Supply-Chain Modeling and Analysis
Supply Chain Management
To remain competitive, industrial organizations are continually faced with
challenges to reduce product development time, improve product quality, and
reduce production costs and leadtimes. Increasingly, these challenges cannot
be effectively met by isolated change to specific organizational units, but
instead depend critically on the relationships and interdependencies among
different organizations (or organizational units). With the movement toward
a global market economy, companies are increasingly inclined toward
specific, high-value-adding manufacturing niches. This, in turn,
increasingly transforms the above challenges into problems of establishing
and maintaining efficient material flows along product supply chains. The
ongoing competitiveness of an organization is tied to the dynamics of the
supply chain(s) in which it participates, and recognition of this fact is
leading to considerable change in the way organizations interact with their
supply chain partners.
Our research is concerned broadly with (1) the development of techniques and
tools that enable modeling and analysis of emerging supply chain management
strategies and practices, and (2) application of these tools to understand
critical tradeoffs and alternatives in practical decision-making contexts.
Our interests span a range of inter-related supply chain management issues:
- Structure of Supply Chain: Here we are concerned with
determination of the "optimal" number of production units in the supply
chain as well as their location, based on considerations such as customer
service requirements, leadtimes, operational costs, and capacities.
- Supply Uncertainty: Understanding the relationship
with suppliers is of utmost importance in order to address supply
uncertainty. Our focus here is on selection of suppliers based on cost,
flexibility in supply contracts, expected learning curves of suppliers,
and agreements on cost and information sharing.
- Operational Policies: We are interested in identifying
inventory control policies, and information sharing strategies that enable a
smooth flow of materials through the supply chain. We are also interested in
understanding the operational impact of emerging coordination trends in
manufacturing (e.g., electronic market places).
Approach and Results
We are developing a modeling and simulation environment for analyzing
supply-chain management strategies, policies and decisions. We have adopted
a decomposable, "autonomous agents" approach to specifying supply chain
models; models are defined in terms of constituent supply chain "agents"
(e.g., suppliers, buyers, distributors), their structural relationships,
interaction protocols and coordination policies. Our approach thus
emphasizes construction of models that capture the locality that typically
exists with respect to the purview, operating constraints and objectives of
individual supply chain entities, and promotes analyses of supply chain
performance from a variety of organizational perspectives (e.g., individual
nodes, confederated subchains, overall network). From a system development
standpoint, our approach aims at flexible and rapid configuration of
alternative scenarios. Our implementation perspective is object-oriented,
and one goal is to produce class libraries of common model building blocks
(e.g., supplier/buyer agents, reordering policies, contractual agreements,
information exchange protocols) that can be adapted and reused in different
Our work to date has focused specifically on analyzing the impact of
information exchange between suppliers and manufacturers on supply-chain
dynamics. One interesting outcome of our initial study was a
characterization of situations where individual suppliers must share
information to remain competitive.
- Swaminathan, J.M., S.F. Smith and N.M. Sadeh, "Modeling Supply Chain
Dynamices: A Multi-Agent Approach", Decision Sciences, Vol.29, No.3,
- Swaminathan, J.M., S.F. Smith and N.M. Sadeh, "A Multi-Agent Framework
for Modeling Supply Chain Dynamics", Proceedings NSF Research Planning
Workshop on Artificial Intelligence and Manufacturing, Albequerque, NM,
- Swaminathan, J.M., N. Sadeh, and S.F. Smith, "The Impact of Supplier
Information on Supply Chain Performance", ICLL Working Paper, January, 1995.
- Swaminathan, J.M., S.F. Smith and N. Sadeh, "Modeling the Dynamics of
Supply Chains", Proceedings AAAI-SIGMAN Workshop on Intelligent
Manufacturing, Seattle, WA, August, 1994.
Norman Sadeh, Stephen F. Smith, Jay Swaminathan
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Stephen F. Smith