Supply Chain@UC Research Activities

Our “High Impact” Research Objectives

• Expand the knowledge base in supply chains
• Influence practice in both goods producing and service providing firms
• Participate in thought-leading consortia

Selected Projects and Research:

• Strategy and Design
• Operations
• Collaboration
• Managing Customer Relationships

A. Strategy and Design

• Strategy
• Product sourcing (Procter & Gamble) We assisted P&G in the use of integer programming, network optimization and geographic information systems to realign its North American supply chain. This work resulted in a decrease in the number of plants by 20% and an annual pretax savings of over $250 million.
• Automated product selection (Xpensewise.com) Developed a loan selection agent for a major e-commerce start-up. The agent builds sophisticated consumer profiles (using financial institution databases, credit bureau data, bill presentment data, and consumer preferences), analyzes offers against profiles using a proprietary model for offer scoring, recommends ‘best value' offers to consumers, facilitates ‘turnkey fulfillment', negotiates exclusive offers based on aggregated profiles, and customizes the engine for each customer.
• Operationalization of supply-network competencies
• Continuous adaptivity
• Measuring volume flexibility, its sources and its impact on a supply chain.
• Facility Location and Layout
  • Warehouse location (Caterpillar) This research presents an approach for the development of a rapid-response supply chain at Caterpillar. As part of its growth strategy, Caterpillar Inc. was planning to launch a new P2000 product line of 'compact' construction equipment and worktools. In anticipation of this, they asked us to construct and analyze potential P2000 supply chain configurations. Using decomposition and results from network flow theory, inventory theory, and simulation theory, we were able to provide solutions to this problem for different supply chain scenarios provided by Caterpillar. Novel features of our model include expedited deliveries, partial backlogging of orders, and realized sales that are responsive to service. Caterpillar made their decision regarding the P2000 supply chain based on our recommendations.
  • Plant layout and manufacturing improvement in metal stamping (Select Tool and Die Corporation)Construction of a flexible simulation model to aid in laying out a new plant from scratch; some of the machines had weights on the range of 500 tons so we needed to get it right the first time.
  • Reserve site selection (Environmental Protection Agency) We analyzed the problem of maximizing the expected number of species in a nature reserve network, subject to a constraint on the number of sites in the network, given probabilistic information about species occurrences. We developed a linear integer programming approximation that may be solved with standard integer programming software.
  • Location of telecom hubs This research develops a model for telecommunication network installation by companies in the Broadband-access business, specialized to the fixed-wireless case. We study a two-stage stochastic network-planning problem in which, at each stage, telecom hubs are installed on (or moved to) select buildings, before customer demand is fully known. Subsequently, installed hubs are allocated to to realized demands under technological (‘line-of-sight' and ‘crane-rain' radius) constraints. The model incorporates multiple hub types (differing in cost and capacity), budget constraints, and multiple scenarios for building demand. We maximize the total expected demand covered by the hubs. We present an effective greedy algorithm; we study its empirical performance and conduct parameter analysis using computational experiments.
• Logistics
  • Carrier selection (Ernst & Young) We developed optimization models to assist E&Y with selecting a set of core carriers for handling the shipping of its clients. Given a bid matrix consisting of each lane of demand and bids from competing carriers, the optimization model finds the most cost effective core set and assigns the lanes to core carriers.
  • Distribution system design (GE Plastics) GE Plastics acquired its largest distributor, Polymerland. We developed optimization models that helped GE merge the two distribution systems into a single distribution system that is cost effective and meets rigorous customer response restrictions.
  • Pharmaceutical Distribution and Packaging (Omnicare, Inc.)Developed detailed simulation model for operations of institutional pharmacies, including order pick and pack, conformance with legal requirements for handling and checking drugs, and dispatching filled prescriptions via a courier service.
  • Logistical simulation model of port of Pusan, Korea (U.S. Army Logistics Management College)Training on simulation at Ft. Lee, Aberdeen Proving Grounds, Center for Army Analysis, U.S. Forces in Korea, and U.S. Army War College. Initiated logistical simulation model of the port of Pusan, Korea.

