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A METHODOLOGY TO STABILIZE THE SUPPLY CHAIN
Title
A METHODOLOGY TO STABILIZE THE SUPPLY CHAIN.
Creator
Sarmiento, Alfonso, Rabelo, Luis, University of Central Florida
Abstract / Description
In todayÂÂ's world, supply chains are facing market dynamics dominated by strong global competition, high labor costs, shorter product life cycles, and environmental regulations. Supply chains have evolved to keep pace with the rapid growth in these business dynamics, becoming longer and more complex. As a result, supply chains are systems with a great number of network connections among their multiple components. The interactions of the network components with respect...
Show moreIn todayÂÂ's world, supply chains are facing market dynamics dominated by strong global competition, high labor costs, shorter product life cycles, and environmental regulations. Supply chains have evolved to keep pace with the rapid growth in these business dynamics, becoming longer and more complex. As a result, supply chains are systems with a great number of network connections among their multiple components. The interactions of the network components with respect to each other and the environment cause these systems to behave in a highly nonlinear dynamic manner. Ripple effects that have a huge, negative impact on the behavior of the supply chain (SC) are called instabilities. They can produce oscillations in demand forecasts, inventory levels, and employment rates and, cause unpredictability in revenues and profits. Instabilities amplify risk, raise the cost of capital, and lower profits. To reduce these negative impacts, modern enterprise managers must be able to change policies and plans quickly when those consequences can be detrimental. This research proposes the development of a methodology that, based on the concepts of asymptotic stability and accumulated deviations from equilibrium (ADE) convergence, can be used to stabilize a great variety of supply chains at the aggregate levels of decision making that correspond to strategic and tactical decision levels. The general applicability and simplicity of this method make it an effective tool for practitioners specializing in the stability analysis of systems with complex dynamics, especially those with oscillatory behavior. This methodology captures the dynamics of the supply chain by using system dynamics (SD) modeling. SD was the chosen technique because it can capture the complex relationships, feedback processes, and multiple time delays that are typical of systems in which oscillations are present. If the behavior of the supply chain shows instability patterns, such as ripple effects, the methodology solves an optimization problem to find a stabilization policy to remove instability or minimize its impact. The policy optimization problem relies upon a theorem which states that ADE convergence of a particular state variable of the system, such as inventory, implies asymptotic stability for that variable. The stabilization based on the ADE requires neither linearization of the system nor direct knowledge of the internal structure of the model. Moreover, the ADE concept can be incorporated easily in any SD modeling language. The optimization algorithm combines the advantage of particle swarm optimization (PSO) to determine good regions of the search space with the advantage of local optimization to quickly find the optimal point within those regions. The local search uses a Powell hill-climbing (PHC) algorithm as an improved procedure to the solution obtained from the PSO algorithm, which assures a fast convergence of the ADE. The experiments showed that solutions generated by this hybrid optimization algorithm were robust. A framework built on the premises of this methodology can contribute to the analysis of planning strategies to design robust supply chains. These improved supply chains can then effectively cope with significant changes and disturbances, providing companies with the corresponding cost savings.
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Date Issued
2010
Identifier
CFE0002986, ucf:47977
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0002986
A Methodology for Data-Driven Decision-Making in Last Mile Delivery Operations
Title
A Methodology for Data-Driven Decision-Making in Last Mile Delivery Operations.
Creator
Gutierrez Franco, Edgar, Rabelo, Luis, Karwowski, Waldemar, Zheng, Qipeng, Sarmiento, Alfonso, University of Central Florida
Abstract / Description
Across all industries, from manufacturing to services, decision-makers must deal day to day with the outcomes from past and current decisions that affect their business. Last-mile delivery is the term used in supply chain management to describe the movement of goods from a hub to final destinations. This research proposes a methodology that supports decision making for the execution of last-mile delivery operations in a supply chain. This methodology offers diverse, hybrid, and complementary...
Show moreAcross all industries, from manufacturing to services, decision-makers must deal day to day with the outcomes from past and current decisions that affect their business. Last-mile delivery is the term used in supply chain management to describe the movement of goods from a hub to final destinations. This research proposes a methodology that supports decision making for the execution of last-mile delivery operations in a supply chain. This methodology offers diverse, hybrid, and complementary techniques (e.g., optimization, simulation, machine learning, and geographic information systems) to understand last-mile delivery operations through data-driven decision-making. The hybrid modeling might create better warning systems and support the delivery stage in a supply chain. The methodology proposes self-learning procedures to iteratively test and adjust the gaps between the expected and real performance. This methodology supports the process of making effective decisions promptly, optimization, simulation, and machine learning models are used to support execution processes and adjust plans according to changes in conditions, circumstances, and critical factors. This research is applied in two case studies. The first one is in maritime logistics, which discusses the decision process to find the type of vessels and routes to deliver petroleum from ships to villages. The second is in city logistics, where a network of stakeholders during the city distribution process is analyzed, showing the potential benefits of this methodology, especially in metropolitan areas. Potential applications of this system will leverage growing technological trends (e.g., machine learning in supply chain management and logistics, internet of things). The main research impact is the design and implementation of a methodology, which can support real-time decisions and adjust last-mile operations depending on the circumstances. The methodology allows taking decisions under conditions of stakeholder behavior patterns like vehicle drivers, customers, locations, and traffic. As the main benefit is the possibility to predict future scenarios and plan strategies for the most likely situations in last-mile delivery. This will help determine and support the accurate calculation of performance indicators. The research brings a unified methodology, where different solution approaches can be used in a synchronized form, which allows researches and other interested people to see the connection between techniques. With this research, it was possible to bring advanced technologies in routing practices and algorithms to decrease operating cost and leverage the use of offline and online information, thanks to connected sensors to support decisions.
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Date Issued
2019
Identifier
CFE0007645, ucf:52505
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0007645