Edited By
A.G. de Kok, Eindhoven University of Technology, The Netherlands
S.C. Graves, M.I.T., Cambridge, USA
Description
Supply Chain Management (SCM) has been a very visible and influential research topic in the field of operations research (OR) over the
course of the last decade of the 20th century. The problems and experiences that emerged from business practices have stimulated many
researchers to contribute to a deeper understanding about underlying phenomena and causal relationships. SCM has also served as an important
application area for OR methods and techniques.
This handbook contains chapters covering a broad range of SCM issues written by leading
experts in the field. The work is intended for researchers, students, engineers, economists and managers involved in SCM.
After the
Introduction to SCM in Chapter 1 the Volume is divided into 3 parts.
Part I deals with Supply Chain Design. In Chapter 2, the optimal
location of warehouses and factories is discussed as well as some tactical problems related to pricing and integrated production, inventory
and transportation policies. In Chapter 3 various strategic and tactical issues that must be addressed when deciding on investments
in inventory capital to hedge against uncertainty are discussed. Also, the issue of supplier selection in the context of the trade-off
between supplier flexibility and variable material costs is discussed in detail. Chapter 4 provides an overview of the literature on
flexibility in the context of Supply Chain Design. The literature review reveals that most of the flexibility concepts from the literature
do not provide insight into the issue of allocation of assets across the supply chain, so that flexibility is created at the right links.
A modelling framework is proposed that addresses this issue. Part I closes with Chapter 5, where the relationship between product and
process design and Supply Chain Design is examined.
Part II deals with Supply Chain Coordination. In this context coordination refers
to the design of contracts between suppliers and buyers, as well as the information that is exchanged between them. The different incentives
of supplier and buyer are formalized in a game-theoretic context, showing that without proper incentive schemes the supply chain becomes
inefficient in comparison to a supply chain with centralized control. Relatively simple models reveal fundamental insights on Supply
Chain Coordination and already have had a great impact in the business practice of today. Chapter 6 focuses on contracts that allow for
various kinds of transfer payments and identifies conditions under which such transfer payments yield a properly coordinated supply chain.
In Chapter 7 the value of information exchange and sharing is studied. By comparing alternatives for sharing information between the
links in the supply chain, we obtain insights about which information is most valuable and under what circumstances. The results from
Chapters 6 and 7 provide input in terms of costs and prices, as well as available information, for the coordination of the supply chain.
Still, many other parameters are required to execute the supply chain. Chapter 8 provides a framework for understanding the role of tactical
planning parameters, such as forecast accuracy, mean and variance of lead times, and capacity utilization. They also emphasize the issue
of the structural complexity of a supply chain. Real-world problems have such an enormous structural complexity that there is hardly
any hope for solving them cleanly with a closed-form formula. Thus, alternative routes to cope with this complexity are proposed.
Part III is dedicated to Supply Chain Operations. Chapter 9 provides an overall Supply Chain Planning (SCP) framework. This framework
shows the hierarchical nature of real-world Supply Chain Management and further reveals the structural complexity already discussed.
The SCP framework provides the means to assess the state-of-the-art of Advanced Planning and Scheduling Systems. Chapter 10 discusses
the progress made during the nineties with respect to the analysis of multi-echelon serial and divergent inventory systems. The fact
that the structure of the optimal policy for divergent systems remains unknown, even for the most benign random demand processes, motivates
the development and analysis of various control policies. Chapter 11 reports on the substantial progress made in this area and following
up on Chapter 9 by discussing Supply Chain Operations Planning (SCOP) applied to arbitrary multi-echelon inventory systems, i.e. many-to-many
relationships between items (links) to be controlled. A framework is proposed that enables the assessment of the feasibility of supply
chain control concepts proposed in the literature and provide some quantitative results that reveal the counter-intuitive behaviours
of such systems. Finally, Chapter 13 discusses the role of the logistics service providers for effective Supply Chain Management. A
general framework (vocabulary) is presented for modelling a wide range of problems that arise when dealing with transportation optimisation
under uncertainty in demand, pricing, etc. The models emerging from this framework are tackled with a generic method, called adaptive
dynamic programming. The underlying idea is the concept of incomplete states and approximate value functions that allow for the development
of approximation methods. Also addressed are issues of data quality that are relevant for all problems discussed in this volume.
Included in series
Handbooks in Operations Research and Management Science
