Issues in Supply Chain Scheduling and Contracting

202 Pages·2014·1.1 MB·English

by  Christian Alexander Ullrich (auth.)

Issues in Supply Chain Scheduling
and Contracting
Christian Alexander Ullrich
Issues in Supply
Chain Scheduling
and Contracting
Dr. Christian A. Ullrich
Bielefeld, Germany
Dissertation Bielefeld University, 2013
ISBN 978-3-658-03768-0 ISBN 978-3-658-03769-7 (eBook)
DOI 10.1007/978-3-658-03769-7
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Foreword
ThisdissertationaddsitsinsightstotwogrowingareasofresearchinOperationsMan-
agement,SupplyChainSchedulingandcontractdesigninR&Dsupplychains.
Whileitisa,ifnotthe,coreparadigmofsupplychainmanagementliteraturethat
supplychainmembersshouldco-operatetoenhancetheefficiencyoftheircollective
effort,itdoesprovidebutlittleindicationofhowtodosoonanoperationallevel. The
first, andlargerpartofChristianUllrich’sdissertationstrivestofillthisgapwithre-
specttodifferentsupplychainschedulingscenarios. Thequestiondrivinghisanalysis
is:Whatisthesize,ineconomicterms,oftheadvantageofcommonlyschedulingman-
ufacturingandtransportationoperationsbysubsequentsupplychainmembers? This
questionisansweredbyextensivenumericalstudies,employingnewlydevisedalgo-
rithmsforthedifferentscenariosunderscrutiny,likelinearsupplychainsorsupplynet-
works. Thehighqualityandefficiencyoftheseheuristicsareshown. Theyhenceturn
outtobeusefulnotonlyforgagingthecostsavingpotentialofsupplychainschedul-
ingbutalsoasatoolforsolvingsomeoftheaforementionedtasksofoperationalsupply
chainmanagement. Moreover,someofthealgorithmsareformulatedasspreadsheet
models.Duetotheubiquityofspreadsheettoolsincompanyofficesthisopensaroute
tothepractitioner’sdaytodayapplicationofthesupplychainschedulingtoolsdevel-
opedhere.
ThereisampleindicationavailablethatespeciallySMEsareoftencharacterizedby
a considerable in-house production depth and high innovation intensity at the same
time.Atfirstglance,thisphenomenondoesnotfitwellintothemodernperspectiveof
concentrationonthefirm’scorecompetencies.Thefinalpartofthedissertationtriesto
findanexplanationforthisobservationbyexploringthebenefitsofsharingtheR&D
investmentamongthesupplierandthemanufacturerinatwo-stageinnovativesupply
chain. Christian Ullrich illuminates, analytically and numerically, the parameter set-
FOREWORD
tingsunderwhichsharingtheR&Dinvestmentisadvantageousforbothsupplychain
partners.
Ihopethisbookwillfindthebroadaudienceitdeserves.
Oerlinghausen,July2013 HermannJahnke
Preface
Thisdissertation1 isbasedonfourpaperswrittenduringmytermofemploymentat
BielefeldUniversity.Thefollowingabstractssummarizetheproblemsinvestigated,the
solutionmethodologies,andthemostimportantfindings.
• Integratedmachineschedulingandvehicleroutingwithtimewindows2
Thispaperintegratesproductionandoutbounddistributionschedulinginorder
to minimize total tardiness. The overall problem consists of two subproblems.
Thefirstaddressesschedulingasetofjobsonparallelmachineswithmachine-
dependentreadytimes. Thesecondfocussesonthedeliveryofcompletedjobs
with a fleet of vehicles which may differ in their loading capacities and ready
times.Job-dependentprocessingtimes,deliverytimewindows,servicetimes,and
destinationsaretakenintoaccount.Ageneticalgorithmapproachisintroducedto
solvetheintegratedproblemasawhole. Twomainquestionsareexamined. Are
theresultsofintegratingmachineschedulingandvehicleroutingsignificantlybet-
terthanthoseofclassicdecompositionapproacheswhichbreakdowntheoverall
problem,solvethetwosubproblemssuccessively,andmergethesubsolutionsto
formasolutiontotheoverallproblem? Andifso,isitpossibletocapitalizeon
thesepotentialsdespitethecomplexityoftheintegratedproblem?Bothquestions
aretackledbymeansofanumericalstudy.Thegeneticalgorithmoutperformsthe
classicdecompositionapproachesinthecaseofsmall-sizeinstancesandisable
togeneraterelativelygoodsolutionsforinstanceswithupto50jobs,5machines,
and10vehicles.
1Examiners:Prof.Dr.HermannJahnke,Prof.Dr.ReinholdDecker,andProf.Dr.ChristianStummer
(BielefeldUniversity,FacultyofBusinessAdministrationandEconomics)
2PublishedinEuropeanJournalofOperationalResearch,Volume227,Issue1,May2013,pages152-165.
Chapter3containsthispaperinarevisedandsupplementedversion.
PREFACE
• Thecost-cuttingpotentialofSupplyChainScheduling
Co-authoredbyDr.JanHerrmann
SupplyChainSchedulingdealswiththecoordinationofthemachineanddelivery
schedulesoftwoormoresupplychainstages.Theobjectiveistoimprovethesup-
plychain’scompetitivenessmeasuredintotallogisticscostsorthesupplychain
makespan,forexample. However,thepotentialforimprovementhasneverbeen
properlyquantified. Ifperformanceimprovementsdidnotsufficetocompensate
forthecostofcoordination,SupplyChainSchedulingwouldbeunprofitableand
thusexpendable. Thispaperaimstoassessthecost-cuttingpotentialofSupply
ChainScheduling. Theinvestigationfocussesonasupplierandamanufacturer,
bothofwhomfaceamachineanddeliveryschedulingproblem. Thesumoftar-
