Data Analytics and Optimization in Supply Chain and Logistics Metin Türkay

1. Data Analytics and Optimization in Supply Chain and Logistics Metin Türkay Department of IndustrialEngineering Koç-IBM Tedarik Zinciri Araştırma Merkezi Koç University ICT LEIT in H2020InfoDay December 6, 2013, İstanbul

2. RESEARCH PHILOSOPHY Sustainability Energy Efficiency Optimality Synthesis Design Analysis CONCEPTS Logic-Based Hybrid Multi-Scale MODELS Optimization: MINLP, MILP, MIDO Data Driven: Numerical or categorical ALGORITHMS Robust Efficient Scalable Math Programming Disjunctive Progr. Multi-Criteria Opt. REAL-LIFE APPLICATIONS Energy Sustainable Fossil Fuels Smart Electricity Grid Renewable Energy Systems Biology Multi-Group Data Classification Structure-Based Drug Design Dynamics of Genetic Networks SCM&Logistics Strategic, Tactical, Operational Sustainable SCM Sustainable Logistics "Knowing is not enough; we must apply. Willing is not enough; we must do."   -Goethe

3. WHAT IS A SUPPLY CHAIN?

4. BALANCING ACT • TWO FACTORS EFFICIENCY RESPONSIVENESS

5. PAST-PRESENT • CONCERNS • Complexity: supply chains include many activities involving many entities at different time-resolutions • Design-Plan-Execute: Divide decisions into 3 levels • Strategy-Planning-Operation: Divide decisions into 3 levels • Multi-Scale: span over a vast geography, sectors, players • Multi-Echelon Decomposition: Divide into levels • Multi-Faceted: collaboration/competition at threats from different sources • 2-Stage: Consider interaction between 2 adjacent players in the supply chain • Uncertainty: many sources of uncertainty • Scenario Analysis: Sample a number of possible outcomes and calculate the expectation • Disruptions: everything can go wrong • Preparation: overdesign, buffers, safety stock • WHAT IS THE STATE-OF-THE-ART • Everything is based on Divide and Conquer strategies • Fixed Recipes through policy analysis • Little or no work on Rational/Extensible/Coherent approaches

6. FUTURE • REAL TIME • Uncertainty realization • Deviation management • Real time optimization • Configurability and flexibility • SYNCHRONOUS • Do not divide, define new paradigms and mechanisms • DATA INTEGRATED (DRIVEN) • Data  Information  Knowledge no longer the Holy Grail for Supply Chains • HOPE • IoT: data from everywhere, everything, all the time • Big Data: data analytics • 3D Printing & Additive Manufacturing: postponement, eliminate demand uncertainty CYBER PHYSICAL SYSTEM

7. BIG DATA Decisions/Reliability Demand Prices

8. DEMAND ESTIMATION

9. PRICE ESTIMATION • Futures and Options • Leading Macroeconomic Indicators • Jump Detection • Estimate Horizon: accuracy is sensitive to longer horizons • Successfully applied to Steel and Electricity prices

10. DATA CLASSIFICATION Dagliyan, O., F. Uney-Yuksektepe, I.H. Kavakli and M. Turkay, Optimization Based Tumor Classification from Microarray Gene Expression Data, PLoS ONE, 6(2), e14579 (2011). Dagliyan, O., Kavakli, I.H., Turkay, M., Classification of Cytochrome P450 Inhibitors with Respect to Binding Free Energy and pIC(50) Using Common Molecular Descriptors, J. of Chem. Inf & Mod., 49(10), 2403-2411 (2009). Armutlu,P., M.E. Ozdemir, S. Ozdas, I.H. Kavakli and M. Turkay, "Discovery of Novel CYP17 Inhibitors for the Treatment of Prostate Cancer with Structure-Based Drug Design", Letters in Drug Design and Discovery, 6(5), 337-344 (2009). Armutlu, P.,  M.E. Ozdemir, F. Uney-Yuksektepe, I.H. Kavakli and M. Turkay, Classification of drug molecules considering their IC50 values using mixed-integer linear programming based hyper-boxes method, BMC Bioinformatics, 9, 411 (2008).  UneyYuksektepe, F., O. Yilmaz and M. Turkay, "Prediction of Secondary Structures of Proteins using a Two-Stage Method", Comput. Chem. Eng., 32(1-2), 78-88 (2008). Kahraman, P. and M. Turkay, "Classification of 1,4-Dihydropyridine Calcium Channel Antagonists using Hyper-Box Approach", Ind. Eng. Chem. Res., 46(14), 4921-4929 (2007). Uney, F. and M. Turkay, "A Mixed-Integer Programming Approach to Multi-Class Data Classification Problem", European Journal of Operational Research, 173(3), 910-920 (2006)

11. PROJECT PORTFOLIO • Concepts, Models & Algorithms • IBM: the first IBM SUR Award in Turkey-2007, IBM Faculty Award-2009, IBM OCR Award with Haifa Lab, 2012 • TÜBİTAK – 5 projects • NSF – 2 projects (joint with Carnegie Mellon, UofAkron) • European Commission-FP7 – 2 projects (50% for concepts, models & algorithms) • European Science Foundation – 1 project • TÜPRAŞ – 1 project (50% for concepts, models & algorithms) • Energy and Supply Chains • TÜBİTAK – 2 projects • KoçSistem – 1 project • Mitsubishi Corporation – 1 project • TÜPRAŞ – 1 project (50% for energy supply chains) • İstanbulUlaşım – 1 project • Transportation Systems • TÜBİTAK – 2 projects • Turkish Automotive Manufacturers Association – 1 project • European Commission – 3 projects + 1 approved (starting in 2014) • KoçSistem – 1 project • İstanbulUlaşım – 1 project • Mitsubishi Corporation – 1 project

12. OUR SPONSORS

13. EC PROJECTS LOG4GREEN: Green Logistics IntRaRegio: Intermodal Logistics OSIRIS: Holistic Approach to Energy Efficiency in Urban Rail [MapDriver] MapDriver: ICT Innovation Uptake by SMEs finalizing the Consortium Agreement, will start in 2014

14. SUMMARY • AT THE INTERFACE • ICT • Transport • Energy • Smart Cities and Communities • EXPERTISE • Solutions methodology to complex problems • Big Data and analytics tools • Modeling complex systems • Optimization-based solution algorithms • EXPERIENCE • Concepts & Models • Solution Algorithms • A number of real-life projects