Data Analytics and
Optimization in Supply Chain
and Logistics
Metin Türkay
Department of Industrial Engineering
Koç-IBM Tedarik Zinciri Araştırma Merkezi
Koç University
ICT LEIT in H2020 Info Day
December 6, 2013, İstanbul
RESEARCH PHILOSOPHY
Sustainability
Energy Efficiency
Optimality
Logic-Based
Hybrid
Multi-Scale
Robust
Efficient
Scalable
Energy
Sustainable Fossil Fuels
Smart Electricity Grid
Renewable Energy
CONCEPTS
Synthesis
Design
Analysis
Optimization: MINLP,
MODELS
MILP, MIDO
Data Driven:
Numerical or categorical
ALGORITHMS
REAL-LIFE
APPLICATIONS
SCM&Logistics
Strategic, Tactical, Operational
Sustainable SCM
Sustainable Logistics
Math Programming
Disjunctive Progr.
Multi-Criteria Opt.
Systems Biology
Multi-Group Data Classification
Structure-Based Drug Design
Dynamics of Genetic Networks
"Knowing is not enough; we must apply.
Willing is not enough; we must do." -Goethe
WHAT IS A SUPPLY CHAIN?
BALANCING ACT
TWO FACTORS
Competitive Strategy
Supply Chain
Strategy
Efficiency
EFFICIENCY
Responsiveness
RESPONSIVENESS
Supply chain structure
Logistical Drivers
Facilities
Inventory
Transportation
Information
Sourcing
Pricing
Cross Functional Drivers
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
FUTURE
REAL TIME



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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
BIG DATA
Demand
Decisions/Reliability
Prices
DEMAND ESTIMATION
Periods
1
2
3
4
5
Error
0.0116
0.0167
0.0238
0.0215
0.0313
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
DATA CLASSIFICATION
 YPB
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 YPC
 YPB
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i
ik
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  YPCik
il
i
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YBl   YBClk l
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YBClk   YPBil lk
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YBClk   YPCik lk
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 YPBN
 YPBM
n
m
ilmn
ilm
 YPBM ilm
 YPCik
YPCik  YP1ik
YPCik  YP2ik
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).
Uney Yuksektepe, 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)
ilm
ilk
ik  Dik
ik  Dik
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
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
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TÜBİTAK – 2 projects
KoçSistem – 1 project
Mitsubishi Corporation – 1 project
TÜPRAŞ – 1 project (50% for energy supply chains)
İstanbul Ulaşım – 1 project
Transportation Systems
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
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TÜBİTAK – 2 projects
Turkish Automotive Manufacturers Association – 1 project
European Commission – 3 projects + 1 approved (starting in 2014)
KoçSistem – 1 project
İstanbul Ulaşım – 1 project
Mitsubishi Corporation – 1 project
OUR SPONSORS
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
SUMMARY
AT THE INTERFACE


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ICT
Transport
Energy
Smart Cities and Communities
EXPERTISE
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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