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合同セミナー 『 サプライチェーンリスク管理ど人道支援ロジスティクス 』. Tokyo Maritime University 07/04/2013 . Optimization of the configuration of a supply chain and impact of a supplier disruption. Prof. Matsukawa , MARC Seiji Keio University, Graduate School of Science and Technology. Introduction.
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合同セミナー『サプライチェーンリスク管理ど人道支援ロジスティクス』合同セミナー『サプライチェーンリスク管理ど人道支援ロジスティクス』 Tokyo Maritime University 07/04/2013
Optimization of the configuration of a supply chain and impact of a supplier disruption Prof. Matsukawa , MARC Seiji Keio University, Graduate School of Science and Technology
Introduction • How to configure a supply chain? • What suppliers, processes, transportation modes to choose? • Indeed each stage of a supply chain might have several options
Introduction • Graves and Willems (2005) explore the supply chain configuration issue • Minimization of the supply chain cost with a dynamic program • Goal of this research: • Compare single and dual sourcing • Analyze the effects of a supplier disruption • Adapt the model to take into account fixed ordering costs Prof. Matsukawa, MARC Seiji
Table • Supply chain configuration model • Single and dual sourcing • Impact of a disruption • Inventory policies • Conclusion Prof. Matsukawa, MARC Seiji
Supply chain configuration model Prof. Matsukawa, MARC Seiji
Network model and inputs • Network model of the supply chain • Several options at each node: 1 6 2 7 9 3 • External demand: • Mean • Standard deviation 1 4 8 1 5 2 3 Cost Lead time Prof. Matsukawa, MARC Seiji
The optimization problem • We try to minimize the total SC cost: • Subject to some constraints: • One option chosen at each node • Feasibility of the service times • Respect of the service time to the external customer Safety stock cost Pipeline stock cost COGS Prof. Matsukawa, MARC Seiji
The dynamic program • The variables: options and service times • At each step of the program we evaluate the following functional equation: • Output of the program: • Best options at each node to minimize the total SC cost • Optimal service times at each node Safety stock cost Pipeline stock cost COGS Prof. Matsukawa, MARC Seiji
Local VS global optimum • Local best option option that minimizes the cost at the stage • Global best option option that minimizes the total SC cost • We compare the expected total SC costs • With the local optimums: 56 482 $ • With the global optimums: 54 915 $ Prof. Matsukawa, MARC Seiji
Single and dual sourcing Prof. Matsukawa, MARC Seiji
Differences between single and dual sourcing Single sourcing Dual sourcing • Better pricing • Better and longer relationship • Better communication • Better security • Better flexibility • Maintain competition between suppliers 80% 20% Prof. Matsukawa, MARC Seiji
Selection of the second supplier • First selection policy: • Simplest selection policy • Better implementation in the existing program First run Second run Prof. Matsukawa, MARC Seiji
Selection of the second supplier • Second selection policy • Better selection policy • The existing program has to be adapted First run Prof. Matsukawa, MARC Seiji
Single VS dual sourcing • We compare the expected total SC cost • Single sourcing: 53 171 $ • Dual sourcing: 57 404 $ Prof. Matsukawa, MARC Seiji
Impact of a disruption Prof. Matsukawa, MARC Seiji
The calculation program • The calculation program simulates the behavior of the SC over a certain period of time (ex: 20 weeks) • Disruption characteristics: • Impacted supplier • Starting time and duration • For example: • Best option of stage 8 • Starts at t=3 for 4 periods Demand realization • Cost • Revenue • Profit Calculation program Configuration program Prof. Matsukawa, MARC Seiji
Cost calculation • The safety stock cost: • The pipeline stock cost: • The cost of goods sold: Prof. Matsukawa, MARC Seiji
Cost calculation • Penalty cost: Recovery cost Medium penalty rate High penalty rate Cost of holding some inventory + cost of inactivity Cost of increasing the production capacity Cost of holding some inventory + cost of inactivity Prof. Matsukawa, MARC Seiji
