The Value of Cooperative Planning in Supply Chains - A Simulative Approach

In this paper we examine, how the benefits of Supply Chain Management, as announced by the literature and widely accepted, can simulatively be proven. We first present selected results of a survey conducted on the European automotive industry, which show an evident need for transparency, in terms of the quantification of the added-value of Supply Chain Management. For this purpose we introduce an XML-based prototype for modeling and simulating cooperative scenarios in supply chains, and illustrate its flexible architecture and the interaction between modeled scenarios and optimization routines through XML interfaces. In the context of this prototype we describe a simulation scenario in which the transportation activities in a supply chain are modeled and planned. We then run simulations in a cooperative and in a non-cooperative context and compare the results for the entire supply chain. This comparison can provide information about the benefits of cooperative logistics planning (i.e. Supply Chain Management), which for instance can be realized by implementing Supply Chain Management software for distribution planning purposes

A multi-echelon supply chain model for strategic inventory assessment through the deployment of kanbans

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2008.Includes bibliographical references (leaves 100-102).As global competition in the manufacturing space grows, so do corporations' needs for sophisticated and optimized management systems to enable continuous flows of information and materials across the many tiers within their supply chains. With the complexities introduced by the variability in the demand for finished goods as well as by the variability in lead-time of transportation, procurement, production and administrative activities, corporations have turned to quantitative modeling of their supply chains to address these issues. Based on the data of a heavy machinery manufacturer headquartered in the US, this research introduces a robust model for the deployment of strategic inventory buffers across a multi-echelon manufacturing system. Specifically, this study establishes a replenishment policy for inventory using a multiple bin, or Kanban, system for each part number in the assembly of products from our sponsors tractor line. We employ a numerical simulation to evaluate and optimize the various inventory deployment scenarios. Utilizing several thousand runs of the simulation, we derive a generalized treatment for each part number based on an econometric function of the parameters associated with lead-time, order frequency, inventory value and order costing. The pilot for the simulation focuses on the parts data for three earthmoving products across eight echelons, but scales to n products across m echelons. Our results show that this approach predicted the optimal quantities of Kanbans for 95% of parts to a level of accuracy +/- 3 bins.by Philip J. Hodge and Joshua D. Lemaitre.M.Eng.in Logistic

Simulation Modeling of Alternative Staffing and Task Prioritization in Manual Post-Distribution Cross Docking Facilities

Many supply chains have grown increasingly complex, which has led to the development of different facility types. One such facility is known as a post-distribution cross docking system (Post-C). In these facilities, bulk sorted product is received from various suppliers. Each product has its own destination, so the bulk package is broken, sorted by destination, and staged by destination. Typical processing includes: sort received goods by product type; break bulk and sort out goods by destination; move palletized goods to the staging areas of their respective destinations. This paper compares a global staffing policy (in which all workers may perform any task) to a dedicated staffing policy (in which groups of workers are assigned specific tasks). Through comparisons of the two models, it was found the dedicated worker model’s benefits from reduced change-over outweigh the lower worker utilization it experiences

Performance modeling of e-procurement workflow using Generalised Stochastic Petri net (GSPN)

This paper proposes a Generalised Stochastic Petri net (GSPN) model representing a generic e-procurement workflow process. The model displays the dynamic behaviour of the system and shows the inter relationship of process activities. An analysis based on matrix equation approach enabled users to analyse the critical system's states, and thus justify the process performance. The results obtained allow users for better decision making in improving e-procurement workflow performance

Optimization of the long-term planning of supply chains with decaying performance

This master's thesis addresses the optimization of supply and distribution chains considering the effect that equipment aging may cause over the performance of facilities involved in the process. The decaying performance of the facilities is modeled as an exponential equation and can be either physical or economic, thus giving rise to a novel mixed integer non-linear programming (MINLP) formulation. The optimization model has been developed based on a typical chemical supply chain. Thus, the best long-term investment plan has to be determined given production nodes, their production capacity and expected evolution; aggregated consumption nodes (urban or industrial districts) and their lumped demand (and expected evolution); actual and potential distribution nodes; distances between the nodes of the network; and a time horizon. The model includes the balances in each node, a general decaying performance function, and a cost function, as well as constraints to be satisfied. Hence, the investment plan (decision variables) consists not only on the start-up and shutdown of alternative distribution facilities, but also on the sizing of the lines satisfying the flows. The model has been implemented using GAMS optimization software. Results considering a variety of scenarios have been discussed. In addition, different approaches to the starting point for the model have been compared, showing the importance of initializing the optimization algorithm. The capabilities of the proposed approach have been tested through its application to two case studies: a natural gas network with physical decaying performance and an electricity distribution network with economic decaying performance. Each case study is solved with a different procedure to obtain results. Results demonstrate that overlooking the effect of equipment aging can lead to infeasible (for physical decaying performance) or unrealistic (for economic decaying performance) solutions in practice and show how the proposed model allows overcoming such limitations thus becoming a practical tool to support the decision-making process in the distribution secto

Managing the bullwhip effect in multi-echelon supply chains

This editorial article presents the bullwhip effect which is one of the major problems faced by supply chain management. The bullwhip effect represents the demand variability amplification as demand information travels upstream in the supply chain. The bullwhip effect research has been attempting to prove its existence, identify its causes, quantify its magnitude and propose mitigation and avoidance solutions. Previous research has relied on different modeling approaches to quantify the bullwhip effect and to investigate the proposed mitigation/avoidance solutions. Extensive research has shown that smoothing replenishment rules and collaboration in supply chain are the most powerful approaches to counteract the bullwhip effect. The objective of this article is to highlight the bullwhip effect avoidance approaches with providing some interesting directions for future research

Evolution of Supply Chain Collaboration: Implications for the Role of Knowledge

Increasingly, research across many disciplines has recognized the shortcomings of the traditional “integration prescription” for inter-organizational knowledge management. This research conducts several simulation experiments to study the effects of different rates of product change, different demand environments, and different economies of scale on the level of integration between firms at different levels in the supply chain. The underlying paradigm shifts from a static, steady state view to a dynamic, complex adaptive systems and knowledge-based view of supply chain networks. Several research propositions are presented that use the role of knowledge in the supply chain to provide predictive power for how supply chain collaborations or integration should evolve. Suggestions and implications are suggested for managerial and research purposes