diness, inventory holding, andtransportation coststhat resultifthe companies
schedule on their own is compared to the total costs incurred if they schedule
jointly.Onaverage,SupplyChainSchedulingcutcostsbyupto35%.
Sincethecomplexityoftheexaminedschedulingproblemscanleadtoextremely
longcomputationtimes,onlysmall-sizeinstancesaresolvableusingacommercial
optimizationsoftware. Hence,aMicrosoftExcel-basedheuristicapproachisde-
velopedthatenablesustohandlereal-world-sizeinstancesaswell.Tothebestof
ourknowledgethereiscurrentlynoappropriatespreadsheetapproachtoschedul-
ing problems that does not rely on expensive add-on software packages. This
paper’sheuristiccanbeeasilytransferredtoalargenumberofbatching,sequenc-
ing, routing, andschedulingproblems. SinceExcelisanomnipresentsoftware
and such problems occur almost everywhere, the proposed approach provides
enormousopportunitiesforpractitioners.(co-authoredbyDr.JanHerrmann)
• SupplyChainScheduling:Makespanreductionpotential3
ThispaperalsoaddressestheoptimizationpotentialofSupplyChainScheduling.
Focusingontheoverallmakespanofafour-stagesupplychain,eightscheduling
scenarios are compared by means of a numerical study. The simplest scenario
is characterized by separate scheduling of all stages. The most promising sce-
narioisajointschedulingapproachthattreatsthesupplychainasaflowshop.
Intheothersixscenarios, differentsubsetsofstagescoordinatetheirschedules.
Joint Supply Chain Scheduling of all stages significantly outperforms the other
3PublishedinInternationalJournalofLogisticsResearchandApplications,Volume15,Issue5,October
2012,pages323-336.Chapter5containsthispaperinarevisedandsupplementedversion.
PREFACE
sevenscenarios.Thisresultholdsforthecasewithasinglemachineaswellasfor
twoidenticalparallelmachinesateachstage. Owingtothecomplexityofsome
schedulingproblems,thenumericalinvestigationofthefour-stagesupplychain
scenarioislimitedtosmall-sizeinstanceswhicharestillsolvableusingacommer-
cialoptimizationsoftware. However, asecondstudydealswithasimplertwo-
stagesupplychainstructurethatallowsfortheinvestigationofreal-world-sizein-
stances.Sincetheshortestprocessingtimepriorityappliedatthefirststageleads
topermutationscheduleswhichonaverageresultinnear-optimummakespans,a
jointSupplyChainSchedulingapproachbasedonJohnson’salgorithmturnsout
tobeunreasonable.
• HowtobenefitfromanR&Dinvestmentsharingcontractwithasupplier
Co-authoredbyDipl.-Kffr.RababMitri
Despiteatendencytoconcentrateonone’scorebusiness, especiallycompanies
thatareknownfortheirinnovativeproductsareoftenfoundtohaveanexcep-
tionallyhighin-houseproductiondepth.Focusingonsuchacompany,wemodel
variousfactorsthatinfluencethemake-or-buydecisionforacomponentrequired
foranewproduct. Asmanyinnovatingcompaniesaimtoproducehigh-quality
goodsonprinciple,thecomponent’squalityplaysanimportantroleinthemodel.
InvestmentinR&Disanotherimportantfactorsincethesesunkcostscanweaken
theinnovatingcompany’spositionwhennegotiatingwithapotentialsupplieron
thecomponentprice. Consistentwiththeobservationthatinnovativecompanies
tendtoproducespecificcomponentsontheirown,weidentifycasesinwhichin-
house productionisadvantageous. However, in-house productionas well as a
classicwholesalepricecontractwithaspecializedsupplieroftenturnouttobe
inefficient. Thispaperdemonstratesthat, undercertainconditions, boththein-
novativecompanyandthesuppliercanbenefitfromsharingtheassociatedR&D
investment.
Bielefeld,August2013 ChristianUllrich
Contents
1 Outline 1
2 IntroductiontoSupplyChainManagement 5
2.1 Historicalbackgroundandgeneralmotivation . . . . . . . . . . . . . . . . 5
2.2 Basicdefinitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2.1 Theinter-organizationalperspective . . . . . . . . . . . . . . . . . . 10
2.2.2 Theintra-organizationalperspective . . . . . . . . . . . . . . . . . . 13
3 SupplyChainScheduling:Integratedmachineschedulingandvehiclerouting 17
3.1 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.2 Literaturesurvey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.3 Mixedintegerlinearprograms . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.3.1 Parallelmachinescheduling. . . . . . . . . . . . . . . . . . . . . . . 24
3.3.2 Vehicleroutingwithtimewindows . . . . . . . . . . . . . . . . . . 26
3.3.3 Integratedmachineschedulingandvehiclerouting . . . . . . . . . 30
3.4 Generationoftestinstances . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.5 Heuristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.5.1 Decompositionapproaches . . . . . . . . . . . . . . . . . . . . . . . 34
3.5.2 Geneticalgorithmapproach . . . . . . . . . . . . . . . . . . . . . . . 36
3.6 Computationalresults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.6.1 Small-sizeinstances . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.6.2 Large-sizeinstances . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.7 Summaryandoutlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51