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While factors of predictability and reliability are key to successful supply chain operations, its seldom the fact of matter with supply chains. Uncertainty and disruptions are the norm challenging supply chain leaders to develop risk mitigation strategies in order to remain profitable.
To remain competitive, industrial organizations are continually faced with challenges to reduce product development time, improve product quality, and reduce production costs and lead times. Increasingly, these challenges cannot be effectively met by isolated change to specific organizational units, but instead depend critically on the relationships and interdependencies among different organizations (or organizational units). With the movement toward a global market economy, companies are increasingly inclined toward specific, high-value-adding manufacturing niches. This, in turn, increasingly transforms the above challenges into problems of establishing and maintaining efficient material flows along product supply chains. The ongoing competitiveness of an organization is tied to the dynamics of the supply chain(s) in which it participates, and recognition of this fact is leading to considerable change in the way organizations interact with their supply chain partners. |
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| PCI invests its research and development dollars in two broad areas to curb uncertainties |
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1. The development of techniques and tools that enable modeling and analysis of emerging supply chain management strategies and practices, and |
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| 2. Application of these tools to understand critical tradeoffs and alternatives in practical decision-making contexts. Our interests span a range of inter-related supply chain management issues: |
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Structure of Supply Chain: Here we are concerned with determination of the "optimal" number of production units in the supply chain as well as their location, based on considerations such as customer service requirements, lead times, operational costs, and unutilized / available capacities. |
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Supply Uncertainty: Understanding the relationship with suppliers is of utmost importance in order to address supply uncertainty. Our focus here is on selection of suppliers based on cost, flexibility in supply contracts, expected learning curves of suppliers, and agreements on cost and information sharing. |
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Operational Policies: We are interested in identifying inventory control policies, and information sharing strategies that enable a smooth flow of materials through the supply chain. We are also interested in understanding the operational impact of emerging coordination trends in manufacturing (e.g., electronic market places). |
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| Our Approach and Results: |
We are developing a modeling and simulation environment for analyzing supply-chain management strategies, policies and decisions. We have adopted a decomposable, "autonomous agents" approach to specifying supply chain models; models are defined in terms of constituent supply chain "agents" (e.g., suppliers, buyers, distributors), their structural relationships, interaction protocols and coordination policies. Our approach thus emphasizes construction of models that capture the locality that typically exists with respect to the purview, operating constraints and objectives of individual supply chain entities, and promotes analyses of supply chain performance from a variety of organizational perspectives (e.g., individual nodes, confederated sub-chains, overall network). From a system development standpoint, our approach aims at flexible and rapid configuration of alternative scenarios. Our implementation perspective is object-oriented, and one goal is to produce class libraries of common model building blocks (e.g., supplier/buyer agents, reordering policies, contractual agreements, information exchange protocols) that can be adapted and reused in different applications.
Our work to date has focused specifically on analyzing the impact of information exchange between suppliers and manufacturers or retailers on supply-chain dynamics. One interesting outcome of our initial study was a characterization of situations where individual suppliers must share information to remain competitive or simply put, Supply Chain Visibility. |
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