Decentralized supply chain formation using max-sum loopy belief propagation

Supply chain formation is the process by which a set of producers within a network determine the subset of these producers able to form a chain to supply goods to one or more consumers at the lowest cost. This problem has been tackled in a number of ways, including auctions, negotiations, and argumentation-based approaches. In this paper we show how this problem can be cast as an optimization of a pairwise cost function. Optimizing this class of energy functions is NP-hard but efficient approximations to the global minimum can be obtained using loopy belief propagation (LBP). Here we detail a max-sum LBP-based approach to the supply chain formation problem, involving decentralized message-passing between supply chain participants. Our approach is evaluated against a well-known decentralized double-auction method and an optimal centralized technique, showing several improvements on the auction method: it obtains better solutions for most network instances which allow for competitive equilibrium (Competitive equilibrium in Walsh and Wellman is a set of producer costs which permits a Pareto optimal state in which agents in the allocation receive non-negative surplus and agents not in the allocation would acquire non-positive surplus by participating in the supply chain) while also optimally solving problems where no competitive equilibrium exists, for which the double-auction method frequently produces inefficient solutions. © 2012 Wiley Periodicals, Inc.

Selection of simulation tools for improving supply chain performance

Simulation is an effective method for improving supply chain performance. However, there is limited advice available to assist practitioners in selecting the most appropriate method for a given problem. Much of the advice that does exist relies on custom and practice rather than a rigorous conceptual or empirical analysis. An analysis of the different modelling techniques applied in the supply chain domain was conducted, and the three main approaches to simulation used were identified; these are System Dynamics (SD), Discrete Event Simulation (DES) and Agent Based Modelling (ABM). This research has examined these approaches in two stages. Firstly, a first principles analysis was carried out in order to challenge the received wisdom about their strengths and weaknesses and a series of propositions were developed from this initial analysis. The second stage was to use the case study approach to test these propositions and to provide further empirical evidence to support their comparison. The contributions of this research are both in terms of knowledge and practice. In terms of knowledge, this research is the first holistic cross paradigm comparison of the three main approaches in the supply chain domain. Case studies have involved building ‘back to back’ models of the same supply chain problem using SD and a discrete approach (either DES or ABM). This has led to contributions concerning the limitations of applying SD to operational problem types. SD has also been found to have risks when applied to strategic and policy problems. Discrete methods have been found to have potential for exploring strategic problem types. It has been found that discrete simulation methods can model material and information feedback successfully. Further insights have been gained into the relationship between modelling purpose and modelling approach. In terms of practice, the findings have been summarised in the form of a framework linking modelling purpose, problem characteristics and simulation approach.

Simulation in the supply chain context:matching the simulation tool to the problem

The supply chain can be a source of competitive advantage for the firm. Simulation is an effective tool for investigating supply chain problems. The three main simulation approaches in the supply chain context are System Dynamics (SD), Discrete Event Simulation (DES) and Agent Based Modelling (ABM). A sample from the literature suggests that whilst SD and ABM have been used to address strategic and planning problems, DES has mainly been used on planning and operational problems., A review of received wisdom suggests that historically, driven by custom and practice, certain simulation techniques have been focused on certain problem types. A theoretical review of the techniques, however, suggests that the scope of their application should be much wider and that supply chain practitioners could benefit from applying them in this broader way.

Reconfiguration of supply chain network:an ISM-based roadmap to performance

Purpose: Short product life cycle and/or mass customization necessitate reconfiguration of operational enablers of supply chain (SC) from time to time in order to harness high levels of performance. The purpose of this paper is to identify the key operational enablers under stochastic environment on which practitioner should focus while reconfiguring a SC network. Design/methodology/approach: The paper used interpretive structural modeling (ISM) approach that presents a hierarchy-based model and the mutual relationships among the enablers. The contextual relationship needed for developing structural self-interaction matrix (SSIM) among various enablers is realized by conducting experiments through simulation of a hypothetical SC network. Findings: The research identifies various operational enablers having a high driving power towards assumed performance measures. In this regard, these enablers require maximum attention and of strategic importance while reconfiguring SC. Practical implications: ISM provides a useful tool to the SC managers to strategically adopt and focus on the key enablers which have comparatively greater potential in enhancing the SC performance under given operational settings. Originality/value: The present research realizes the importance of SC flexibility under the premise of reconfiguration of the operational units in order to harness high value of SC performance. Given the resulting digraph through ISM, the decision maker can focus the key enablers for effective reconfiguration. The study is one of the first efforts that develop contextual relations among operational enablers for SSIM matrix through integration of discrete event simulation to ISM. © Emerald Group Publishing Limited.

Green supply chain performance measurement using fuzzy ANP-based balanced scorecard:a collaborative decision-making approach

The purpose of this paper is to delineate a green supply chain (GSC) performance measurement framework using an intra-organisational collaborative decision-making (CDM) approach. A fuzzy analytic network process (ANP)-based green-balanced scorecard (GrBSc) has been used within the CDM approach to assist in arriving at a consistent, accurate and timely data flow across all cross-functional areas of a business. A green causal relationship is established and linked to the fuzzy ANP approach. The causal relationship involves organisational commitment, eco-design, GSC process, social performance and sustainable performance constructs. Sub-constructs and sub-sub-constructs are also identified and linked to the causal relationship to form a network. The fuzzy ANP approach suitably handles the vagueness of the linguistics information of the CDM approach. The CDM approach is implemented in a UK-based carpet-manufacturing firm. The performance measurement approach, in addition to the traditional financial performance and accounting measures, aids in firms decision-making with regard to the overall organisational goals. The implemented approach assists the firm in identifying further requirements of the collaborative data across the supply-cain and information about customers and markets. Overall, the CDM-based GrBSc approach assists managers in deciding if the suppliers performances meet the industry and environment standards with effective human resource. © 2013 Taylor & Francis.

The role of third party logistics providers (3PLs) in the adoption of green supply chain initiatives

The increasing importance of environmental sustainability has sharpened the focus on the need for innovative approaches to the purchasing of transport and logistics services. This article points out some of the challenges that purchasers of transport and logistics services, as well as their suppliers in the third party logistics (3PL) industry, are facing. These include the need for closer collaboration between 3PLs and their customers, as well as developing systems for the robust assessment of the environmental sustainability of services. The article is based on several years’ research experience in Ireland, Italy and Sweden.

Dynamic supply chain alignment:a new business model for peak performance in enterprise supply chains across all geographies

Dynamic supply chain alignment: a new business model for peak performance in enterprise supply chains across all geographies John Gattorna and friends, Farnham, Gower Publishing, 2009, 440pp., £60, ISBN 978-0-566-08822-3.