Profit calculation • The profit at time t is: 630 $ Prof. Matsukawa, MARC Seiji
Single VS dual sourcing without disruption • Cost • Total SC cost over the 20 weeks: • Single sourcing: 1 113 410$ • Dual sourcing: 1 202 583$ • Difference: 8% Prof. Matsukawa, MARC Seiji
Single VS dual sourcing without disruption • Profit • Total SC profit: • Single sourcing: 207 699$ • Dual sourcing: 118 526$ • Difference: -43% Prof. Matsukawa, MARC Seiji
Single VS dual sourcing with disruption • Total SC profit: • Single sourcing: -99 109$ (207 699 $) • Dual sourcing: 104 214$ (118 526 $) (No disruption) time disruption Prof. Matsukawa, MARC Seiji
Single sourcing analysis • Cost Penalty cost Disruption time Lead time of the disrupted node Service time of the disrupted node Prof. Matsukawa, MARC Seiji
Single sourcing analysis • Profit • Without disruption: 207 699$ • With disruption: -99 109$ Profit overshoot Disruption time Lead time of the disrupted node Service time of the disrupted node Prof. Matsukawa, MARC Seiji
Dual sourcing analysis Disruption time • Cost Only 20% of supply Impact of the stocks of 2nd option Lead time of the disrupted node Back to 100% Prof. Matsukawa, MARC Seiji
Dual sourcing analysis • Total SC profit: • Without disruption: 118 526$ • With disruption: 104 214$ • Difference: 12% Back to 100% Only 20% of supply Prof. Matsukawa, MARC Seiji
Inventory policy Prof. Matsukawa, MARC Seiji
The inventory policy • In the existing model, (s,S) policy with no fixed ordering cost • S = s • Orders at each period of time • We change the inventory policy • K ≠ 0 • We choose an (s,Q) policy • We work with the single sourcing policy on the expected costs Prof. Matsukawa, MARC Seiji
The (s,Q) policy • The inventory level: I s t Reorder quantity Q = EOQ Prof. Matsukawa, MARC Seiji
Results with fixed ordering cost Orders at each period (s,Q) policy • Expected total cost: (53 171 $) 120 171 $ • Inventory cost: 3901 $ 3% • Pipeline + COGS: 49 270 $ 41% • Fixed ordering cost: 67 000 $ 56% • Expected total cost: 105 504 $ • Inventory cost: 33 292 $ 31% • Pipeline + COGS: 49 270 $ 47% • Fixed ordering cost: 22 942 $ 22% Prof. Matsukawa, MARC Seiji
Conclusion Prof. Matsukawa, MARC Seiji
Conclusion • Single VS dual sourcing: • Single sourcing more efficient if no disruption • In case of disruption, dual sourcing is way better • With fixed ordering cost: • (s,Q) ordering policy has better results than every period ordering policy • The balance of the different types of cost is different Prof. Matsukawa, MARC Seiji
Conclusion • This research produced: • A configuration tool that works with different sourcing and inventory policies • A quantitative analysis of different types of SC configuration • A comparison between the different types of SC configuration Prof. Matsukawa, MARC Seiji
Further research developments • Improve the risk management approach: • Take into account a disruption risk • Improve the model to optimize more general SC Prof. Matsukawa, MARC Seiji
References • Optimizing the supply chain configuration for new products S.C.Graves, S.P.Willems, Management Science, 2005 • Optimal supply chain configuration strategies for new products S.P.Willems, PhD thesis, MIT, 1999 • Managing risks of supply chains disruptions: dual sourcing as a real option S.Pochard, master thesis, MIT, 2000 • Trial by fire: a blaze in Albuquerque sets off major crisis for cellphone giants A.Latour, Wall Street Journal, 29 Jan 2001 • To the rescue: Toyota’s fast rebound after fire at supplier shows why it is tough V.Reitman, Wall Street Journal, 08 May 1997 • The power of flexibility for mitigating supply chain risks C.Tang, B.Tomlin, International Journal of Production Economics, 2008 • Single or dual sourcing: decision-making in the presence of supply chain disruption risks H.Yu, A.Z.Zeng, L.Zhao, Omega, 2009 • Competition in multiechelon assembly supply chains S.M.Carr, U.S.Karmarkar, Management Science, 2005 Prof. Matsukawa, MARC Seiji
Thank you for your attention • Question or remark ? Prof. Matsukawa, MARC Seiji
Inventory policy • Cycle times Prof. Matsukawa, MARC Seiji
Single VS dual sourcing without disruption • Cost Prof. Matsukawa, MARC Seiji