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1、,Business Process Expansion to Exploit Optimization Models For Supply Chain Planning Jeremy F. Shapiro Slim Technologies IMA Workshop The Role of Optimization in Supply Chain Management September 23, 2002 J Copyright 2002 by Jeremy F. Shapiro. All rights reserved.,The Overselling of Supply Chain Pla
2、nning Suites 60 Manufacturers Speak UpAMR Research, August 2001,Overselling collaboration, Supply Chain Planning (SCP) product suites fail to deliver on bold promises of synchronizing the supply chain Users are crediting SCP automation for performance improvementbut overall score of C+ reflects frus
3、tration about long implementation cycles and exaggerated vendor claims SCP systems deliver results in inventory management and customer service Success is more dependent on effective change management than it is on technology,Agenda,Transactional IT vs. Analytical IT Constructing the supply chain de
4、cision database from an ERP database Behavioral realities underlying organizational decision-making Harmonizing exploration and exploitation Business process expansion for tactical supply chain planning based on optimization models Conclusions,To effectively apply IT in managing its supply chain, a
5、company must distinguish between the form and function of Transactional IT and Analytical IT,Transactional IT,Concerned with acquiring, processing and communicating raw data about the companys past and current supply chain operations e.g., POS systems, general ledger systems, quarterly sales reports
6、, ERP and e-commerce systems,Analytical IT,Concerned with developing and applying systems for evaluating and disseminating decisions based on models constructed from supply chain decision databases e.g., production scheduling systems, forecasting systems, supply chain network optimization systems,Di
7、fferences between Transactional IT and Analytical IT can be contrasted across six aspects:,Aspect: Time frame addressed Transactional IT: Past and present Analytical IT: Future Aspect: Purpose Transactional IT: Reporting Analytical IT: Forecasting and decision-making,Aspect: Business scope Transacti
8、onal IT: Myopic Analytical IT: Hierarchical and longitudinal Aspect: Nature of databases Transactional IT: Raw and lightly transformed objective data Analytical IT: Raw, moderately and heavily transformed data that is both objective and judgmental,Aspect: Response time for queries Transactional IT:
9、Real-time Analytical IT: Real-time and batch processing Aspect: Implications to business process re-engineering Transactional IT: Substitute for, or eliminate, inefficient human effort Analytical IT: Improve managerial decision-making,Models for Integrated Supply Chain Management,Descriptive modelin
10、g - forecasting, data mining, activity-based costing, performance metrics, simulation, systems dynamics Prescriptive modeling - optimization models (mathematical programming combined with heuristic methods),Production SchedulingOptimization Modeling Systems,Distribution SchedulingOptimization Modeli
11、ng Systems,Transactional IT,Demand Forecastingand OrderManagement System,Strategic OptimizationModeling System,Tactical OptimizationModeling System,Production PlanningOptimization Modeling System,Logistics Optimization Modeling System,Supply ChainModeling SystemHierarchyTop-Down View,Scope,Strategic
12、 Analysis,Long-TermTacticalAnalysis,Short-termTactical Analysis,Operational Analysis,Windows,9. UserInterface,2. Model Data Tables,8. Reports,Enterprise ResourcePlanning Database,Internet Accessed Databases,10. Middleware,7. ReportGenerator,6. MPSSolution,1. ModelGenerator,4. Model In MPS Format,5.
13、Optimizer,Modeling System Schematic,3. Supply Chain Decision Database,Supply Chain Decision Databasefor Strategic and Tactical Planning,Derived from, but different than, transactional database Implied by optimization models Combines structural and numerical elements Based on aggregations of product
14、families, customers into markets, vendors into suppliers,Contains managerial accounting representations of manufacturing and distribution costs Requires cost relationships Close links with activity-based costing (push/pull relationship with optimization models) Compute optimal transfer prices,f(r) =
15、 sustaining cost,Cost/Resource Function,Fixed Cost (F1),Shutdown Cost (S),Historical Unit Cost (c),Conditional Minimum (m),Break Point (b),last year,Break Point (M1),Absolute Maximum (M2),Unit cost (c1),Unit cost (c2),Fixed Cost (F2) ,Unit cost (c3),r = cost driver = sustaining resource,Contains pro
16、cess, recipe and resource descriptions of manufacturing and distribution activities at facilities Contains approximate inventory cost relationships Contains extensive databases describing transportation networks (inbound, inter-facility, out-bound) Rates, distances, capacities, modes, customer service limitations Contains demand data for finished products (suitably aggregated) extracted from orde