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B. Operations

• Manufacturing operations
  • Remanufacturing of automotive parts (Visteon) Motivated by a capacity management problem at Ford-Visteon's remanufacturing facility in Mexico, we study a production line reconfiguration problem operating in a lean manufacturing setting. We develop a model that simultaneously considers line balancing and line length (number of stages) to maximize the remanufacturing system's effective throughput per stage. Using normal and gamma distributed processing times, we computationally analyze the effect of processing time variability on line reconfiguration decisions; the effect of correlation between task processing times on throughput; the marginal benefits of dynamic linebalancing and the effect of interstage buffers. Finally, based on relevant data collected from the firm, we provide recommendations for line reconfiguration at the Ford-Visteon plant.
  • Reliability study of flexible versus dedicated manufacturing systems (Eaton Corporation)Analyzed the reliability offered by various flexible and dedicated manufacturing systems. Developed financial models and methodologies for comparative reliability studies. Research findings led to changes in manufacturing operations and maintenance schedules.
  • Scheduling of manufacturing
• Workforce planning
  • Optimal use of overtime and excess personnel in emergency services Develops models for finding the optimal number of emergency service providers (e.g., firefighters) for a department. Models take into account the effects of retirements, random absences, and labor costs. Research results compare the cost of our optimal policy with several heuristic policies used in practice.
• Inventory control
  • Optimal inventory and outsourcing decisions (Dell) Models provide optimal production and outsourcing decisions when demand is unknown. Utilizes finite horizon MDPs and simulation modeling to quickly find optimal decisions.
  • Impact of product commonality on inventory
  • Safety stock calculations in complex supply chains (Millenium petrochemicals)Models developed using real supply chain data and validated for the calculation of safety stocks in a complex supply chain.
  • Use of risk pooling and postponementModels to investigate packaging postponement for a durable goods manufacturer of mops and brooms are developed. We show that a small amount of this postponement can achieve almost all of the benefits of completely delaying the differentiation of products.

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C. Collaboration

• Design of vendor-managed inventory contracts (Dell, Texas Instruments) Provides analytical models for some of the most common VMI contracts used in inventory. Develops optimal replenishment and manufacturing policies for a given contract. Results show that the effectiveness of VMI is highly dependent on the initiating contract. Suggestions for constructing effective VMI contracts are given.
• Supply contracting (McDonalds) This research studies risk-based integration of strategic and tactical capacity planning. We consider capacity management with a long-term strategic choice, such as the number of production lines to install before demand is known, and short-term tactical decisions relating to production, inventory and subcontracting (recourse actions made after demand is known). We present an integrated, scenario-based, mathematical modeling and solution framework. For a single-product environment, we examine properties of total profit as a function of demand and the long-term capacity. We investigate two measures of risk (profit variance and mean downside risk) and their corresponding profit-risk frontiers. Computational experiments are used to illustrate parameter sensitivity results obtained from the model. See www.sca-tech.com for application details.
• Combining multiple retailer forecasts into an updatable aggregate forecast Develops a methodology for combining forecasts from multiple retailers into an updatable aggregate forecast. Our research investigates the supply chain improvement provided by forecast sharing and updating with the improvements offered by vendor-managed inventory agreements.

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D. Managing Customer Relationships

• Technology-mediation in the service industry (America Online) Provides additional insights into the firm's communication with its customers, especially in scenarios where communication occurs over multiple, parallel media (telephone, email, instant messaging, fax, etc.) This research has explored the effects of various technology systems and the impact of automating functions formerly performed by customer service representatives.
• Improving customer-centric processes (Children's Hospital) Develops an approach for analyzing back-office process improvements in a service environment. An analytical method is devised for measuring the effects of the process improvement on operational efficiency and effectiveness as well as on employee and customer satisfaction.
• Examining consumer behavior during the disposition phase of consumption
• Optimal product design
• Consumer choice prediction

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