Distribution Planning Systems, Vehicle Routing Problems Research Proposal

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Distribution Planning Systems, Vehicle Routing Problems

Distribution Planning for Make to Order Manufacturers

The work of Chang and Makatsoris (nd) entitled: "Supply Chain Modeling Using Simulation" published in the International Journal of Simulation states that the key factor for success in business in today's global market is the management of the "entire supply chain." (Chang and Makatsoris, nd) it is held that it is acknowledged in today's "World-class organizations...that non-integrated manufacturing processes, non-integrated distribution processes and poor relationships with suppliers and customers" are not enough for the success of these organizations as they have come to "realize the impact of an organization's plan on the other areas of the supply chain." (Chang and Makatsoris, nd) the following illustration is that of the 'typical supply chain' which has been adapted from the work of Chang and Makatsoris (nd).

Figure

Typical Supply Chain

Source: (Chang and Makatsorsis, nd)

Supply chain functionalities include those stated as follows:

(1) demand planning;

(2) master planning

(3) procurement

(4) transportation; and (5) Manufacturing.

The following illustration is a diagram of an example supply chain simulation model which has been adapted from the work of Chang and Makatsoris, nd (nd).

Figure 2

Diagram of Supply Chain Simulation Model

Source: Chang and Makatsoris (nd)

Stated as example data requirements are those listed as follows:

(1) manufacturing process and time information;

(2) inventory control policies information

(3) Procurement and logistics information

(4) Demand information; and (5) Policies and strategies information. (Chang and Makatsoris, nd)

The following illustration lists the data required for each of these five areas.

Figure 3

Source: (Chang and Makatsoris, nd)

The report of Chang and Makatsoris (nd) concludes by stating that meeting the customer demand for "guaranteed delivery of high quality and low cost with minimal lead time" is the objective of supply chain management." If this objective is to be achieved, then companies must have a "better visibility into the entire supply chain of their own as well as those of their suppliers and customers." (Chang and Makatsoris, nd) This requires agility to adjust and reformulate plans and to do so in real time, to meet the unplanned moments in the supply chain production process. It is related that these needs are that which have driven the "application of discrete event simulation for analyzing entire supply chain process." (Chang and Makatsoris, nd) Supply chain management that is efficient can be realized through considering carefully information related to "capacity and material information." (Chang and Makatsoris, nd) the source of such inefficiencies includes: (1) the company; (2) the suppliers and (3) some are caused by both the company and its suppliers. (Chang and Makatsoris, nd)

II. Production Planning for Make-to-Order Manufacturers -- an Overview

The work of Chandra and Fisher (nd) entitled: "Coordination of Production and Distribution Planning" reports a computational study that investigated that value of coordinating production and distribution planning. Chandra and Fisher consider a plant with various product production over time and in which maintained is an inventory of finished goods at the plant in the study. Product distribution takes place through a fleet of trucks to various retail outlets at which the demand for each product "is known for every period of a planning horizon." (Chandra and Fisher, nd) Chandra and Fisher state that the majority of consumer products flow through "a pipeline that begins with production at a plan, followed by transportation to a retail outlet for consumer purchase, perhaps passing through a distribution center on the way." (Chandra and Fisher, nd)

It is stated by Chandra and Fisher to be increasingly clear "that companies will need to make the necessary organizational changes that will facilitate coordination of these operational functions and develop an ability to make more complex decisions within this structure." (nd) Chandra and Fisher state that Pyke (1987) and Cohen and Lee (1988) "studied integrated production/distribution systems under stochastic demand" and that Pyke "developed an analytical model of a simple three node system (factory, finished goods stockpile and single retailer) and examined the properties of the cost functions arising from this model for a single product case." (Chandra and Fisher, nd) However, it is related that this model does not make consideration for costs or issues that are related to the transportation of goods from the stockpile to the retailer. Chandra and Fisher (nd) state that their work makes comparison of two approaches to management of this operation "one in which the production scheduling and vehicle routing problems are solved separately and another in which they are coordinated within a single model." Chandra and Fisher state that the comparison is made "...for a number of different values of the basic model parameters, which include the length of the planning horizon, the number of products and retail outlets, and the cost of setups, inventory holding and vehicle travel. The reduction in total operating cost from coordination ranged from 3% to 20%. The value of coordination increases as the length of the planning horizon, the number of products and retail outlets, and vehicle capacity increases, as production capacity becomes less binding, and as distribution costs increase relative to production costs." (Chandra and Fisher, nd)

