Process Systems Laboratory
State of the Art in Supply Chain
- Overview -
Sunwon Park
Dept. of Chemical and Biomolecular Engineering
KAIST
Daejeon, Korea
What is Supply Chain Management?
Process Systems Laboratory
Information Flow
Supplier
Manufacturing
Distribution
Retail Outlet
Consumer
Material Flow
Cash Flow
Profit
Supply chain management refers to integrated planning :
- Functional integration of purchasing, manufacturing, transportation, warehousing, and sales activities
- Spatial integration of activities across geographically dispersed vendors, facilities, and markets
- Intertemporal integration of activities over strategic, tactical, and operational planning horizons
Supply Chain System Hierarchy
Process Systems Laboratory
Demand
Forecasting and Order
Management System
Scope
Strategic Optimization
Modeling System
Analytical IT
LongLong-Term
Tactical Analysis
Tactical Optimization
Modeling System
Production Planning Optimization
Modeling Systems
Production Scheduling Optimization
Modeling Systems
Logistics Optimization
Modeling System
Distributions Scheduling Optimization
Modeling Systems
Transactional IT
Materials Requirement
Planning Systems
Strategic Analysis
Distributions Requirements
Planning System
Enterprise Resource
Planning System
External Data
Management Systems
Source: Tayur,
Tayur, et al. [1999]
ShortShort-Term
Tactical Analysis
Operational
Analysis
IT Trend for Business Applications
Process Systems Laboratory
Integration
Data Integration with external
Information
Management
Automation
OA
OA
Computerized
Computerized
Accounting
Accounting
FA
FA
IT Trend for Business
Past
EIS
EIS
MIS
MIS
MRP
MRP
QMS
QMS
MMS
MMS
CIM
CIM
FMS
FMS
EIS
EIS
DSS
DSS
ERP
ERP
PDM
PDM
MES
MES
QMS
QMS
MMS
MMS
IMS
IMS
EIS
EIS
DSS
DSS
SFA
SFA
SCM
SCM
Virtual
Integration
Virtual
Enterprise
Employees
Partners
ERP
ERP
PDM
PDM Web-based
MES
MES
QMS
QMS
MMS
MMS
IMS
IMS
Present
Portal
Internet
Internet
Intranet
Intranet
Extranet
Extranet
Public
Customers
Future
Source: Kim. PSE Asia [2002]
Session Program
Process Systems Laboratory
What is Missing to Enable
Optimization of
Inventory Deployment and Supply
Planning?
Sridhar Tayur
SmartOps and Carnegie Mellon University
Present
Supporting Supply Chain Planning
and Scheduling
in Oil and Chemical Industry
Nort Thijssen
Shell Global Solutions International
Future
Challenges of Strategic
Supply Chain
Planning and Modeling
Jeremy Shapiro
Slim Technologies and MIT
What is missing to enable optimization of inventory
deployment and supply planning?
Sridhar
Tayur
Process Systems Laboratory
Persistent drivers of inventory inefficiency
• Inherent and increasing supply and demand uncertainty
• Increasing complexity in multistage supply chain
• Uncoordinated decision-making within companies and across supply chains
Optimization of inventory deployment and supply planning are enabled
by following approaches
• Stochastic approach directly accommodates supply and demand uncertainty,
variability, and complexity.
• All inventory forms and components are simultaneously, holistically optimized.
• Supply chain interdependencies are accounted for and managed over time.
• Coordinating decisions across functions, echelons, and enterprises is used.
