Supply Chain Management Technology

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Supply Chain Management Technology Supply Chain
Strategy vs Technology
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Solving Different Business PainsRequires
Different Planning Solutions
SynQuest
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Management Purposes
Business Micro-Environment
STRATEGIC Long-horizon, long increment, global
resource deployment
TACTICAL Mid-horizon, short increment, global
resource allocation
SpaceTime
OPERATIONAL Short-horizon, continuous time, local
resource utilization
Resources Human, Informational, Physical,
Financial
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Planning at Various Levels
Models
Inputs
Forecasts
STRATEGIC
Inputs
Forecasts
RESTRICTION PROPAGATION
TACTICAL
DATA CONSOLIDATION
Facts
Inputs
Facts
OPERATIONAL
5
Benefits at Various Levels
LEVEL MIN AVG
MAX Strategic 5
12 25 Tactical
4 8 15
Operational 3 5
10
As of controllable cost at each level
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Decision Support SystemsComponents
Data Capture
Data Processing
Model Generator
Model Preprocessor
Solver
Output Generator
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Data Variability
Variability
0
Strategic
Operational
Tactical
Purpose
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Solvers
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Optimality vs Speed Tradeoff
Optimality
Speed
Strategic
Operational
Tactical
10
Examples of Heuristic Approachesin Physical
Resource Management

• Materials Requirements Planning (MRP-X)
• Distribution Requirements Planning (DRP)
• Theory of Constraints (TOC)
• Genetic Algorithms
• Kuhn-Tucker Algorithm
• Out-Of-Kilter Algorithm
• Traveling Salesman Algorithm (TSA).

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Heuristic Solvers Characteristics

• Search for feasible solutions
• Ignore solution revenue cost impact
• Rules-based assume past continues
• Follow sequential procedures
• Depend on Gurus for practicality.

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Heuristic Solvers Sequential Logic
P r o v i d e
M a k e
H a n d l e
O r d e r
Logistic Facilities
Customers
Suppliers
Production Facilities
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Basic Optimization Principle (1)
In any system, the sum of partial optimum
benefits is less than (or equal to) the system
optimum benefit.
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Basic Optimization Principle (2)
The more tradeoffs optimized simultaneously, the
more benefits obtained from a system,
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Optimization Solvers Logic
Data Information
P r o v i d e
M a k e
H a n d l e
O r d e r
Materials
Logistic Facilities
Customers
Suppliers
Production Facilities
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Hierarchical OptimizationFoundations

• 1. Restriction Propagation
• reduces solution space
• 2. Low Solution Sensitivity
• around objectives optimum value
• 3. Optimality vs Speed Tradeoff
• Strategic-Tactical-Operational.

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Solution Economic Behavior
P r o f i t
0
O
A
B
Number of Facilities
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Summary

• Planning levels their interactions
• How to abstract reality into a model
• The correct solver
• Speed
• Environment