Supply Chain Modeling and

Analytics

Dr Rahul V Altekar
-
Text Book
Supply Chain Management: Concepts and
Cases by Rahul V Altekar, Prentice Hall of
India Publications, Delhi, 2013
TOPICS
Fundamentals of Optimization
Optimization using MIP
Decision Making in Supply Chain
Heuristic Application
Analysis of Manufacturing Supply Chains
Planning, Scheduling, Lead time
WIP Inventory perspective
Logistics Models
TSP, VRP, ACO
Check your progress: Basics
Logistics # Supply Chain Management
Manufacturing # Operations
SCM decisions are interdependent
Since Consumer # Customer,
companies have to invest billions
SCM is based on Theory of core
competency and Partnership
Check your progress: Analytics
SCF = SCM Analytics
MIP = True Optimization
Modeling = More than half solution
Since time is money, accuracy is
SCM IT is v/s SCM Analytics is
 Defining SCM!!!
A Process Umbrella.
Complex network of relationships that
organizations maintain with trading
partners to source, manufacture and
deliver products
 Processes Flows

Material flows involve physical product flows

from suppliers to customers through the chain,
as well as the reverse flows via product returns,
servicing, recycling, and disposal
Information flows involve demand forecasts,
order transmissions, and delivery status reports.
Financial flows involve credit card information,
credit terms, payment schedules, and
consignment and title ownership arrangements
 Supply Chain
How many How many
to produce? distribution centers?
Retailer

Manufacturer
C
Supplier
DC
u
Retailer
s
Manufacturer t
o
Supplier
DC Retailer
m
e
Manufacturer
r
Retailer s
Where to source Where to
materials? build inventory?
Should we
Subcontractor subcontract?
 Cost Optimization is the Key

Retailer

Manufacturer
C
Supplier
DC
o
Retailer
n
Manufacturer s
u
Supplier
DC Retailer
m
e
Manufacturer
r
Retailer s

Subcontractor
We optimize
decision day in
and day out
 SCM Approach

Retailer
Manufacturer
C
Supplier
DC
o
Retailer
n
Manufacturer s
u
Supplier
DC Retailer
m
e
Manufacturer
r
Retailer s

Subcontractor
Information Sharing for
Coordinated Management
Demand Management
Forecasting Levels
Item, Location, Channel Hierarchy
Demand Management:
Heuristics Application
Optimization Software Demo
How to investigate the error using Analytics
Manufacturing Supply Chain
Planning Levels and Modeling
Product Structure and Planning Level Framework
FAS-MPS-MRP, Manual, SIC
Horizon, Bucket, Rolling Frequency and Planning
Zones, System Order Type
Manufacturing Planning Using SCM Analytics
Arriving at Optimized Production plan
Identify capacity and materials exception
Phantom Item Modeling
Theory of Manufacturing
Plossl in his theory of manufacturing:

Production problems must and can be eliminated. They cannot be

covered up successfully with cushions of inventory and time.
Inventory is more of a liability than an asset, having real value only
when it is flowing through operations or used to support them.
Tolerating some downtime while striving to eliminate their causes is
better than preventing idle time by manufacturing items not required
immediately.
More frequent and precise re-planning, such as computing daily, rather
than weekly, does not make it more accurate.
Re-planning is admitting failure; its not substitute for sound execution.
Plans impossible to execute are worse than useless.

13
Theory of Manufacturing
Plossl in his theory of manufacturing:

Lead times cannot only be monitored and adjusted but can also
be controlled.
Reducing setup time is worth the effort.
Planning defines resources needed to make what is planned;
execution applies available resources to make what customers
want now.
Only resources requiring long periods for actions should be
planned ahead; detailed plans should cover only very short
horizons.
There is one manufacturing planning and control system
framework common to all types of manufacturing.
All employees need continuous education. 14
Logistics Management
Definition,Evolution & Relationships with
SCM
Wings Of Logistics Management
Customer Order Processing
Location Analysis
Inventory Management
Transportation
Warehousing
Packaging
Materials Handling
Customer Service Management
LOGISTICS SERVICE PROVIDER

Company performing logistics

activities on behalf of a manufacturer
or distributor.

Classification depends on the

complexity and the type of value-
added operations carried out by the
Logistics Service Provider
The traditional Logistics Service Providers
who carry out physical logistics operations
(transport and storage) and whose
management system is limited to tracking
shipments on behalf of the client
company.
 The value-added Logistics Service Providers who add
a certain number of services to the traditional package
ranging from managing complex operational handling
(co-manufacturing and co-packing), to management of
administrative operations (billing and ordering) and
information management (tracking-tracing, etc.)

Third Party Logistics Service Providers

 Logistics services integrators characterized by the
quasi-absence of their own physical facilities.
Their role is to integrate the services of different sub-
contracting companies (transport, storage, value-added
operations, etc.) and to coordinate and control them
through management of the associated information
flows.

Accentures Fourth Party Logistics (4PL)

Transportation Problems
Long Haul or Transportation Problems
Short Distance or Routing Problems
VRP
Traveling Sales Person
Ant Colony Optimization
Role of 4PL and Control Tower Analytics for Logistics
Global Oil Industry: Logistics Complexity
Problem Areas
Modeling Considerations
Solutioning and Benefits