Challenges of strategic supply chain planning and
modeling
Process Systems Laboratory
Jeremy Shapiro
Enlarging
Enlargingthe
thescope
scopeof
ofstrategic
strategicplanning
planningstudies
studiesand
andmodels
models
Reflecting
Reflectingtheories
theoriesof
ofstrategy
strategyin
indata-driven
data-drivenoptimization
optimizationmodels
models
Formalizing
Formalizingscenario
scenarioplanning,
planning,applying
applyingstochastic
stochasticprogramming
programmingand
and
modeling
modelingrisk
risk
Expanding
Expandingbusiness
businessprocesses
processesto
toexploit
exploitfact-based
fact-basedanalysis
analysisof
of
strategic
plans
strategic plans
Supporting supply chain planning and scheduling
decisions in the oil & chemical industry
Nort Thijssen
Process Systems Laboratory
Core requirements for an integrated tool set
Integration
• Complete horizontal integration
• Seamless system from feedstock
trade through to product trading
Convergence
• Convergence of strategy, planning
and scheduling
• Vertical systems integration
Modularity
• Phased implementation and scheduling
Scalability
• Application to the most simple and/or
complex supply chains
Viewing
• Interactive, customized viewing
• Internet and workflow enabled viewing
Speed
Link
• Real-time optimization speed
• Direct links to online refinery/plant
optimization
GMOS/
NetSim
GMOS/NetSim
Accessing
Accessing
best
practice
best practiceknow-how
know-how
from
supply
from supplychain
chain
all
over
the
globe
all over the globe
Getting
Getting
quick
practical
quick practicalanswer
answer
with
solving
real
problem
with solving real problem
Enhancing
Enhancing
business
businessvision
visionand
and
direction
direction
Speaker: Dr. Sridhar R.
Tayur
Process Systems Laboratory
Current
Currentposition
position
Prof.
Prof.of
ofOperations
OperationsManagement
Managementand
and
Manufacturing,
Manufacturing,CMU
CMU
President
of
SmartOps
President of SmartOps
Educational
EducationalBackgrounds
Backgrounds
B.Tech,
B.Tech,IIT,
IIT,Madras
Madras
Ph.D.,
Ph.D.,Cornell
CornellUniv.
Univ.
Research
Researchinterests
interests
Internet-enabled
Internet-enabledsupply
supplychains,
chains,supply
supplychain
chainmanagement,
management,managing
managing
product
variety,
plant
management,
JIT
and
logistics
product variety, plant management, JIT and logistics
Speaker: Dr. Jeremy Shapiro
Process Systems Laboratory
Current
Currentposition
position
Prof.
Prof.of
ofOperations
OperationsResearch
Researchand
and
Management
ManagementScience
ScienceEmeritus,
Emeritus,MIT
MIT
President
of
SLIM
Technologies
President of SLIM Technologies
Educational
EducationalBackgrounds
Backgrounds
B.M.E.
B.M.E.and
andM.I.E.,
M.I.E.,Cornell
Cornell
Ph.D.,
Ph.D.,Stanford
Stanford
Research
Researchinterests
interests
Integer
Integerprogramming,
programming,large-scale
large-scaleprogramming
programmingon
onparallel
parallelcomputers,
computers,
integration
integrationof
ofmathematical
mathematicalprogramming
programmingand
andheuristic
heuristicmethods,
methods,
supply
chain
management
and
portfolio
optimization
supply chain management and portfolio optimization
Speaker: Nort Thijssen
Process Systems Laboratory
Current
Currentposition
position
Senior
SeniorConsultant
Consultant
Shell
Global
Shell GlobalSolution
SolutionInternational
International
Educational
EducationalBackgrounds
Backgrounds
M.S.,
M.S.,Univ.
Univ.of
ofTechnology,
Technology,Eindhoven
Eindhoven
Netherlands
Netherlands
Professional
Professionalexperiences
experiences
Shell
Shellresearch
researchcenter
centerin
inAmsterdam,
Amsterdam,1981~1988,
1981~1988,Decision
Decisionsupport
supportsystem
system
Shell
Shellrefinery,
refinery,1988~1992,
1988~1992,Refinery
Refineryplanning
planning&&scheduling
scheduling
Shell
ShellGlobal
GlobalSolution
SolutionInternational,
International,1993~present,
1993~present,Supply
Supplychain
chain
optimization
optimizationservices
servicesfor
forthe
theoil
oilchemicals
chemicals&&gas
gasindustry
industry