Chandra and Fisher state in conclusion that their study has shown that "under the right conditions, the value of coordination production and distribution can be extremely high. The analysis further provides the capacity to make the decisions that are more complex that are required under coordination." (nd) Presently, the majority of companies are characterized by both the organization and incentive structure design lacking the capacity to support coordination of production and distribution, therefore the efforts for improvement are focused on these two functions. These efforts are stated to be "reaching the point of diminishing returns" resulting in it being the right time to take under consideration making the necessary changes in the organization needed to achieve production and distribution coordination.

III. Time Windows for Delivery and Production Planning for Make-to-Order Manufacturers

IV. Simulation Techniques in Logistics

The work of Umeda and Zhang (2006) entitled: "Supply Chain Simulation: Generic Models and Application Examples" proposes a simulation system that is designed for the purpose of supply chain management of operations and that the "most remarkable characteristic of the simulation" is the representation of business process activities in supply chain management. Included in these activities are such as: (1) demands predictions; (2) manufacturing planning; (3) material purchasing; (4) manufacturing and transportation ordering; and (4) products shipping. (Umeda and Zhang, 2006) Finally, Umeda and Zhang demonstrate typical forms of simulation and supply chain systems including those which are: (1) centre-controlled ordering systems; (2) vendor reorder-point systems; and (3) pull-operational systems. These simulations systems are then compared in terms of the performance of the supply chain. Stated as two goals in the supply chain operation are those of: (1) synchronization; and (2) either inside the enterprise or beyond the enterprise's boundaries on production and logistics issues. It is stated that the robust 'chain' makes a requirement of data exchange on a frequent basis and "among inner-company processes and outside supplier's processes according to the above business process behaviors." (Umeda and Zhang, 2006)

The scope of the supply chain oriented simulation is stated in the work of Umeda and Zhang to require: (1) material management activities in individual processes (manufacturing, receipt, shipping, storage, inspection; and transportation); (2) order processing activities in individual processes, such as purchasing, operations, shipment and transportation. The process of sending and receiving between suppliers must be explicitly expressed; (3) information processing activities which combine material management activities with ordering activities. (Umeda and Zhang, 2006)

It is necessary to understand that the activities of order processing and information processing "are tightly coupled with the material management activities in suppliers, main product factories and distributors." (Umeda and Zhang, 2006)

There are stated to be three problems on simulation modeling that the supply chain must overcome and those are stated as follows: (1) How business processes in each chain member company should be represented in simulation models; (2) How process synchronization and data exchange transactions among the chain member companies should be represented in simulation models; and (3) How the communication mechanisms between information-flow and material-flow should be represented in simulation models. (Umeda and Zhang, nd) the following is an illustration of the Supply Chain -- Operational Models of the Supply Chain System.

Figure 4

Supply Chain -- Operational Model of Supply Chain System

Source: (Umeda and Zhang, nd)

Umeda and Zhang conclude by stating that their work demonstrates that simulation models may be specified for discrete manufacturing supply chain systems and demonstrates a proposed model composed of supplier member models. Stated is that through combining these modeling elements realization of center-controlled (push) system, buffer-drive (pull) system, and their hybrid combined system (such as re-order point model) all models representing business process operations may be implemented through the use of simulation software.

The work of Carol C. Bienstock (1996) entitled: 'Sample Size Determination in Logistics Simulations" states that logistics research contains numerous applications of a computer simulation modeling of logistics/distribution systems."… [END OF PREVIEW]

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