A Challenge for an Efficient Supply Chain Management - Integration Versus Optimality

Presented on 10 Jan at ICORES 2015

Keynote Lecturer: Marino Widmer

Abstract: According to Hartmut Stadtler, a supply chain is a “network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer“. Moreover, he defines the supply chain management “as the task of integrating organizational units along a supply chain and coordinating material, information and financial flows in order to fulfill (ultimate) customer demands with the aim of improving competitiveness of a supply chain as a whole“. These definitions highlight the importance of integration and coordination in an efficient supply chain management. However, if one analyzes the models detailed in the scientific literature, none of them proposes to solve the problem of supply chain management in its entirety. In most cases, models are formulated to solve optimally a sub-problem (inventory management, delivery tour, ...). In rare cases, models link together two or in the best cases three components of the supply chain (for example: “production – delivery” or “production – warehousing – delivery”). This is mainly due to the fact that the development of a global model is practically impossible (too many constraints and variables). In the current state of the scientific knowledge and the technology, solving the global problem of the supply chain management remains a utopia. However, it is possible to be more efficient in the resolution of complex problems through the use of new approaches, such as matheuristics (optimization algorithms combining the efficiency of metaheuristic methods with the accuracy of mathematical programming techniques) or kernel search (a general heuristic approach to mixed-integer linear programming (MILP) problems). The purpose of this presentation is mainly to describe a general framework for the supply chain management, in order to identify each sub-problem in its context, and to illustrate the application of new tools (such as matheuristics and kernel search) in solving several sub-problems related to supply chain management. [1] in Hartmut Stadtler & Christoph Kilger (Eds), “Supply Chain Management and Advanced Planning“, 4th edition, Springer (2007)