compare two types of pharmaceutical reimbursement contracts to mitigate the uncertainties associated with new and expensive drugs. I construct a game-theoretic model to analyze the interactions between a pharmaceutical manufacturer and a payer. The payer’s reimbursement of a drug is either related to the cost-effectiveness or the sales volume of the drug in the two contracts, respectively. I find key factors that determine the two parties’ preferences for the two contracts. I also find conditions under which each type is preferred by both parties and can achieve a Pareto improvement. In the second essay, I study mitigating strategies for drug shortage, which has become a serious problem in many countries in recent years. I construct a multi-period supply chain model to analyze the interactions between a representative hospital and an unreliable pharmaceutical manufacturer. The hospital owns an in-house manufacturer and can procure the drug from the two manufacturing facilities. I also assume that the hospital can make emergency production. I study the two parties’ procurement and production decisions and examine the impacts of the hospital’s optimal decisions on the external manufacturer’s profit. In the third essay, I study mitigating strategies for drug shortages from the governments’ perspective. I construct a game-theoretic model consisting of a pharmaceutical manufacturer, a wholesaler, and a government. I compare two types of mitigating strategies that the government can implement: providing subsidies to the wholesaler, or using a government-owned manufacturer. I identify key factors for the government’s preference over the two strategies and examine the impact on the private sector. The three essays have theoretical contributions to game theory and supply chain risk management literature and have policy implications for policymakers to manage drug supply and patient access to drugs

Assessing the impact of 3D printing adoption on the supply chain

With the rapid development of technology, we are entering a New Industrial Revolution – many believe disruptive technology will change the manufacturing industry, ushering in the new ‘Age of 3D printing (3DP)’. D’Aveni (2013) once pointed out that ‘businesses all along the supply, manufacturing, and retailing chains [will need] to rethink their strategies and operations’. Indeed, on the one hand, 3DP technology is changing the competitive dynamics of production based on traditional economies-of-scale into production based on economiesof-one. Meanwhile, 3DP technology can effectively help consumers to fulfil their personalized requirements with regard to the final product. Therefore, 3DP as a disruptive technology creates new opportunities and challenges for our supply chain system in product design, production, distribution, and logistics procecces. Although a great deal of existing research pays attention to 3DPtechnology adoption from a case study perspective, little research has been directed at how to adopt this disruptive technology – 3DP technology – to improve product customization and overall supply chain performance. Therefore, this PhD research addresses the gap that exists between the 3DP adoption market and the 3DP adoption research. The result of this PhD research offers the new insight about 3DP adoption strategies to the 3DP technology adopter (target at the manufacturer and the logistics vendor in this research), along with access to 3DP products and users which still have not widely adopted this new technology. This research investigates the question, ‘What are the impacts of 3DP adoption on the supply chain?’ via three different quantitative research models. Firstly, this research studies the impact of the logistics vendor’s 3DP adoption on a single two-layer supply chain with one traditional manufacturer and one logistics vendor. The main results are as follows: (1) that the logistics vendor can benefit from 3DP adoption to better restructure the supply chain. At the same time, there exists a situation in which the traditional manufacturer also benefits from this kind of 3DP adoption. (2) There exist conditions under which the logistics vendor can use this 3DP adoption as a threat to influence the traditional manufacturer’s decisions in order to gain financial benefits. (3) The cost reductions and product customization improvements of the 3DP product do not always contribute to a better financial performance or higher consumer satisfaction. Next, based on the first two-layer supply chain model, we investigate the traditional manufacturer’s manufacturing strategy in terms of traditional manufacturing, traditional flexible manufacturing and 3DP, and explore the impacts of different strategies on the manufacturing decisions of the traditional manufacturer and on the logistics vendor’s profit. Through numerical examples, we show that: (1) Adoption of 3DP is not always able to bring more profit to the logistics vendor. Specifically, if the traditional manufacturer has already used flexible manufacturing technology (traditional flexible manufacturing and/or 3DP), the logistics vendor can gain more profits if s/he provides a product delivery service only. (2) When it comes to cost reduction and product customization improvement, the traditional manufacturer should not use both traditional flexible manufacturing technology and 3DP manufacturing technology together for high value products. (3) Full 3DP product adoption is still not yet a beneficial strategy for the integrated supply chain. Lastly, we explore and compare the logistics vendor’s optimal models of collaboration with third-party 3DP professionals and the traditional manufacturer, obtaining optimal pricing strategies for both the traditional manufacturer and the logistics vendor, and maximized profits under different scenarios. The key findings are as follows: (1) Traditional manufacturer cannot always gain more profits under a self-3DP production model – it depends on the 3DP product cost, product design quality, and the product design authorization fee. (2) The logistics vendor cannot gain more profits if s/he chooses to produce the 3DP product using third-party 3DP product design while the traditional manufacturer already has 3DP production line. This finding implies that for those 3DP enabled logistics vendors (for example, UPS), it is not profitable to participate in the market competition where the traditional manufacturer already has TM (traditional manufactured) production and 3DP production (e.g. GE). (3) Although some research points out that 3DP is the future of some industries, our findings here indicate that compared to the hard-revolution (replace the whole TM production with 3DP production), adding 3DP production into the manufacturing system is a more profitable soft-landing plan for integrated supply chain development